sa is commonly used in life insurance as
Also known as survivorship life insurance or joint survivor life insurance, this type of policy is typically used to pay estate taxes upon the death of the second insured. Living trust:A trust created to take effect during the lifetime of the grantor. Most policies can be backdated up to six months. Compare quotes from the top insurance companies and save! Waiver of premium:A rider available with most life insurance policies which exempts the insured from the payment of premiums after he or she has been disabled for a specified period of time. Upon the death of the insured, the amount of the proceeds equal to the cash value generally would go to the noninsured, and the balance of proceeds would go to the insured’s beneficiary. Rider:An attachment which adds something to a policy. Key person (key man or key employee) life insurance: Protection of a business against the financial loss caused by the death of a vital member of the firm. You may feel like you need a translator. LIFE INSURANCE TERMS AND MEANING . A means of protecting a business from the adverse effects of the loss of individuals possessing special managerial or technical skill or experience. In this example, a pilot taking out a $1 million policy would pay an extra $2,000 – $3,000, over and above the normal premium. Conditional receipt:A receipt that is given to a life insurance applicant if all or part of the premium is paid at the time of application. Lump sum:Payment of the entire proceeds of a life insurance policy in one sum. Burial insurance: A general term usually referring to a small policy of life insurance ($5,000 to $25,000) intended only to meet the final expense needs of the insured. A small lump sum is paid out and a portion thereof is tax-free. In the U.S., most states use the common-law system; the other states use community-property. Mortality Factor:One of the basic factors needed to calculate basic premium rates. Death Benefit:In life insurance, the face amount, as stated in the policy, to be paid upon proof of death of the insured. Policyowners authorize the insurance company to draw automatically one payment per month in the amount of their premium from their bank checking account. The term assurance, common in England, is ordinarily considered identical to, and synonymous with insurance. Medical examination:The physical examination of a proposed insured, usually conducted by a licensed physician or another medical examiner, the results of which become part of the application, thus part of the policy contract and attached thereto. By underwriting at a younger age, the premiums will typically be lower than if the policy is dated at the actual date. Underwriter: In life insurance, used to designate that official or person in the home office who, collating all the facts about the risk, accepts the risk and assigns the rate, or declines the risk – the home office underwriter. In some cases, it is advisable to have the policy proceeds paid into a trust and distributed under the terms of a trust agreement, thereby permitting greater flexibility in the distribution of the proceeds. If your child does not drive any of our cars does she have to be on our policy if she lives with us? If you are covered by a life insurance policy but your death falls under one of these exclusions, the insurance company may not have to pay out the benefit.. 5 Common Life Insurance … No endorsement is valid unless signed by an executive officer of the insurance company and attached to and made a part of the policy. If, at any time you come across an insurance term in LifeInsure.com you don’t understand, come back to this glossary and look up the definition. Common Insurance Mistakes Homeowners Make, Car Insurance for Healthcare Professionals, Virginia Car Insurance Regulations & Required Coverage. By: Luke Ashworth: Life insured - This the person whose life is insured. Yearly Renewable term insurance:Renewable term insurance under which the successive terms are for one year. In fact, life insurance can be an uncorrelated asset, particularly participating whole life insurance, providing a fantastic hedge against market risk.. Policy:The written statement of the agreement betweenthe insurer and insured (or policyowner, if other than the insured), including all endorsements and attached papers, which constitutes the entire contract of insurance. Occupational hazard:A danger inherent in the insured’s line of work. Whole life may appear simple because of the guarantees within the policy. Reinstatement: Policyowners’ rights, by the terms of most life insurance policies, to reinstate lapsed polices within a reasonable time aftera lapse, provided they present satisfactory evidence of insurability. It is loosely used to refer to any supplemental agreement attached to and made a part of a policy, whether the conditions or coverage of the policy are expanded or some coverage or conditions are waived. ACCIDENT BENEFIT: Provides for payment of an additional benefit equal to the sum assured in installments on permanent total disability and waiver of subsequently premiums payable under the policy. Second-to-die life insurance: A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured. Usually issued for a period of one or two years, renewable upon application, without the necessity of the applicant’s undergoing the original qualifying requirements. A policyowner can select which account to “invest” the policy’s cash value. 1. Dividend Additions:In a whole life insurance policy, paid-up additional insurance purchased with the dividends on existing policies. Tertiary beneficiary: A beneficiary designated as third in line to receive proceeds or benefits if the primary and secondary beneficiaries do not survive to receive them. Like most insurers, Nationwide uses a credit-based insurance score to predict insurance … In most cases, the medical exam consists of blood pressure readings, blood and urine samples, height and weight measurements and a medical questionnaire. Assets: Anything of value that is owned. By knowing the definitions of these terms, your study of the subject should be much easier. Underwriting: The process of selecting risks and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. Level premium term life insurance policy:A term life insurance policy in which the premium remains unchanged throughout the life of the policy (the term). Survivorship life insurance: A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured. There are six major life insurance classifications, listed … 8-6 Discuss the two most commonly used ways to determine a person’s life insurance needs. For more information, call an insurance professional at LifeInsure.com (866) 868-0099 during normal business hours or contact us through our website. Disability rider:A rider in a life insurance policy that, in the event of an insured’s total disability, the insurer will waive payment of premiums falling due during the period of disability. Life insurance trust:A trust for the purpose of distributing life insurance proceeds. Stock insurance company: An insurance company that is owned and controlled by a group of stockholders whose investment in the company provides the sfety margin necessary in the issuance of guaranteed, fixed premium , non-participating policies. Typical term periods are 10, 15, 20, 25 and 30 years. Can you explain all this classification stuff? Health Analyzer:In order to provide you with the most accurate life insurance quotes, we ask several questions which are based on underwriting guidelines established by the insurance companies we represent. Suite 600, Glendale, CA 91203. Estate planning:The total process of planning an estate, including: (a) estate creation and conservation during the owner’s life; (b) the minimization of state shrinkage at death; (c) the creation of adequate liquidity for estate settlement costs; and (d) a plan for proper estate distribution to the owner’s heirs. When you apply for life insurance, the life insurance … in the later policy years, the cash surrender value usually equals or closely approximates the reserve value. Rated: A term used to describe insurance issued to a person who is a substandard risk at a premium rate which is higher than that charged for a standard risk. The transfer must occur between two like policies and must be transferred directly from the old insurance company to the new one. No-lapse guarantee rider:A rider sometimes offered with a universal life insurance policy that guarantees that the policy will never lapse, and the death benefit and premiums will never rise, even if the cash value of the policy falls to zero, provided that premiums are paid when due. This may be either an individual or a company such as a bank or trust company. The former covers the insured for that person’s entire life, while term life insurance … Some companies us the age at the last birthday, while others use the age at the nearest birthday, prior or succeeding. Standard Risk: A person who, according to the insurer’s underwriting standard, is entitled to insurance protection without extra rating or special restrictions. What is my eligibility for full membership? A policyowner can select which account to “invest” the policy’s cash value. Very few people consider the fact that life insurance is a property. Impaired risk: In life insurance, a person who has an unfavorable health condition, or is exposed to an above-average occupational hazard, which makes him/her a substandard risk. As a general rule, no interest is charged on over-due premiums if paid during the grace period. Participating policies provide that their dividends may be used as single premiums at the insured’s attained age to purchased paid-up insurance as additions to the amount of insurance specified on the face of the contract. Paid-up Policy:Insurance on which the policyowner has completed payments, but which has not matured. Evidence of insurability:Any statement of proof of a person’s physical condition, occupation, etc., affecting the acceptance of the application for insurance. Non-medical insurance:Life insurance issued without requiring the applicant to submit to a regular medical examination. Net worth:Value of a business (or individual) calculated by subtracting its total liabilities from its total assets. US Insurance Agents works hard to provide our users with a fast and simple way to get and compare insurance rates for multiple lines of insurance. Beneficiaries have equitable title to the trust property. TERM LIFE INSURANCENO EXAM LIFE INSURANCEFINAL EXPENSE INSURANCEDISABILITY INSURANCE, 8 Types of Life Insurance (and How to Choose the Right Policy). Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. Flat extra premium:Premium added on top of the regular premium of a life insurance policy to cover added risk, typically that of high-risk occupations or activities (e.g. Endowment policy:A life insurance policy in which the cash value and face value are equal to each other at the policy’s maturity date; a policy under which the face amount is payable on a specified future date (maturity date) if the insured is then living, or at the insured’s death, if that should occur sooner. In life insurance, a person generally is considered to have an unlimited insurable interest in himself or herself. Which of the following are common uses of life insurance proceeds?) Trust: An arrangement in which property is held by a person or corporation (trustee) for the benefit of others (beneficiaries). Age: For life insurance purposes, the age in years of an applicant or insured. Mutual life insurance company:A life insurance company that has no capital stock or stockholders. Natasha McLachlan is a writer who currently lives in Southern California. Trustee: One who holds the legal title to the property for the benefit of another. Not Taken: A policy that has been issued, but not accepted and paid for by the prospective policyowner and, therefore, is returned to the company without ever having been in force. Premium:The periodic payment required to keep a specific life insurance policy in force. We’ll take you through the most common life insurance policies and help you find the one you need. Borrowed car ticket for no insurance who pays? Mortality:The relative incidence of death. Earned income:Gross salary, wages, commissions, fees, etc., derived from active employment. If the insurance companies’ projections do not come through, then you may have to come up with higher premiums later, have lower than expected cash values or even lose the policy. If I need FR44 and move out of state, does the FR 44 go away after 3 years? It is owned by its policyowners and is managed by a board of directors chosen by the policyowners. There are no industry standards, but the health classes are typically Preferred Plus, Preferred, Standard Plus and Standard for non-tobacco users. A child rider allows parents to purchase life insurance for their children (all in one rider), without having to purchase a separate policy for each child. I do not own a car but drive my boyfriends car and I want to protect myself if I get in an accident. Issue date:The date upon which the life insurance application is approved and the policy is issued by the insurer. Also, sometimes referred to as a secondary beneficiary. Dividend:In a participating whole life insurance policy, the refund of that part of the premium paid at the beginning of the year which still remains after the company has set aside the necessary reserve and made deductions for claims and expenses. Agent: Anyone who solicits insurance or aids in the placing of and delivering of insurance policies and/or the collection of premiums on behalf of an insurance company. Charitable trust:A trust designed for the benefit of a class or the public generally. Fortunately, it doesn’t have to be that way. Common Life Insurance Exclusions. Because of the limited underwriting, this type of policy usually has much higher premiums than fully underwritten policies. Endow:A permanent life insurance policy is said to endow when its cash value equals the face amount. Policy owner:The person who has ownership rights in an insurance policy and who may or may not be the insured. Insurance coverage:The total dollar amount of insurance carried by an individual. There are also separate classes for tobacco users. Where else could you make a premium payment of $100.00, and create an immediate estate or property valued at $250,000.00. Other Ways to Use Life Insurance to Pay for Long-Term Care. Term Life Insurance. See contract and insurance policy. Under a collateral assignment, the creditor is entitled to be reimbursed out of policy proceeds for the amount owing to him or her; the beneficiary is entitled to any excess of policy proceeds over the amount due the creditor in the event of the insured’s death. Carrier:In insurance, another term for insurer, used because the insurance company assumes or carries the risk for its policy owners. Rather than talking to us in a normal, human language, insurance companies seem to derive joy from speaking in a strange language of acronyms. Life insurance:Insurance in which the risk insured against is the death of a particular person (known as the insured), upon whose death within a stated term (for term insurance), or whenever death occurs (for permanent insurance), the insurance company agrees to pay a stated sum or income to the beneficiary. Life insurance policies are widely broken down into two major types: what’s known as whole (or permanent) life insurance, and term life insurance. The dividend may also include a share in the company’s investments, mortality and operating profits. Variable universal life insurance:A permanent life insurance policy with sub-accounts for various investments similar to mutual funds. Sum Assured ii. When evaluating rates, please verify directly with your insurance company or agent. Contestable clause:That section of an insurance contract which states conditions under which the policy may be contested or voided. Insurance contract:The legally binding unilateral agreement between an insurance company and a policyowner. Guaranteed insurability option:An option offered under some life insurance policies, whereby additional insurance may be purchased at various future times without a new medical examination or other evidence of insurability. Such shares are commonly called dividends. Select the expanded form of SA as commonly used in life insurance a. Reducing term life insurance was at one time predominantly used for mortgage insurance, but as level term life insurance premiums decreased over the years, it has become the policy of choice for mortgage insurance. Actuary: A professional person trained in mathematics, statistics, and legal-accounting methods, and principles of the operation of insurance, annuities and retirement plans. This often results in higher premiums. without requiring the applicant to submit to a regular medical examination. Binding receipt: The receipt for payment of the first premium, which assures the applicant that, if he or she dies before receiving the policy, the company will pay the full claims if the policy is issued (or would have been issued) as applied for. In some cases, the insurance company will permit agent contracting paperwork to be submitted along with the first application in that state.