Beneficiary
The person(s) named in the policy to receive the life
insurance proceeds upon the death of the insured.
Cash
(Surrender) Value
The amount that is available in cash for loans and that
may be available for withdrawals. Accessing Cash
Surrender Value may reduce the death benefit and may
increase the risk of lapse.
Convertible Term Insurance
Term insurance which can be exchanged (converted), at
the option of the policyowner and without evidence of
insurability, for a permanent insurance policy.
Dividend
A return of part of the premium on participating
insurance that is based on the insurer's investment,
mortality, and expense experience. Dividends are not
guaranteed.
Face
Amount
The amount stated on the face of the policy that will be
paid in case of death. It does not include additional
amounts payable under accidental death or other special
provisions, or acquired through the application of
policy dividends.
Insurability
Acceptability to the company of an applicant for
insurance.
Insured
or Insured Life
The person on whose life the policy is issued.
Level
Premium (Life Insurance)
Life insurance for which the premium remains the same
from year to year. The premium is normally more than the
actual cost of protection during the earlier years of
the policy and less than the actual cost in the later
years. The building of a reserve is a natural result of
level premiums. The payments in the early years,
together with the interest that is to be earned, serves
to balance out the underpayment of the later years.
Loan
(Policy Loan)
A loan made by a life insurance company from its general
funds to a policyowner on the security of the cash value
of a policy.
Paid-up
Insurance
Insurance that will remain in force with no need to pay
additional premiums.
Participating Policy
A life insurance policy that is eligible for the payment
of dividends by the insurer (see also Dividend.)
Permanent (Life Insurance)
Any form of life insurance except term; generally
insurance that builds up a cash value, such as whole
life.
Policyowner
The person who owns a life insurance policy. This is
usually the insured person, but it may also be a
relative of the insured, a partnership or a corporation.
Premiums
Payments to the insurance company to buy a policy and to
keep it in force.
Renewable Term Insurance
Term insurance which can be renewed at the end of the
term, at the option of the policyowner and without
evidence of insurability, for a limited number of
successive terms. The rates generally increase at each
renewal as the age of the insured increases.
Term Life
Insurance
Life insurance that does not build up cash value and
where the premium normally increases as the insured gets
older.
Universal
Life Insurance
A flexible premium life insurance policy under which the
policyowner may change the death benefit from time to
time (with satisfactory evidence of insurability for
increases) and vary the amount or timing of premium
payments. Premiums (less expense charges) are credited
to a policy account from which mortality charges are
deducted and to which interest is credited at rates
which may change from time to time.
Whole Life Insurance
A basic type of permanent life insurance which can
provide lifetime protection at a level premium. Premiums
must generally be paid for as long as the policy is in
force. |
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