Contract.

The binding agreement between the insured and the insurer.

Cession.

Assignment of policy to another entity.

Inflation Protection.

An optional property coverage endorsement offered by some insurers that increases the policy's limits of insurance during the policy term to keep pace with inflation.

Policy Fee.

Flat amount added to the basic premium rate as a cost of maintaining a policy,

Waiting period.

Is the amount of time you have to wait before you can make a claim? This excludes accidental claims.

Accidental death.



An addition, dismemberment insurance (also known as AD&D) is a form of insurance covering death or specific types of injury because of an accident.

Beneficiary.

In trust law, is the person or persons who are entitled to the benefit of any trust arrangement such as insurance?

Maturity benefits

Money back benefits payable after the contract completes the agreed upon duration.

Commencement date.

The first day o the month following receipt of the first premium and proposal form for the policy has been received and approved by the company.

Accidental Death Benefit (ADB) .

This is an optional policy rider that increases the amount of death benefit paid if you die as the result of an accident.

Anniversary.

This is the date (one year or more) following the date your policy goes into effect.


Application.

This is a document that, when completed, requests coverage from the insurance company. The insurer reviews the application and, along with other information, determines whether to accept the application and issue a policy.

Cash Surrender Value.

This is an amount payable, to the policy owner upon surrender of the policy. It is equal to the Cash Value less any surrender charges, any monthly contract charges and any policy debt.

Cash Value.

In a cash value (also called "permanent") life insurance policy, this is the money that can accumulate in the policy. This money usually accumulates on a tax-deferred basis. As the policy owner, you can access the available cash value at any time and for any purpose. Some people borrow cash values for down payment on a home, to help pay college bills, or to provide supplemental income in retirement. Note that borrowed cash values will reduce the death benefit of your policy or otherwise negatively impact overall policy values.

Cash Value Policy.

A "permanent" life insurance policy that offers the potential for cash value accumulation and life-long protection provided premiums are paid. This contrasts with term life insurance, which does not accumulate cash value and generally expires at the end of the term without value. For an annuity, this means the current gross value of the policy.

Endorsement.

This is an amendment to a life insurance or annuity policy, which alters the provisions of the initial contract.

Exclusion.

A policy provision indicating a circumstance or event, such as an act of war that would cause the benefit to be denied.

Grace Period.

The time between an insurance policy's premium due date and the date the policy will lapse if the premium remains unpaid. Typically, grace periods are 30 or 31 days, and no interest is charged on premiums paid during that time. A grace period protects insured's and their beneficiaries from having the policy terminate inadvertently.

In-force.

Existing insurance policies.

Insurable Interest.

The principle requiring that no policy will be issued unless the policy owner and beneficiaries would be in a position to suffer a financial loss at the death of the insured. For example, an insurable interest can be based on personal relationship (one spouse is always presumed to have an insurable interest in the other) or business relationship (as in one partner on the life of another or a lender on the life of the borrower).

Insurance.

a legal contract between you and the insurer that transfers a specified covered risk to the insurer in exchange for a premium (also known as consideration). The details of coverage are specified within the policy itself.

Insured.

The name of the person or persons covered under the Insurance of the policy.
Insurer.

The Insurance Company.

Lapse.

Historically, this is the termination of an insurance policy due to non-payment of premium by the end of the grace period. At that point, the policy will either terminate without value or fall under one of the non-forfeiture options (reduced paid-up coverage, extended term coverage, etc.). With variable and interest-sensitive life insurance policies, lapse may result when there is inadequate cash value in the policy to pay the next mortality and expense charge.

Loan.

In life insurance, money loaned at interest by the insurance company to a cash value life insurance policy owner, using the policy's cash value as security for the loan. Policy loans will affect the death benefit.

Maturity Date.

In life insurance, the date upon which the policy endows for its full face value.

Misrepresentation.

This in insurance is a false, incorrect or incomplete statement of a material fact, made on the application.

Mode (of Payment).

This is the frequency and method by which premiums are paid. Standard premium modes are annually, semi-annually, quarterly, monthly and automatic payment (deduction from checking or savings account).

Paid-Up Insurance.

Life insurance on which no further premiums are required, yet the policy will remain in force for life (unless the policy is terminated by the policy owner).

Payroll Deduction.

A convenient method of purchasing insurance and other benefits through work by having premiums deducted by the employer and forwarded to the insurance company.

Underwriter.

An insurance company employee who reviews applications and makes underwriting decisions. Also, an agent.

Underwriting.

The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will provide an applicant with insurance coverage.

Waiver of Premium.

This is an optional life insurance policy provision that exempts the insured, from the payment of premiums if he or she becomes disabled.