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Lapse
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Termination of a policy upon the policy owner's failure to pay the premium within
the grace period.
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Level term insurance
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Term coverage on which the face value and premia remain unchanged from the date
the policy comes into force to the date the policy expires. |
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Life expectancy
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The average number of years remaining for a person of a given age to live as shown
on the mortality or annuity table used as a reference.
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Life insurance
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An agreement that guarantees the payment of a stated amount of monetary benefits
upon the death of the insured.
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Limited pay policy |
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A type of whole life insurance designed to let the policy holder pay higher premiums
over a specific period such as 10 or 20 years and then not pay any premium for the
rest of his or her life. |
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M |
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Medical questionnaire / form
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A document completed by a physician or another approved medical examiner and submitted
to an insurer to supply medical evidence of insurability (or lack of insurability)
or in relation to a claim.
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Medical expenses
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Reasonable charges for medical, surgical, X-ray, dental, ambulance, hospital, professional
nursing, prosthetic devices, and funeral expenses. (The insurance company defines
what is reasonable). |
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Mortality charge |
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The charge for the element of pure insurance protection in the life insurance policy. |
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Mortality cost
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The first factor considered in life insurance premium rates. Insurers have an idea
of the probability that any person will die at any particular age; this is the information
shown in a mortality table.
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Mortality rate
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The number of deaths in a group of people, usually expressed as deaths per thousand.
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Mortality table |
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A table showing the incidence of death at specified ages. |
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N |
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Non medical insurance
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A contract of life insurance underwritten on the basis of an insured's statement
of his health with no medical examination required. |
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O |
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Occupational hazard
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A condition in an occupation that increases the peril of accident, sickness, or
death. It usually will mean higher premiums.
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Offer and acceptance |
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The offer may be made by the applicants completing and signing the application,
paying the first premium and, if necessary, submitting to physical examination.
Policy issuance, as applied for, constitutes acceptance by the Insurer. |
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Original age
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Your age when you bought the policy.
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Ownership
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All rights, benefits and privileges under life insurance policies are controlled
by their owners. Policy owners may or may not be the insured. Ownership may be assigned
or transferred by written request of current owner.
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P |
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Para-med (paramedical) examination
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The medical examination of applicants for life insurance. |
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Permanent life insurance |
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A term loosely applied to life insurance policies other than Group and Term, usually
Cash Value Life Insurance, such as Whole Life Insurance.
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Policy
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The printed document issued to the policyholder by the Insurer stating the terms
of the insurance contract. |
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Policyholder
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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.
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Preferred risk
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A risk whose physical condition, occupation, mode of living and other characteristics
indicate a prospect for longevity superior to that of the average longevity of unimpaired
lives of the same age. |
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Premium
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The periodic payment required to keep an insurance policy in force. |
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Premium flexibility
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The policyholder's right to vary the amount of premium paid each month towards a
life policy.
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Primary beneficiary
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In life insurance, the beneficiary designated by the insured as the first to receive
policy benefits. |
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Primary policy |
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The insurance policy that pays first when you have a loss that's covered by more
than one policy.
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Probate costs
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The legal fees and other costs incurred in the probate process, which is the legal
processing of your will. Assets that you leave to other people through your will
cannot be disturbed until the will is probated.
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Provisions
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Statements contained in an insurance policy which explain the benefits, conditions
and other features of the insurance contract.
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Coverages issued at a higher than standard premium because of some health condition
or impairment of the insured. |
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Reinstatement |
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Putting a lapsed policy back in force by producing satisfactory evidence of insurability
and paying the required past due premiums.
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Renewable Term
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Insurance that may be renewed for another term without evidence of insurability
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Representation
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Term life insurance in which the death benefit increases periodically over the policy's
term.
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Revocable beneficiary
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The beneficiary in a life insurance policy in which the owner reserves the right
to revoke or change the beneficiary. Most policies are written with a revocable
beneficiary. |
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Rider
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An attachment to a policy that modifies its conditions by expanding or restricting
benefits or excluding certain conditions from coverage. |
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Risk
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The chance of injury, damage or loss. |
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Risk selection
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The method an underwriter uses to choose applicants that the insurance company will
accept. The underwriter must determine whether risks are standard, substandard or
preferred and set the premium rates accordingly. |
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S |
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Secondary beneficiary
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An alternate beneficiary designated to receive payment usually in the event the
original beneficiary predeceases the insured. |
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Standard risk
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Person who according to a company's underwriting standards is entitled to insurance
protection without extra rating or special restrictions. |
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Substandard risk
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Person who is considered an under-average or impaired insurance risk because of
physical conditions, family or personal history of diseases, occupation, residence
in unhealthy climate or dangerous habits. |
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T |
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Term insurance
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Protection during limited number of years expiring without value if the insured
survives the stated period, which may be one or more years but usually is between
five to twenty years, because such periods usually cover the needs for temporary
protection.
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Term
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Protection during limited number of years expiring without value if the insured
survives the stated period, which may be one or more years but usually is between
five to twenty years, because such periods usually cover the needs for temporary
protection.
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Period for which the policy runs. In life insurance, this is to the end of the term
period for term insurance.
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Tertiary beneficiary
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In life insurance, a beneficiary designated as third in line to receive the proceeds
or benefits if the primary and secondary beneficiaries predeceases the insured.
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Third-party owner
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A policy owner who is not the prospective insured. The policy owner and the insured
may be and often are the same person. Like, you apply for and are issued an insurance
policy on your own life. If, however, your mother applies for and is issued a policy
on your life, then she is the policy owner and you are the insured. |
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