Primerica
Basic Illustration
A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.
Buy-Sell agreement
A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled
Certificate of Insurance
A legal document that indicates that an insurance policy has been issued, and that state both the amounts and types of insurance provided
Agent/Producer
A legal representative of an insurance company; the classification of -producer- usually includes agents and brokers; agents are the agents of the insurer.
Avoidance
A method of dealing with risk by deliberately keeping away from it (e.g. if a person wanted to avoid the risk of being killed in an airplane crash, he or she might choose to never fly in a plane.)
Convertible
A policy that may be exchanged for another type of policy by contractual provisions. at the option of the policyowner, and without evidence of insurability (i.e. term life changed to a form of permanent life).
Commingling
A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds he/she is holding in trust.
Buyer's Guiude
A booklet that describes insurance policies and concepts , and provides general information to help an applicant make an informed decision
Aleatory
A contract in which participating parties exchange unequal amount. Insurance contract are aleatory int hat the amount the insured will pay in premiums is unequal to the amount the insurer will pay in the event of a loss
Adhesion
A contract offered on a "take-it-or-leave-it" basis by an insurer, in which the insured's only option is to either accept or reject the contract. Any ambiguities in the contract will be settled in favor of the insured.
Annual statement
A detailed financial report that an insurance company must submit every year to the insurance department of state(s) in which is conducts business
Certificate of Authority
A document that authorizes a company to start conducting business specifics the kind(s) of insurance a company can transact. It is illegal for an insurance company to transact insurance without this certificate.
Contributory
A group insurance plan that requires the employees to pay part of the premium.
Adult Day Care
A program for impaired adults that attempts to meet their health, social, and functional needs in a setting away from their homes.
Coordination of Benefits
A provision that helps determine the primary provider in situations where an insured is covered by more than one policy, thus avoiding claims overpayments.
Coinsurance Clause
A provision that states that the insurer and the insured will share the losses covered by the policy in a proportion agreed upon advance.
Claim
A request for payment of the benefits provided by an insurance contract.
Credit life Insurance
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.
Certificate
A statement or booklet that confirms that a policy has been written and that describes the coverage in general
Attending Physician statement (APS)
A statement usually obtained from the applicant's doctor.
Binder (Binding Receipt)
A temporary contract that puts an insurance policy into force before the premium has been paid
Conditional Contract
A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable.
Decreasing term
A type of life insurance that features a level premium and a death benefit that decreases each year over the duration of the policy.
Consumer report
A written and/ or oral statement regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.
Custodial Care
Care that is rendered to help an insured complete his/her activities of daily living.
Contract
An agreement between two or more parties enforceable by law.
Controlled Business
An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer or employees.
Administrator
An individual appointed by a court as fiduciary to settle the financial affairs and estate of a deceased person.
Admitted (Authorized) Insurer
An insurance company authorized and licensed to transact buisness in a particular state
Authorized (Admitted) Insurer
An insurance company authorized and licensed to transact business in a particular state.
Coercion
An unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance.
Defamation
An unfair trade practice in which one agent of insurer makes an injurious statement about another with the intent if harming the person's or company's reputation
NAIC
National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 4 U.S territories, formed to resolve insurance regulatory issues.
Death benefit
The amount payable upon the death of the person whose life is insured.
Cash Value
The amount to which a policy owner is entitled if the policy is surrendered before maturity
Coverage
The inclusion of causes of (perils) which are covered within a scope of a policy
Birthday Rule
The method of determining primary coverage for a dependent child, under which the plan of a parent whose birthday occurs first in the calendar year is designated as primary.
Concealment
The withholding of known facts that, if material, can void a contract.
Assignment
Transfer of rights of policy ownership
contingent beneficiary
a beneficiary who has second claim to the policy proceeds after the death of the insured (usually after death of the primary beneficiary)
Primary Beneficiary
a beneficiary who has the first claim to the policy proceeds after the death of insured.
debtor
a borrower of funds
Insurance policy
a contract between policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events.
Annuity
a contract that provides the income for a specified period of years or for life
Alzheimer's Disease
a disease that causes the victim to become dysfunctional due to degeneration of brain cells and severe memory loss.
application
a document that provides information for underwriting purposes. After the policy is issued, any unanswered questions are considered waived by the insurer.
creditor
a lender of money
Reciprocity/ Reciprocal
a mutual interchange of rights and privileges.
Applicant or proposed insured
a person applying for insurance
Applicant
a person making application for, or offering himself, herself, or another to be insured under an insurance contract
Minor
a person under legal age
Beneficary
a person who receives the benefits of an insurance policy
Activities of daily living (ADL's)
a person's essential activities that include bathing, dressing,eating, transferring, toileting, continence
estate
a person's net worth
accidental death benefits
a policy rider that states that the cause of death will be analyzed to determine if it complies with he policy description of accidental death.
cash value
a policy's savings element or living benefit
adjusters
a representative of an insurance company who investigates and acts on behalf of the company to obtain agreements for the amount of the insurance claim
Solvency
ability to meet financial obligations (e.g. an insurance company maintains enough assets to pay claims)
trust
an arrangement in which funds or property are held by a person or corporation for the benefits of another person (trust beneficiary)
Broker
an individual who represents an insured in the process of purchasing and negotiating a contract of insurance
acquired immunodeficiency syndrome (AIDS)
an infectious and incurable disease caused by the human immunodeficiency virus (HIV)
Alien insurer
an insurance company that is incorporated outside the United States
accidental death insurance
an insurance policy that provides payment if the insured's death is the result of an accident
Broker
an insurance producer not appointed by an insurer and is deemed to represent the client
Agency
an insurance sales office or company
nonforfeiture values
benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses
accumulate
build up
fixed life insurance product
contracts that offer guaranteed minimum or fixed benefits
life insurance
coverage on human lives
cash value
equity amount accumulated in permanent life insurance
Securities
financial instruments that may trade for value (for example, stocks, bonds, options)
policy maturity
in life policies, the time when the face value is paid out
Adjustable life
life insurance that permits changes in the face amount, premium amount, and period of protection, and the duration of the premium payment period.
Lump-sum
payment of the entire benefit in one sum
lapse
policy termination due to nonpayment of premium
Illustrations
presentation or deception of nonguaranteed elements of a life insurance policy
accelerated benefits
riders attached to life insurance policies that allow death benefits to be used to cover nursing or convalescent home expenses
liquidation
selling assets in order to raise capital
agents authority
special powers granted to an agent by his or her agency contract
Countersignature
the act of signing an insurance policy by a licensed resident agent
face amount
the amount of benefit stated in the life insurance policy
death benefit
the amount paid upon the death of the insured in a life insurance policy
Apparent Authority
the appearance or the assumption of authority based on actions, words or deeds of the principal or because of circumstances the principal created
Agent Appointment
the authorization of an agent to act for or represent an insurer
Consideration
the binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium, the consideration on the part of the insurer is the promise to pay in the event of a loss.
Insurer (principal)
the company who issues an insurance policy
Principal
the face value of the policy; the original amount invested before the earnings
attained age
the insured's age at the time the policy is renewed or replaced
Premium
the money paid to the insurance company for the insurance policy
Commision
the payment made by insurers to agents or brokers for the sale and service of policies.
Insured
the person covered by the insurance policy . This person may or may not be the policyowner.
policyowner
the person entitled to exercise the rights and privileges in the policy.
Beneficiary
the person who receives the proceeds from the policy when the insured dies.
Level Premium
the premium that does not change throughout
Actual Cash Value (ACV)
the required amount to pay damages or for property loss. This amount is calculated based on the property's current replacement value minus depreciation
Adverse Selection
the tendency of risk with higher probability of loss to purchase and maintain insurance more often than the risk who present lower probability.
accumulation period
the time before an annuitant's retirement during which the annuitant is making payments or investments in an annuity.
assignment
the transfer of ownership rights of a life insurance policy from one person to another
Endow
to have the cash value of a whole life policy reach the contractual face amount
deffered
withheld or postponed until a specified time or event in the future.
