The person(s) named in the
policy to receive the life insurance proceeds upon the death of the
Cash (Surrender) Value
The amount that is
available in cash for loans and that may be available for withdrawals.
Accessing Cash Surrender Value may reduce the death benefit and may
increase the risk of lapse.
Convertible Term Insurance
Term insurance which can be
exchanged (converted), at the option of the policyowner and without
evidence of insurability, for a permanent insurance policy.
A return of part of the
premium on participating insurance that is based on the insurer's
investment, mortality, and expense experience. Dividends are not
The amount stated on the
face of the policy that will be paid in case of death. It does not include
additional amounts payable under accidental death or other special
provisions, or acquired through the application of policy dividends.
Acceptability to the
company of an applicant for insurance.
Insured or Insured Life
The person on whose life
the policy is issued.
Level Premium (Life Insurance)
Life insurance for which
the premium remains the same from year to year. The premium is normally
more than the actual cost of protection during the earlier years of the
policy and less than the actual cost in the later years. The building of a
reserve is a natural result of level premiums. The payments in the early
years, together with the interest that is to be earned, serves to balance
out the underpayment of the later years.
Loan (Policy Loan)
A loan made by a life
insurance company from its general funds to a policyowner on the security
of the cash value of a policy. Generally, loans may reduce the policy's
death benefit and cash value.
Insurance that will remain
in force with no need to pay additional premiums.
A life insurance policy
that is eligible for the payment of dividends by the insurer (see also
Permanent (Life Insurance)
Any form of life insurance
except term; generally insurance that builds up a cash value, such as
The person who owns a life
insurance policy. This is usually the insured person, but it may also be a
relative of the insured, a partnership or a corporation.
Payments to the insurance
company to buy a policy and to keep it in force.
Renewable Term Insurance
Term insurance which can be
renewed at the end of the term, at the option of the policyowner and
without evidence of insurability, for a limited number of successive
terms. The rates generally increase at each renewal as the age of the
Life insurance that does
not build up cash value and where the premium normally increases as the
insured gets older.
Universal Life Insurance
A flexible premium life
insurance policy under which the policyowner may change the death benefit
from time to time (with satisfactory evidence of insurability for
increases) and vary the amount or timing of premium payments. Premiums
(less expense charges) are credited to a policy account from which
mortality charges are deducted and to which interest is credited at rates,
which may change from time to time.
Whole Life Insurance
A basic type of permanent
life insurance which can provide lifetime protection at a level premium.
Premiums must generally be paid for as long as the policy is in force.