Understanding Life Insurance can be so complicated… but don’t worry I am here. Let’s start with some terms.
An insurance company representative licensed by the state who solicits and negotiates contracts of insurance, and provides service to the policyholder for the insurer. An agent can be independent agent who represents at least two insurance companies or a direct writer who represents and sells policies for one company only. I am an independent agent that represents many companies so I can help you find the RIGHT plan with the RIGHT company.
A contract that provides a periodic income at regular intervals, usually for life. There are several options for annuities such as fixed or variable, not sure if either are a good fit for you, let’s chat.
A statement of information made by a person applying for life insurance. It helps the life insurance company assess the acceptability of risk. Statement made in the application are used to decide on an applicant’s underwriting classification and premium rates.
The person named in the policy to receive the insurance proceeds at the death of the insured. Anyone can be named as a beneficiary.
Cash Surrender Value
The amount available in cash upon voluntary termination of a policy by its owner before it becomes payable by death or maturity. The amount is the cash value stated in the policy minus a surrender charge and any outstanding loans and any interest thereon.
A return of part of the premium on participating insurance to reflect the difference between the premium charged and the combination of actual mortality, expense and investment experience. Dividends are not considered to be taxable distributions because they are interpreted as a refund of a portion of the premium paid.
Evidence of Insurability
A statement or proof of your health, finances or job, which helps the insurer decide if you are an acceptable risk for life insurance.
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.
The printed legal document stating the terms of insurance contract that is issued to the policyowner by the company.
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.
The payment, or one of the periodic payments, a policyowner agrees to make for an insurance policy. Depending on the terms of the policy, the premium may be paid in one payment or a series of regular payments, e.g., annually, semi-annually, quarterly or monthly. The premium charged reflects the expectation of loss, expenses and profit contingencies.
The basis for an additional charge to the standard premium because the person insured is classified as a greater than normal risk usually resulting from impaired health or a hazardous occupation.
An endorsement to an insurance policy that modifies clauses and provisions of the policy, including or excluding coverage.
The classification of a person applying for a life insurance policy who fits the physical, occupational and other standards on which the normal premium rates are based.
The classification of a person applying for a life insurance policy who does not meet the requirements set for the standard risk. An additional premium is charged on substandard risks to provide for the probability that such a person will have a shorter life span than a standard risk.
The process by which a life insurance company determines whether it can accept an application for life insurance, and if so, on what basis so that the proper premium is charged.
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I look forward to finding you the RIGHT plan!
*Info in this post & additional terms can be found here