Accelerated Benefits Rider

A life insurance rider that allows for the early payment of some portion of the policy's face amount should the insured suffer from a terminal illness or injury.

Accidental Death Benefit Rider

A life insurance policy rider providing for payment of an additional cash benefit related to the face amount of the base policy when death occurs by accidental means.

Accidental Death Insurance

Insurance providing payment if the insured's death results from an accident.

Annually Renewable Term

A form of renewable term insurance that provides coverage for one year and allows the policy owner to renew his or her coverage each year, without evidence of insurability. Also called yearly renewable term.

Attained Age

Your current age. Your attained age is one of the factors life insurance companies use to determine your premiums. The older you are, the greater chance you'll die while you are covered-so the higher your premium.

Backdating

A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age of the consumer at issue lower than it actually was in order to get lower premium. State laws often limit to six months the time to which policies can be backdated.

Beneficiary

The person designated to receive the death benefit when the insured dies.

Contingent Beneficiary

Person or persons named to receive proceeds in case the original beneficiary is not alive. Also referred to as secondary or tertiary beneficiary.

Death Benefit

The amount of money paid to the beneficiary when the insured person dies.

Evidence of Insurability

Any statement of proof of a person's physical condition, occupation, etc., affecting acceptance of the applicant for insurance.

Exclusions

Specified hazards listed in a policy for which benefits will not be paid.

Face Amount

The amount of insurance provided by the terms of an insurance contract, usually found on the first page for the policy. In a life insurance policy, the death benefit.

Final Expenses

Expenses incurred at the time of a person's death. These include funeral costs, court expenses associated with probating his or her will, current bills or debt, and taxes. Depending on their circumstances, the survivors may also want to pay the outstanding balances of mortgage and loans.

Fixed Benefit

A death benefit, the dollar amount of which does not vary.

Free Look

Provision required in most states whereby policy owners have up to 30 days to examine their new policies at no obligation.

Grace period

Period of time after the due date of a premium during which the policy remains in force without penalty. Typically 31 days for life insurance.

Graded Premium Policy

A type of whole life policy designed for people who want more life coverage than they can currently afford. They pay a lower premium rate that increases gradually over the first three to five years and then remains constant over the life of the policy.

Guaranteed Term

A form of renewable term insurance that remains in force as long as the premiums are paid on time. With guaranteed term insurance, the insurance company cannot terminate the policy during the term.

Increasing Term Insurance

Term life insurance in which the death benefit increases periodically over the policy's term. Usually purchased as a cost of living rider to a whole life policy.

Insurable Interest

Requirement of insurance contracts that loss must be sustained by the applicant upon the death of another and it must be sufficient to warrant compensation.

Irrevocable Beneficiary

A beneficiary that cannot be changed without that beneficiary's consent.

Level Term Insurance

Term coverage on which the face value and premiums remain unchanged from the date the policy comes into force to the date the policy expires.

Life time maximum

The total amount of money the insurance policy will pay out.

Limited Pay Policy

A type of whole life insurance designed to let the policyholder pay higher premiums over a specific period such as 10 or 20 years and then not pay any premiums for the rest of his or her life.

Non Medical Insurance

A contract of life insurance underwritten on the basis of an insured's statement of his health with no medical examination required.

Occupational Hazard

A condition in an occupation that increases the peril of accident, sickness, or death. It usually will mean higher premiums.

Other Insured Rider

A term rider covering a family member other than the insured that is attached to the base policy covering the insured.

Para-Med (Paramedical)

A physician, nurse, or para-med appointed by the medical director of a life insurance company to examine applicants.

Pre-existing condition

A physical or mental illness or injury that is diagnosed or being treated for prior to becoming covered by a health or life insurance plan.

Premium

The dollar amount usually paid monthly or quarterly that an insurer pays in exchange for health insurance coverage.

Primary Beneficiary

In life insurance, the beneficiary designated by the insured as the first to receive policy benefits.

Provisions

Statements contained in an insurance policy which explain the benefits, conditions and other features of the insurance contract.

Quote

A undetermined premium price that generally summarizes the costs of life insurance.

Rate

Coverage's issued at a higher rate than standard because of some health condition, or impairment of the insured.

Re-entry Option

An option in a renewable term life policy under which the policy owner is guaranteed, at the end of the term, to be able to renew his or her coverage without evidence of insurability, at a premium rate specified in the policy.

Renewable

Term/Annual Renewable Term insurance that may be renewed for another term without evidence of insurability. Level term usually turns into renewable term with increasing premiums after the level premium paid.

Revocable Beneficiary

The beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary. Most policies are written with a revocable beneficiary.

Rider

An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.

Secondary Beneficiary

An alternate beneficiary designated to receive payment, usually in the event the original beneficiary predeceases the insured.

Single Premium Policy

A whole life policy for people who want to buy a policy for a one-time lump sum, and then be covered for the rest of their lives without paying any additional premiums.

Standard Risk

Person, who, according to a company's underwriting standards, is entitled to insurance protection without extra rating or special restrictions.

Substandard Risk

Person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.

Term insurance

Protection during limited number of years; expiring without value if the insured survives the stated period, which may be on or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.

Underwriter

Company receiving premiums and accepting responsibility for fulfilling the policy contract. Also, company employee who decides whether the company should assume a particular risk; or the agent who sells the policy.

Whole Life

Permanent Life Insurance that builds cash value. Premiums stay the same for the entire active policy and the coverage typically goes to age 100.

Whole Life Insurance

Life insurance that is kept in force for a person's whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. The variable in a Whole Life Policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policy holder in the form of dividends. Policyholders can use the cash from dividends in many ways. The three main uses are: it can be used to lower or vanish premiums, it can be used to purchase more insurance or it can be used to pay for term insurance.