Life Insurance Definitions

Declined - Term used for denial of an application by an insurance company, for an applicant that had a serious health problem and tried to get insurance

Rated Up - Someone who's is charged higher premiums because they didn't buy coverage when they were healthily

Re-offered - When a carrier offers insurance to a high risk person, but at a higher premium than initially quoted

Tabled - Higher than standard risks to the insurance company.

Age Limits - The age, usually around 70-85, that an insurance company will not issue or renew a life policy.

Application (APP) - A form on which the prospective insured states facts requested by the insurance company and on the basis of which (together with any information from medical examiners, attending physicians, hospitals, investigations, and the agent) the insurance company decides whether or not to accept the risk, modify the coverage offered, or decline the risk. An application without premium money is a request for an offer. With premium money, it is an offer itself, unless the insurance company declines to issue as applied for.

Assigned Risk - A risk which underwriters do not care to insure, but because of state law or otherwise, the insured must be protected and the insurance is therefore handled through the state, or a bureau and assigned to companies.

Beneficiary - A person who may become eligible to receive, or is receiving, benefits under an insurance policy, other than as a participant.

Broker - (1) An individual who for compensation solicits, negotiates or procures insurance or the renewal or continuance thereof on behalf of insureds or prospective insureds.

Cancelable - A contract of insurance that may be terminated by the insurance company or insured at any time.

Cancellation - Termination of contract of insurance in force by voluntary act of the insurance company or insured.

Cash Value - The amount of cash that is due the insured who surrenders a LIFE (and, extremely rarely) or HEALTH policy. Such surrender with termination of all insurance benefits is often called "cashing out."

Claim - The demand for benefits as provided by the policy.

Clause - A term used to identify a particular part of a policy or endorsement.

Commission - That portion of the premium retained by the agent or broker as compensation for sales, service, and distribution of insurance policies.

Coverage - Scope of the protection provided under a contract of insurance.

Credit Insurance - Insurance on a debtor in favor of a lender intended to pay off a loan or the balance if the insured dies.

Debit - The collectable premium accounts assigned to one industrial or combination agent.

Declaration Page - The portion of an insurance policy containing the information regarding the risk.

Decreasing Term Policy - Life protection which decreases each year.

Direct Writer - An insurance company which sells its policies through salaried employees (licensed agents) who represent it exclusively, rather than through independent local agents, who represent more than one company.

Earned Premium - That portion of a premium for which the policy protection has already been given during the portion of the policy term.

Elimination Period A loosely-used term sometimes designating the "waiting period" and sometimes the "probationary period."

Exclusions - Causes, conditions or property listed in the policy which are not covered and for which no benefits are payable.

Experience - The loss record of an insured, a class of coverage, or of an insurance company.

Exposure -Being subject to the possibility of loss.

Face - The first page of a policy.

Face Amount - In a LIFE INSURANCE policy, the death benefit stated on the first page of the policy.

Fiduciary - A person who occupies a position of special trust and confidence (for example, in handling or supervising the affairs or funds of another).

Form - An insurance policy itself or riders and endorsements attached to it.

General Agent - An insurance company representative in a given territory, entrusted with the task of supervising the company’s business within that territory.

Grace Period - A 30 day period of time after premium-due date during which a policy remains in force without penalty even though the premium due has not been paid.

Guaranteed Insurability Rider - May be attached to a life insurance policy which permits the insured to purchase additional insurance at one or more specified "option dates," without providing new evidence of insurability at that time.

Guaranteed Renewable - A contract that the insured has the right to continue in force by the timely payment of premiums for a substantial period of time.

Insurable Interest - Any interest in a subject of insurance or any legal relation to it of such a nature that a certain happening might cause monetary loss to the insured.