Accidental Death Benefit – Compensates losses incurred when a policy holder dies within a specified amount of time after an accident.
Age at Issue – Once an insurance policy goes into effect, this is the age of a policy holder. Typically the last or nearest birthday.
Agent – The individual who represents an insurance company and who sells and manages contracts.
Annuitant – The recipient of an annuity contract.
Annuity – The income received from an investment paid out in a series of regular payments.
Beneficiary – The named recipient or group of recipients of funds from life insurance or annuity benefits.
Broker – A 3rd party businessperson who helps individuals or businesses locate appropriate commercial insurance coverage. Usually commission paid and licensed as an insurance dealer.
Broker-Dealer – A licensed businessperson or company registered with the Securities and Exchange Commission (SEC) and the National Association of Securities Dealers (NASD). Also an entity who may legally offer securities to the public.
Cash Surrender Value – The amount that a policy owner can get in the event that the policy quits prior to the insured’s death. In annuities, it’s the deferred accumulated value that a policy holder can get in the event that it’s surrendered while still in accumulation.
Contestable Clause – Declares the time in which an insurance company may contest or void a policy’s terms based on an applicant’s misrepresentation or medical condition.
Contract (Policy) – An agreement that specifies insurance coverage stipulations and participating parties.
Conversion – Allows a policy to be exchanged with another without having to depend on underwriting.
Date of Issue – The date in which an insurance company issues (enables) a policy.
Death Benefit – Money paid to a policy’s beneficiary upon the insured person’s death.
Deferred Annuity – A single tax-deferred or a recurring tax-deferred annuity contract that pays benefits after an explicit period of time has passed or after its annuitant reaches an explicit age.
Evidence of Insurability – Facts that support an applicant’s claim of a health condition or other issue.
Face Amount – The entire value of a fixed-amount life insurance policy made available in the event that a policy holder dies before the policy expires
Fixed Amount Periodic Payment – Guarantees a fixed pay amount and fixed payment schedule .
Fixed Annuity – Guarantees a fixed rate of return released according to a fixed schedule.
Flexible Premium Deferred Annuity – A premium whose amount or payment frequency can be increased by a policy holder after an explicit period of time.
Free-Look Provision – A 30 to 31-day time slot in which an annuitant can cancel a new contract without penalty.
Grace Period – A time span in which an insurance policy’s renewal premium is accepted without penalization.
Immediate Annuity – An annuity contract that’s procurable with one large payment on or right after retirement. Within 12 months, fixed or variable annuity payments begin.
Individual Retirement Annuity (IRA) – A tax-deductible savings plan for a) the self-employed, b) people who earn less than a specified amount, or c) people who can not get a retirement plan from their place of employment.
Insured – A life insurance’s policy holder.
Interest Rate (Current) – The rate of interest applied to a life insurance policy or annuity.
Interest Rate (Loan) – The percentage of a sum of money charged for its use.
Irrevocable Beneficiary – A beneficiary who has to give a policyholder his or her consent to be removed from a policy.
Issue Age – The age of an insured policy holder at the time the policy goes/went into effect. Typically the last or nearest birthday.
Joint Annuity (Joint Life Annuity) – Investment income shared between more than one annuitant for the duration of the group’s longest living entity.
Lapse – When an insurance policy is not renewed by the end of its grace period and thus terminated.
Life Annuity – Guarantees payments during the lifetime of a contract’s annuitant, within a specific time span, or until a monetary amount is met.
Lifetime Income with Period Certain – Guarantees payments during the lifetime of a contract’s annuitant and also guarantees a refund in the event that the contract’s annuitant dies before the annuity’s total payments equal its value.
Loan – The temporary provision of life insurance funds with interest.
Loan (Outstanding) – The value of money owed on a life insurance loan including accrued principal and interest.
Maturity Date – (1) The date in which an insurance company pays a policy’s face value to a living policyholder. (2) The date in which a life insurance policy ends.
Monthly Anniversary – The monthly recurring date in which a life insurance policy was made effective.
Net Cash Surrender Value – A policy’s cash surrender value minus outstanding loans and/or fees for withdrawing funds from a contract before the surrender charge period ends.
Period-Certain Annuity – An annuity that pays benefits in predetermined, equal intervals over a specified period of time.
Planned Periodic Payment – A premium declared at the time an individual files an application and enforceable until maturity.
Policy Anniversary – The date in which a policy’s date of issue reoccurs.
(Policy) Contract – An insurance contract that specifies coverage stipulations and participating parties.
Policy Date – The date in which an insurance policy goes into full effect.
Policy Owner/Contract Owner (Owner) – A person who owns an insurance policy or annuity contract; usually, the client in whose name an insurance policy is written.
Premium – The annual or semiannual cost of insurance.
Rider – An agreed upon amendment made to a life insurance policy or annuity contract. Depending on the contents of the amendment, a rider may increase a premium.
Surrender – When a policy holder terminates a policy in exchange for its cash surrender value or a similar equivalent.
Surrender Charge – The fee for withdrawing funds from a contract before the surrender charge period ends.
Term Insurance – A renewable policy that covers a policyholder for a specified amount of time. Benefits are dispersed when the policyholder dies within the duration of a term (5, 10, 20 years for example).
Universal Life – Compensates premature death with a cash value account that earns interest at a money market rate. Benefits can be altered while the policy is active (within limits). When a cash value account is satisfied, the policy’s premium is payable at any time though there’s the risk that the policy will end if funds fail to cover annual mortality charges and administrative costs.
Variable Life Insurance – Compensates premature death with a savings account that’s invested in a policyholder’s chosen stocks, bonds, and money market mutual funds.
Whole Life Insurance – Cash value life insurance that compensates premature death with a savings account. Utilizes fixed, guaranteed premiums.