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A
Accidental
Bodily Injury:
Insured's bodily
injury or death
is due to an
unforseen accident
independent
of any natural
causes.
Accidental
Death and Dismemberment
(AD&D):
This type of
insurance pays
a benefit to
the insured
or the insured's
beneficiary
in the event
of bodily injury
or death by
accidental means
(See also Accidental
bodily injury).
Accident insurance
can take the
form of an individual
policy or an
AD&D rider
on an insurance
policy to supplement
the death benefit
amount when
the insured
loses any two
limbs or eyesight
in both eyes.
Accidental
Death Rider:
A rider added
to a life insurance
policy that
pays a benefit
to the beneficiary
in addition
to the face
amount of the
policy when
the insured's
death is the
result of an
accident (See
also Accidental
death and dismemberment).
Sometimes referred
to as Double
or Triple
Indemnity
where two or
three times
the death benefit
amount is paid
to the beneficiary
when certain
age and time
restrictions
are met.
Accidental
Means:
An uncontrollable,
unforeseen event
that occurs
which results
in accidental
bodily injury
(See also Accidental
Bodily Injury).
The mishap itself
would have to
be accidental
in addition
to the injury.
Act
of God:
Certain acts
of nature such
as earthquakes,
floods, or hurricanes,
that are beyond
human control.
Actuarial:
Deals with the
mathematics
and probabilities
of insurance.
Ensures evaluation
of risk, adequate
premium payment
and other statistical
studies for
all type of
risks that are
underwritten.
Adhesion,
Contracts of:
A one-sided,
legally binding
agreement prepared
by one party
and wholly accepted
or rejected
by another party.
An insurance
policy is a
unilateral,
take it or leave
it contract
because the
insurer sets
the terms of
the policy.
All insurance
contracts are
considered to
be contracts
of adhesion.
Age
Basis (Age Change):
An applicant's
insurance age
is determined
one of two ways,
depending on
the insurance
carrier: (1)Age
Nearest: six
months before
applicant's
birthday, their
insurance age
changes; (2)Actual
Age:applicant's
last birthday
will be used
to determine
the insurance
age. Most insurance
carriers use
age nearest.
Aggregate
Limit:
In Liability
Insurance, the
maximum amount
of coverage
under the contract
period, regardless
of how many
accidents occur.
Aleatory
Contract:
A contract such
as an insurance
contract in
which the dollar
amount to be
paid by each
party is not
equal. For example,
a policyholder
could pay a
premium and
collect nothing
from the insurer,
or the policyholder
could pay a
premium and
collect more
from the insurer
than the amount
of premium paid
if a loss occurs.
Amendment:
An official
document that
serves as a
revision to
the original
policy.
Annually
Renewable Term
(ART):
Provides the
policyowner
the right to
renew his/her
term life insurance
policy at the
end of each
year without
evidence of
insurability.
This annual
renewal right
continues until
the policyowner
reaches a specified
age or for the
number of years
determined by
the policy's
contract. With
most Annual(Yearly)
Renewable Term
contracts, the
premium increases
every year,
especially as
the policyowner
reaches age
50 and older.
Application:
A form that
the proposed
insured completes
with personal,
financial and
familial history
information
and used by
the insurer
to decide whether
or not to accept
the risk and
determine the
proposed insured's
underwriting
classification.
Appraisal:
A valuation
of property
conducted to
determine the
amount of insurance
to be purchased
or the amount
of damage to
be paid.
Assignment:
The transfer
of ownership
rights of a
life insurance
policy to another
person or business.
Attained
Age:
The age of the
insured on a
particular date.
Attending
Physician's
Statement (APS):
Medical information
and records
usually obtained
from the insured's
primary care
physician and
used in underwriting
a life or health
insurance application.
Authorization:
The amount of
insurance coverage
an underwriter
will accept
on a given color
of property
or risk exposure.
Auto
Collision:
In auto insurance,
coverage separate
from comprehensive
insurance that
provides protection
to the insured
in the case
of physical
damage to the
insured's car
should a collision
occur with another
inanimate object.
B
Back
Dating:
Making the effective
policy date
earlier than
the application
or issue date,
thereby making
the age at issue
lower and obtaining
a lower premium.
This is usually
limited by law
to six months.
Beneficiary
(-ies):
The entity (relative,
business, trustee,
etc.) selected
by the owner
of the policy
to whom the
proceeds are
payable in the
event of the
insured's death
(See also Contingent
and Primary
beneficiary).
Benefits:
The monetary
amount paid
(or payable)
and/or services
provided to
the insured
by the insurer
under the terms
of the insurance
contract.
Buy-Sell
Agreements:
A continuation
plan for partnerships,
sole proprietorships
and closed corporations
by which the
death or disability
of one partner
triggers the
selling of his/her
interest to
the remaining
partner(s),
proprietors(s)
or shareholder(s)
at a predetermined
formula. These
agreements are
often funded
by life insurance
and/or disability
income on each
member and is
owned and paid
for by the business.
C
Cancellable:
An insurance
contract that
may be ended
by the insured
or the insurer
at any time.
Cancellation:
The termination
of an insurance
contract by
the insured
or the insurer
in accordance
with the policy
provisions.
Cash
Surrender Value:
The sum of money
due to the insured
when the insured
surrenders a
life insurance
policy with
cash value.
This value is
calculated by
taking the total
cash value minus
any surrender
charges and/or
outstanding
loans (and accrued
interest).
Cash
Value:
The sum of money
available to
the owner when
the policy is
surrendered.
The cash value
can also be
used as collateral
if the owner
takes out a
loan against
the policy.
Policies that
offer cash value
include, but
are not limited
to, whole life,
variable life,
universal life
and joint life
insurance.
Catastrophe
Hazard:
The potential
danger of a
loss due to
a disaster in
which large
numbers of insureds
are subject.
A tornado would
be catastrophic
in nature because
many people
would be threatened
if it occured.
Child
Rider:
A rider to a
life insurance
policy in which
term life insurance
on the insured's
child is added.
The child must
be minor and
atleast 15 days
old. Most child
riders cover
any number of
children for
one flat rate.
Claim:
A request for
payment of the
contractual
benefits by
the insurer
that is made
by the insured
or the beneficiary.
Clause:
A section of
an insurance
policy that
covers various
topics such
as exclusions,
conditions for
coverage, or
responsibilities
of the insured.
Collateral
Assignment:
Securing a loan
by using the
insurance policy
or its value.
Collusion:
An agreement
between persons
to commit insurance
fraud.
Concealment:
Refers to a
fact that is
intentionally
not disclosed
to the insurance
company that
could affect
either the premium
or the settlement
of a loss. Concealment
of material
fact may be
cause to void
the contract.
Conditional
Receipt:
A temporary
contract that
requires the
insurance company
to provide conditional
coverage during
the underwriting
process when
premium is submitted
with the application
and the applicant
has been examined.
Contestable
Period:
A period of
time during
which the insurer
can cancel or
contest the
policy. For
life insurance,
the contestable
period is normally
two years.
Contingent
Beneficiary:
A secondary
beneficiary
designated by
the insured
to receive the
benefits of
the policy if
the named primary
beneficiary
is deceased
when the proceeds
become payable.
Contract:
An agreement
by which the
insurer agrees
to provide certain
benefits and/or
services to
the insured
in exchange
for consideration
(premium payments).
Conversion:
Converting a
group health
or life policy
to an individual
policy, under
specific conditions,
when the insured
is no longer
a member of
the group providing
coverage.
Convertible
(Convertibility
Option or Conversion
Privilege:
The right of
an individual
to change the
form of the
original policy
without evidence
of insurability.
For a example,
a term life
policy may be
convertible
to permanent
insurance without
a new medical
examination.
Coverage
Amount:
The face amount
of the policy.
This is the
amount of benefit
the insurer
would pay in
the event of
the insured's
death.
Credit
Report:
A confidential
document that
provides the
financial record
and reputation
of an applicant
who is being
underwritten
for insurance.
D
Date
of Issue:
The date printed
on the policy
that indicates
when the policy
was issued.
This date may
be different
than the policy
date, which
is the date
the policy went
into effect.
Decreasing
Term Insurance:
Term insurance
by which the
death benefit
decreases annually
but the premium
remains level.
This type of
insurance is
typically used
to cover mortgages.
Deductible:
The designated
amount the insured
must pay after
a loss before
he/she is entitled
to the benefits
from the insurer.
Disability
Income (DI)
Rider (Waiver
of Premium):
A rider that
allows insurance
premiums to
be waived when
the insured
is disabled,
typically for
atleast six
months.
Dividend:
The return of
a portion of
the premium
to a policyowner
by a participating
mutual or stock
insurer. Dividends
paid to policyowners
are not typically
taxable since
they are a return
of premium and
not considered
a gain. These
dividends may
be: (1)taken
as cash, (2)applied
against the
premium, (3)used
to purchase
more insurance
coverage, (4)left
on deposit with
the insurance
company to earn
interest, or
(5)used to purchase
one year of
term life insurance.
E
Effective
Date (Policy
Date):
The date the
insurance policy
is effective
and in force.
Emergency
Fund:
Money set aside
for emergency
expenses.
Evidence
Clause:
A statement
in the policy
relating to
the investigation
of a claim and
requiring the
insured to cooperate
fully in an
investigation
by providing
any records
and taking exams
that would satisfy
the adjuster
and the validity
of the claim.
Evidence
of Insurability:
Health information
such as a medical
exam or an attending
physician's
statement required
to satisfy underwriting
requirements.
Exclusions:
A provision
in the contract
that does not
provide coverage
for certain
perils. Common
exclusions are
catastrophic
hazards for
property and
casualty policies.
A common exclusion
for life insurance
policies is
the aviation
exclusion.
Expiry:
The date a term
life policy
terminates coverage.
F
Face
Amount:
The death benefit
amount of a
life insurance
policy.
Federal
Estate Tax:
The federal
tax placed on
the deceased's
estate amounting
to the calculated
value of the
estate.
FEGLI:
Federal Employees'
Group Life Insurance.
Fiduciary:
A person such
as an attorney,
executor of
an estate, or
a trustee holding
money or property
who is obligated
to act ethically
and responsibly
on behalf of
someone else.
The fiduciary
must safeguard
the property
left under his
or her care.
Flat
Extra Premium:
A fixed premium
paid in addition
to the regular
premium. This
may be charged
for the length
of the contract
or for specified
years. A $5
per thousand
flat extra added
to a $100,000
life insurance
policy would
increase the
premium by $500
a year.
Free
Look:
An opportunity
for the policyholder
to examine the
terms of a new
policy and surrender
it for a complete
refund of premium
if not fully
satisfied. This
period is usually
10, 20 or 30
days, depending
on the state
in which the
policy is written
in.
G
Gift
Tax:
A federal and
state gift tax
on the transfer
of property.
Grace
Period:
A period of
30 or 31 days
after the premium
due date when
the insured
can pay the
premium and
keep the policy
current while
the policy remains
in force.
Graded
Premium:
A life insurance
policy with
a low initial
premium that
increases over
a period of
time until it
becomes level.
Group
Life Insurance:
Life insurance
offered to members
of a group,
usually employees.
The employee
typically has
a master policy
and all employees
are offered
some coverage
without any
underwriting
requirements.
The premiums
may be paid
by the employer,
the employee
or both.
Guranteed
Issue:
The purchase
of insurance
without an exam
in which the
present and
past physical
conditions of
the applicant
are not measured.
H
Hazard:
Any situation
that increases
or influences
the probability
of loss.
Hazardous
Activities:
Any activity
that increases
one's risk of
peril or danger.
On an insurance
application,
scuba diving,
aviation, sky
diving, and
racecar driving
are examples
of hazardous
activities that
are taken into
account when
an insurance
company decides
whether or not
to accept the
risk of insuring
the applicant.
Human
Life Value:
The quantitative
value of the
future earnings
of a wage earner.
By calculating
the human life
value, one may
determine the
amount of life
insurance to
purchase on
an applicant.
By determining
the average
income of a
wage earner,
the number of
years the wage
earner is going
to work and
the present
value of the
income of the
wage earner,
one can calculate
the human life
value of a wage
earner.
I
Impaired
Risk:
A person with
a substandard
physical condition
such as a history
of stroke or
heart attack
who would be
a higher probability
of risk for
the insurer.
An applicant
who engages
in hazardous
activities could
also be an impaired
risk.
Indemnity:
The restoration
of loss in the
form of payment
or replacement.
In-Force
Business:
Cases on which
the premiums
are paid or
are being paid
as part of a
life insurance
company's business
portfolio.
Inspection
Report:
A report prepared
by an inspection
organization
for the insurance
company that
summarizes the
financial, physical,
moral or other
attributes of
an applicant
for insurance.
Inspection reports
are typically
required for
applicants applying
for larger amounts
of life insurance.
Insurable
Interest:
The expectation
of financial
loss that can
be covered by
an insurance
policy. For
example, a person
might have an
interest in
his or her home
because the
loss of it could
cause financial
hardship. A
beneficiary
must have an
insurable interest
in the life
of the insured
in order to
be designated
a beneficiary
at the time
of the application.
Insurance:
A mechanism
for reducing
the risk of
many by contractually
transferring
the risk to
an insurer,
thereby pooling
the risk in
return for monetary
considerations
from the insured.
Insured:
The person who
is covered by
an insurance
policy.
Insurer:
The party who
offers protection
to the insured
as outlined
in the policy.
Irrevocable
Beneficiary:
A beneficiary
who can be changed
only through
written consent
from that beneficiary.
Issue
Age:
Insurance age
of insured used
to calculate
the premium
of an insurance
policy.
J
Joint
Life and Survivor
Insurance:
Insurance coverage
that is written
on two or more
persons and
payable at the
death of the
last of those
insured. This
type of insurance
is typically
used for estate
planning purposes.
K
Key
Employee Insurance:
Insurance on
a key employee
whose loss of
services would
cause hardship
for the employer.
The employer
is the owner,
beneficiary
and payer of
the policy.
L
Lapse:
The termination
of an insurance
policy for failure
to pay the policy's
premium.
Level
Premium Term
Insurance:
A term life
insurance policy
where the premium
paid remains
the same throughout
the term of
the policy.
The premiums
for such policies
are initially
higher than
an Annual Renewable
Term policy,however,
over the life
of the contract,
the total premiums
paid may be
more cost effective.
Liabilities:
In insurance
terms, an obligation
of one party
to another for
damages made
resulting in
personal injury
and/or damages
to a person's
property and/or
other assets
Life
Expectancy:
A calculation
made to determine
the number of
years a person
is expected
to live according
to a particular
mortality table.
This is one
of the considerations
in determining
life insurance
premiums.
Limitations:
The maximum
amount of insurance
coverage available
under a policy
or exclusion
of certain described
premises.
Loss:
Property damage
or bodily injury
made to a third
party by the
insured party,
or damage to
the insured
party's own
preperty by
the insured
party.
Loss
Reserve:
The amount of
money an insurance
carrier must
"set aside"
for both known
and unknown
future claims.
Lump
Sum:
A single payment
from the insurer
for the total
benefit amount
due, instead
of a series
of installment
payments. Life
insurance face
amounts may
be paid in lump
sum, if requested
by the beneficiary.
M
Market
Value:
The value of
an asset based
on the price
a willing buyer
would pay and
current market
conditions.
Master
Policy:
A single insurance
contract issued
to an employer
or other entity
that provides
group insurance
to eligible
employees or
members, typically
by issuing a
certificate
of insurance
to such member.
Medical
Information
Bureau (MIB):
The organization
that maintains
a secure, centralized
computer facility
that stores
the coded health
history of persons
who have applied
for insurance
from subscribing
companies in
the past. This
information
is then available
to other insurance
companies for
future insurability
evaluations.
For more informations,
you may visit
the MIB website
at http://www.mib.com/.
Misrepresentation:
Inaccurate information
provided by
the applicant
during the application
process. Providing
inaccurate information
with the intent
to receive a
lower premium
in considered
intent to defraud.
Mortgage
Life Insurance:
A type of life
insurance that
pays the remaining
balance of mortgage
if the insured
dies. This is
usually a decreasing
term insurance
policy where
the death benefit
decreases over
time as the
balance on the
mortgage decreases.
Mutual
Insurer:
An insurer whose
policyowners
are also owners
of the company,
entitled to
dividends (return
of premium)
and, in some
cases, proxy
rights. Mutual
companies do
not have their
stocks trading
on the stock
exchange.
N
Nonassignable
Policy:
Prohibits a
policyowner
from transferring
the rights of
a policy to
a third party.
Nonparticipating
Policy (non-par):
Life insurance
policy from
which the policyowner
does not receive
dividends from
the insurance
company's surplus.
Notice
of Cancellation:
A written notice
stating that
the insurer
will cancel
a policy or
that the insured
is requesting
the cancellation
of the policy.
O
Offer:
The submission
of an application
for an insurance
policy. If the
offer is for
life insurance,
the first premium
payment must
be included
for the application
to be considered
an offer.
Offer
and Acceptance:
The submission
of an application
for an insurance
policy by the
applicant and
in the case
of a life insurance
application,
a first premium
payment ("Offer"),
followed by
an issuance
of a policy
by the insurer
("Acceptance").
Omnibus
Clause:
Insurance that
covers a third
party while
driving the
insured's automobile
with the permission
of the insured.
Overinsured:
A circumstance
in which the
amount of insurance
benefits exceeds
the value of
damages. For
life insurance,
an applicant
considered overinsured
will not be
offered additional
coverage unless
the applicant
replaces their
current coverage.
P
Paramedical
Exam (Paramed):
A medical examination
performed by
a non-physician
medical professional
used to determine
an applicant's
health risk.
The health risk
is used in determining
insurability
and premium
classification
for life and
health insurance.
Partial
Disability:
A disability
that prevents
the insured
from performing
all of the normal
duties associated
with their occupation.
Partial
Loss:
Damage to property
that falls short
of a total loss.
Participating
Policy (par):
Life insurance
policy where
the policyowner
receives dividends
from the insurance
company's surplus.
Per
Capita:
A term used
in the designation
of beneficiaries.
All surviving
beneficiaries
will share equally
in the death
benefit. If
one beneficiary
predeceased
the insured,
the remaining
beneficiaries
will share equally
in the death
benefit.
Per
Stirpes:
A term used
in the designation
of beneficiaries.
The distribution
of the death
benefit among
beneficiaries
with the provision
that protects
the heirs of
each beneficiary
in case the
beneficiary
dies before
the insured.
If one beneficiary
predeceased
the insured,
that beneficiary's
heirs would
share equally
in the death
benefit of that
beneficiary.
Permanent
Life Insurance:
A policy that
provides coverage
throughout the
insured's lifetime,
with no policy
expiration date,
as long as premium
payments are
made. This policy
may also build
cash value.
Persistency:
The percentage
of policies
that remain
in force and
have not lapsed.
The higher the
persistency
for an insurer,
the better the
retention of
business.
Policy:
A legal document
that details
the terms of
an agreement
between an insurance
company and
a policyowner.
Policy
Anniversary:
The anniversary
of the date
a policy was
issued.
Policy
Date:
The date on
which a policy
is in effect.
This may be
different than
the issue date,
if the policy
was backdated.
Policy
Fee:
A flat charge,
added to the
basic premium
cost, used for
the administrative
expenses the
insurance company
incurs in processing
a policy.
Policy
Not Taken:
A Policy is
not taken when
an applicant
decides not
to accept the
policy. If a
policy was prepaid
and the applicant
declines the
policy within
the free-look
period, the
premium is fully
refunded to
the applicant.
Policyholder:
Person(s) or
other entity
who is the owner
of the insurance
policy.
Policyowner:
See Policyholder.
Power
of Attorney:
A legal document
that authorizes
a specific person
to act on behalf
of the another
person. This
generally applies
to signing certain
legal documents
and making decisions
on behalf of
the another
person. A power
of attorney
may be designated
to help decide
the payment
options for
a beneficiary.
Preferred
Risk:
An applicant
or insured that
represents lower
risk than the
standard category
that was used
to calculate
the premium
rate. This usually
results in lower
premiums.
Premium:
The payment(s)
necessary to
keep an insurance
policy in force.
Premiums are
calculated based
on the applicant's/insured's
risk level of
incurring a
loss.
Premium
Notice:
This is a notice
from the insurance
company detailing
how much premium
payment is due,
and by what
date.
Primary
Beneficiary:
The entity (relative,
business, trustee,
etc.) selected
by the owner
of the policy
to whom the
proceeds are
payable in the
event of the
insured's death.
Proof
of Loss:
Formal documentation
by the policyowner
to the insurer
about any incurred
losses. This
documentation
is needed to
assess the loss
and also required
before an insurer
will compensate
the policyowner
for the loss.
Provisions:
The contents
of an insurance
contract that
details the
terms of the
policy and the
obligations
and rights of
the insured
and the insurance
company.
Q
R
Reinstatement:
Placing a policy
back in force
that was previously
discontinued
due to lack
of premium payment(s)
after the grace
period has expired.
Renewable
Term Life Insurance:
A term life
insurance policy
that may be
renewed anually
by the policyowner
annually without
any further
evidence of
insurability.
Replacement,
Life Insurance:
Exchanging an
in force policy
for a new policy.
Replacement
Cost:
Amount required
to replace an
insured's damaged
or destroyed
property with
one of similar
kind and quality,
without a reduction
for depreciation.
Representation:
Written or verbal
statements made,
either written
or verbal, by
an applicant
during the application
process. The
applicant must
answer such
inquiries to
the best of
their knowledge.
These statements
are generally
used in determining
an applicant's
insurability
and risk level.
Reserve:
See Loss Reserve.
Retention
of Risk:
Choosing to
assume all or
some of a risk
by not acquiring
insurance or
using another
technique to
transfer the
risk.
Revocable
Beneficiary:
A life insurance
beneficiary
who can be removed
or changed,
by the policyowner,
at any time
prior to the
death of the
insured.
Rider:
An endorsement
to an original
policy that
adds, removes
or changes a
condition(s)
in the original
policy.
Risk:
The probability
that the insured
will incur a
financial loss
in the form
of property
damage, personal
injury or death.
S
Section
1035 Exchanges:
A section of
the Internal
Revenue Code
that allows
for taking the
proceeds of
one life insurance
policy or annuity
and immediately
investing them
into another
life insurance
policy or annuity,
without having
to pay taxes
on any gains.
Split
Dollar Plan:
A method of
purchasing life
insurance where
an employee
and an employer
split the premiums,
ownership rights
and benefits.
There are two
types of split
dollar plans:
endorsement
and collateral.
Standard
Risk:
An applicant
or insured who
is considered
to have a normal,
or average,
probability
of a loss based
on health, a
vocation and
lifestyly.
Substandard
Risk:
An applicant
or insured who
is considered
to have a higher
than normal
risk of incurring
a loss based
either on health,
a vocation and/or
lifestyle. An
applicant considered
a substandard
risk may be
offered coverage
at a higher
premium.
Suicide
Clause:
A limitation
in a life insurance
policy that
states that
if an insured
commits suicide
during the initial
term of the
policy (usually
two years),
that no death
benefits will
be paid by the
insurance company.
Super-Preferred
Risk:
An applicant
or insured who
is considered
to have a much
lower than normal
risk of incurring
a loss based
either on health,
avocation and/or
lifestyle. A
super-preferred
risk will be
offered coverage
at the lowest
premium.
Surrender:
The act of terminating
a whole life
policy. The
policyowner
exchanges future
rights of coverage
for the immediate
cash value of
a life insurance
or annuity policy.
T
Term
Life Insurance:
A type of low-cost,
life insurance
that only pays
benefits if
the insured
dies during
the specified
period of time.
Term life insurance
does not build
cash value.
Termination:
The cancellation
of an insurance
policy by the
insurance company
or the insured.
Tertiary
Beneficiary:
The third beneficiary
to a life insurance
policy eligiblefor
policy benefits
should the primary
and secondary
beneficiaries
not survive.
Title
Insurance:
Covers a purchaser
of property
against unknown
defects at the
time of purchase,
such as a lien
against the
property.
Total
Loss:
Damage(s) to
property that
are so severe
that the property
cannot be restored
to the previous
condition before
the damage(s)
occured.
Trustee:
A person acting
as a guardian
of property
who holds, manage
and/or uses
the property
for the benefit
of a third party,
according to
the terms and
conditions of
the trust.
U
Underwriter:
The party who
assesses the
applicant's/insured's
risk level,
establishes
the corresponding
premium(s) and
assures that
funds will be
available to
pay to the insured
in the event
of a loss.
Unilateral
Contract:
A legal contract
in which only
one party makes
any legally
enforceable
promises. A
life insurance
policy is a
unilateral contract
since the insurer
writes the contract
and makes future
promises and
the insured
pays the premium
in exchange
for such considerations.
Uninsurable
Risk:
The risk of
incurring a
loss is so high
that an insurer
will not offer
coverage.
Uninsured
Motorist Coverage:
This type of
coverage is
part of an automobile
insurance policy
and protects
the owner of
an insured vehicle
where damages
are made to
the insured
vehicle by a
person who is
not covered
by insurance.
Universal
Life Insurance:
An adjustable
type of life
insurance that
provides both
term life insurance
coverage and
a savings vehicle
side account
with a guaranteed
minimum return
on the investment.
This type of
life insurance
also allows
the policyowner
to change the
amount of coverage
and premiums
throughout the
duration of
coverage.
V
Variable
Life Insurance:
An investment
oriented type
of permanent
life insurance
that provides
both life insurance
coverage and
a savings vehicle
through sub-accounts
with the amount
of return linked
to an underlying
portfolio of
securities.
Variable life
insurance has
a fixed premium
and a guaranteed
minimum death
benefit.
Voidable:
An insurance
policy that
can be cancelled
by either the
insurer or the
insured if either
side breaches
any term(s)
in the contract.
W
Waiver
of Premium:
When a life
insurance company
no longer requires
that an insured
party make premium
payment if he/she
has become disabled
for longer than
six months.
The insurance
policy remains
in full force
even though
premium payments
are no longer
required.
Whole
Life Insurance:
A type of life
insurance that
remains in full
force for the
insured's entire
life, as long
as premiums
are paid.
X
Y
Yearly
Renewable Term
(YRT):
Provides the
policyowner
the right to
renew his/her
term life insurance
policy at the
end of each
year without
evidence of
insurability.
This annual
renewal right
continues until
the policyowner
reaches a specified
age or for the
number of years
determined by
the policy's
contract. With
most Annual
(Yearly) Renewable
Term contracts,
the premium
increases every
year, especially
as the insured
reaches age
50 and older.
Z
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