| Beneficiary: |
A person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. |
| Cash Value: |
The amount of cash accumulated inside some types of permanent life insurance policies. The cash value typically grows over time and often earns a rate of interest, depending on the type of policy. It can be borrowed by the insured or withdrawn when the policy is surrendered. |
| Policy Loan: |
A loan from the insurance company to the policy owner secured by the policy's cash value. |
| Contingent Beneficiary: |
A person(s) designated by the policy owner to receive policy proceeds if the Primary Beneficiary is deceased at the time benefits become payable. This is often referred to as a secondary beneficiary. |
| Death Benefit: |
The dollar amount of coverage that is paid to the designated beneficiary(s) of a life insurance policy upon the insured's death |
| Evidence of Insurability: |
Factual information used by insurance companies to determine an applicant's qualification for insurance. Examples of information used may include paramedical exams, medical records, application statements, and motor vehicle reports among others. |
| Face Amount: |
The amount of coverage provided by a life insurance policy. This is also referred to as Coverage Amount. |
| Final Expenses: |
Expenses incurred at the time of a person's death including funeral costs, probate costs, current liabilities and taxes. |
| Paramedical Exam/Paramed Exam: |
A brief physical examination the insurer typically requires of applicants during the underwriting process. The exam is usually performed by a registered nurse at a time and location convenient to the applicant. The exam usually consists of measurements (e.g. height/weight, blood pressure, and heart rate), body fluid samples (e.g. urine, blood) and a medical history questionnaire. The insurance company pays for the exam. |
| Medical Examination: |
An exam completed by a physician. The exam may be required as a part of medical underwriting. |
| Medical Information Bureau (MIB): |
A service that compiles medical information and application history of individuals who have applied for insurance in the past. Most insurance companies check an applicant's MIB report during underwriting.
Rating Class: It is the appropriate rate category to which an applicant qualifies according to an insurance company's underwriting guidelines. Common rate classes are Preferred Plus, Preferred, Standard Plus, Standard and Substandard.
Guaranteed Term Life Insurance A type of renewable term life insurance that remains in force provided the policy premiums are paid on time. |
| Level Term Insurance: |
A type of term life insurance policy where the face value remains the same throughout the period specified in the insurance policy |
| Return of Premium Insurance: |
Term insurance premiums are guaranteed to remain the same throughout the level-premium period (15,20or 30 years) the cumulative premiums paid will be returned to you at the end of the policy period. |
| Term Life Insurance: |
A life insurance product that provides death benefit protection for a specified period of time. The policy pays benefits only if the insured dies during the term. |
| Term Conversion: |
A policy provision that allows a term life insurance policy to be converted to a permanent life policy offered by the company for a specified period of time. Usually the insured can convert to a permanent policy at the same amount of coverage without providing evidence of insurability. |
| Universal Life Insurance: |
A type of permanent life insurance that combines term life insurance and an investment feature into one contract. Universal Life insurance policies generally offer flexible premium payments. |
| Variable Life Insurance: |
A variation of permanent life insurance that offers cash values that fluctuate based on the performance of the underlying mutual funds in the investment account. |
| Whole Life Insurance: |
A type of permanent life insurance which provides a level death benefit upon the insured's death, or a cash endowment upon policy maturity that is equal to the death benefit. Whole life insurance policies also accumulate cash values. |
