Life and health definitions
Adhesion
"Take it or leave it"
Buyers guide
A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.
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.
InsurED
A person covered by an insurance policy
Estate
A persons net worth
Attending Physician's Statement (APS)
A statement usually obtained from the applicant's doctor.
Agents report
A written report from the agent submitted to the insurer along with the application disclosing what the agent knows, observed, or learned about the proposed insured's risks.
Solvency
Ability to meet financial obligations
Substandard Risk
An applicant or insured who has a higher than normal probability of loss, and who may be subject to an increased premium.
Standard Risk
An applicant or insured who is considered to have an average probability of a loss based on health, vocation and lifestyle.
Medical Information Bureau (MIB)
An information database that stores the health histories of individuals who have applied for insurance in the past. Most insurance companies subscribe to this database for underwriting purposes.
Preferred Risk
Are those individuals who meet certain requirements and qualify for lower premiums.
Nonforfeiture Options
Benefits in a life insurance policy that the policy owner cannot lose even if the policy is surrendered or lapses
Personal
Between insurer and insured
accumulate
Build up
Perils
Causes of loss
Conditional
Certain conditions must be met
Hazards
Conditions and actions that increase risk or probability of loss
Life insurance
Coverage of a humans life
Human life value approach (HLVA)
Gives the insured an estimate of what would be lost to the family in an event of the premature death of the insured.
Delivery receipt
Insurance companies require producers to obtain signed delivery receipts as proof of delivery. The delivery receipt is important because it can designate the start of the policy's free-look period.
whole life insurance
Insurance that is kept in force for a person's entire life and pays a benefit upon the person's death, whenever that may be.
Term Insurance
Life insurance coverage for a specified period of time, less expensive than whole
Participating policy ( mutual)
Life insurance policy that distributes dividends to policy owners by cash payments etc.
indemnity
Main principal of insurance, meaning that the insured cannot recover more then their loss the purpose of insurance is to restore the insured to the same position as before the loss
Unilateral
One sided promise
Lump sum
Payment of the entire benefit
Illustrations
Presentations or depiction of non guaranteed elements of a life insurance policy
Loss
Reduction of value
Liquidation
Selling assets in order to raise capital
Adverse selection
Tendency of individuals with higher probability of loss to purchase insurance more often than those who present lower risk
Death benefit
The amount paid upon the death of the insured in a life insurance policy
Life insurance producer
The company's field underwriter ( agent)
Underwriting
The process of reviewing, accepting or rejecting applications for insurance.
Policy maturity
The time when the face value is paid out
Key person
This is a form of Business Insurance used to protect a business from the possible economic loss suffered due caused by the unexpected death of a crucial employee or partner.
Insurance
Transfer of loss
aleatory
Unequal exchange
Insurance policy
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events
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
Needs approach
a method of determining how much life insurance you need based on funds your family would require to maintain their lifestyle after your death
Reciprocity
a mutual interchange of rights and privileges
Applicant/Proposed insured
a person applying for insurance
Minor
a person under legal age
Cash value
a policy's savings element or living benefit
Policy summary
a written statement describing the features and elements of the policy being issued
Premium
an amount to be paid for an insurance policy.
Broker
an insurance producer not appointed by an insurer and is deemed to represent the client
Variable life insurance products
contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance
Variable Life Insurance
contracts in which the cash values accumulate based upon a specific portfolio of stocks without guarantees of performance ( annuities)
Fixed Life Insurance
contracts that offer guaranteed minimum or fixed benefits ( annuities)
Securities
financial instruments that may trade for value (for example, stocks, bonds, options)
Beneficiary
one who receives benefits
Lapse
policy termination due to nonpayment of premium
Deferred
postponed or delayed
Face amount
the amount of benefit stated in the life insurance policy
Insurer (principal)
the company who issues an insurance policy
Attained age
the insured's age at the time the policy is issued or renewed
Law of Large Numbers
the larger the number of individuals that are randomly drawn from a population, the more representative the resulting group will be of the entire population
Policy owner
the person entitled to exercise the rights and privileges in the policy
Level premium
the premium that does not change throughout the life of a policy
Endow
to have the cash value of a whole life policy reach the contractual face amount