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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.
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.
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 policy owner 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 Insurance
Term life insurance is life insurance coverage at a guaranteed rate
for a specified period of time. (Example: 30 year level term would
guarantee a level premium for 30 years based on a specified death
benefit). Term life insurance is usually the least expensive form of
life coverage. |
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