Personal Finance Ch 10

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.

annuity

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

rider

A document attached to a policy that modifies its coverage.

interest-adjusted index

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.

nonforfeiture clause

A provision that allows the insured not to forfeit all accrued benefits.

universal life insurance

A whole life policy that combines term insurance and investment elements.

whole life insurance

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, a cash-value life policy, or an ordinary life policy.

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.