References and Resources
GLOSSARY OF LIFE INSURANCE TERMS
Accidental death benefit: A benefit, in addition to
the face amount of a life insurance policy, to be paid if the insured
dies as the result of an accident. It is sometimes referred to as
'double indemnity.'
Actuary: A person professionally trained in the
technical aspects of insurance and related fields, particularly in the
mathematics of insurance (calculation of premiums, reserves, etc.)
Adjustable life insurance: A type of insurance that
allows the policy holder to change the plan of insurance, raise or
lower the face amount of the policy, increase or decrease the premium
and lengthen or shorten the protection period.
Agent: An insurance company representative licensed
by the state, who sells insurance and provides service to the
policyholder for insurance company. Also known as Life Underwriter.
Annual renewable term policy: A term policy that
assures the policy will be renewed for the duration of the term,
without a medical exam.
Beneficiary: The person named in a life insurance
policy to receive the insurance money at the death of the insured.
Cash surrender value: The amount of cash available
when a policy owner voluntary terminates a policy before it becomes
payable by death or maturity.
Convertible term insurance: Term insurance that can
be exchanged for another plan of insurance at the option of the
policyholder without evidence of insurability.
Credit life insurance: Term life insurance issued
through a lender or lending agency to cover payment of a loan,
installment purchase, or other obligation in case of death.
Decreasing term insurance: Insurance that pays out a
decreasing amount of money the closer the policyholder draws to the
end of the term.
Dividend: A return of part of the premium on
participating insurance, which reflects the difference between the
premium charged and the combination of actual mortality payouts,
expenses, and investments experienced by the company. Such premiums
are calculated to provide some margin over the anticipated cost of the
insurance protection.
Double indemnity: See 'Accidental death
benefit.'
Extended term: A type of permanent life insurance
policy that allows the policyholder to pay no more premiums past a
certain point, give up the cash value of the policy, and instead
continue to be fully insured for a specified number of years, months,
and days.
Face value: The amount stated on the face of the
policy that will be paid in case of death or at the maturity of the
policy. It does not include additional amounts payable under
accidental death or other special provisions, or acquired through the
application of policy dividends.
Insured or insured life: The person on whose life the
policy is issued.
Lapsed policy: A policy terminated by the insurance
company because premiums were not paid.
Life Underwriter: See 'Agent.'
The information given in this publication is for educational purposes
only. Reference to commercial products or trade names is made with the
understanding that no discrimination is intended and no endorsement by the
University of Minnesota Extension is implied.
Produced by Communication and Educational Technology Services, University of
Minnesota Extension.
In accordance with the Americans with Disabilities Act, this material is available in alternative formats upon request. Please contact your University of Minnesota Extension office or the Distribution Center at (800) 876-8636.
University of Minnesota Extension is committed to the policy that all persons shall have equal access to its programs, facilities, and employment without regard to race, color, creed, religion, national origin, sex, age, marital status, disability, public assistance status, veteran status, or sexual orientation.
|
Planning Ahead for Retirement