{personal finance ch 12

annuity

A contract that provides a regular income, typically for as long as the person lives.

chartered life underwriter

A life insurance agent who has passed a series of college level examinations on insurance and related subjects

suicide clause

A provision stating that if the insured dies by suicide during the first two years the policy is in force, the death benefit will equal the amount of the premium paid.

nonforefeit

A provision that allows the insured not to forfeit all accused benefits

whole life policy

An insurance plan in which the policyholder pays a specified premium each year for as long as he or she lives; also called a straight life policy, cash-value life policy, or ordinary life policy.

double indemnity

a benefit under which the company pays twice the face value of the policy if the insured's death results from an accident

rider

a document attached to a policy that modifies its coverage

interest adju

a method of evaluating the cost of life insurance by taking into account the time value of money

beneficiary

a person designated to receive something, such as life insurance proceeds, from the insured

incontestability clause

a provision stating that the insurer cannot dispute the validity of a policy after a specified period

universal life

a whole life policy that combines term insurance and investment elements

term insurance

life insurance protection for a specified period of time; sometimes called temporary life insurance

nonparticipating policy

life insurance that does not provide policy dividends; also called a nonpar policy

participating policy

life insurance that provides policy dividends; also called a par policy

cash value

the amount received after giving up a life insurance policy

underwriting

the process that insurance companies use to determine the premiums that will be charged and whom they will insure