Term
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Definition
| Sharing the financial consequences associated with risk |
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Term
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Definition
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Term
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Definition
| Statisticians who specialize in estimating the probability of death based on personal characteristics |
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Term
| Face Amount or Face of Policy |
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Definition
| The amount of insurance provided by the policy at death |
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Term
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Definition
| The person whose life is insured by the life insurance policy |
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Term
| Policyholder or Policy Owner |
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Definition
| The individual or business that owns the life insurance policy |
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Term
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Definition
| The individual designated to receive the insurance policy's proceeds upon the death of the insured |
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Term
| Earnings Multiple Approach |
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Definition
| A method of determining exactly how much life insurance you need by using a multiple of your yearly earnings |
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Term
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Definition
| A method of determing how much life insurance you need based on funds your family would require to maintain their lifestyle after your death |
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Term
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Definition
| Funds needed to cover immediate expenses at the time of your death |
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Term
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Definition
| A type of insurance that pays your beneficiary a specific amount of money if you die while covered by the policy |
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Term
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Definition
| A type of insurance that has two components: life insurance and a savings plan |
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Term
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Definition
| A type of term insurance that can be renewed for an agreed-upon period or up to a specified age (usually 65 or 70) regardless of the insured's health |
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Term
| Decreasing Term Insurance |
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Definition
| Term insurance in which the annual premium remains constant but the face amount of the policy declines each year |
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Term
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Definition
| Term insurance provided, usually without a medical exam, to a specififc group of individuals, such as company empoloyees, who are associated for some purpose other than to buy insurance |
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Term
| Credit or Mortgage Group Life Insurance |
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Definition
| Group life insurance that's provided by a lender for its debtors |
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Term
| Convertible Term Life Insurance |
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Definition
| Term life insurance that can be converted into cash-value life insurance at the insured's discretion regardless of his or her medical condition and without a medical exam |
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Term
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Definition
| Cash-value insurance that provides permanent coverage and a death benefit when the insured dies. If the insured turns 100, the policy pays off, een though the insured hasn't died. |
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Term
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Definition
| The money that the policyholder is entitled to if the policy is terminated |
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Term
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Definition
| The right of a policyholder to choose to receive the policy's cash value in exchange for the policyholder giving up his or her right to a death benefit |
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Term
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Definition
| A type of cash value insurance that's much more flexible than whole life. It allows you to vary the premium payment and the level of protection |
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Term
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Definition
| Insurance that provides permanent insurance coverage as whole life does; however, the policyholder, rather than the insurance company, takes on the investment risk |
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Term
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Definition
| The late-payment period for premium during which time the policy stays in effect and no interest is charged. If payments still aren't made, the policy can be canceled after the grace period |
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Term
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Definition
| A clause that provides the right to borrow against the cash value of the policy at a guranteed interest rate |
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Term
| Policy Reinstatement Clause |
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Definition
| A clause that provides the right to restore a policy that has lapsed after the grace period ahs expired. Generally, reinstatement is provided for within a specified period (usually 3 to 5 years after the policy has expired) |
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Term
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Definition
| A clause that porivdes the right of the policyholder to change the form of the policy - for example, form a continuous premiun whole life policy to a limited-premium whole life policy |
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Term
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Definition
| A special provision that may be added to your policy, which either provides extra benefits to the beneficiary or limits the company's liability under certain conditions |
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Term
| Settlement or Payout Options |
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Definition
| The alternative ways that a beneficiary can choose to receive the policy benefits upon the death of the insured |
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Term
| Traditional Net Cost (TNC) Method |
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Definition
| A method of comparing insurance costs that sums the premiums over a stated period (usually 10 or 20 years) and substracts from this the sum of all dividends over that same period |
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Term
| Interest-Adjusted Net Cost (IANC) Method or Surrender Cost Index |
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Definition
| A method of comparing insurance costs that incorporates the time value of money into its calculations |
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Term
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Definition
| A term used to describe most health insurance, which includes a combination of hospital, surgical, and physician expense insurance |
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Term
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Definition
| Insurance that covers the costs associated with a hospital stay, including room charges, nursing costs, operation room fees, and drugs supplied by the hospital |
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Term
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Definition
| Insurance that covers the cost of surgery |
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Term
| Physicial Expense Insurance |
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Definition
| Insurance that covers physicians' fees outside of surgery |
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Term
| Major Medical Expense Insurance |
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Definition
| Insurance that covers medical costs beyond those covered by basic health insurance |
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Term
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Definition
| A medical insurance feature that limits the total dollar amount that the policyholder is responsible for paying |
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Term
| Fee-for-Service or Traditional Indemnity Plan |
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Definition
| An insurance plan that provides reimbursement for all or part of your medical expenditures. In general, it gives you a good deal of freedom to choose your doctor and hospital |
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Term
| Managed Health Care or Prepaid Care Plan |
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Definition
| An insurance plan that entitles you to the health care provided by a specified group of participating doctors, hospitals, and clinics. These plans are generally offered by health maintenance organizations or variations of them. |
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Term
| Coinsurance or Percentage Participation Provision |
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Definition
| An insurance provision that defines the percentage of each claim that the insurance company will pay |
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Term
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Definition
| The amount of expenses that the insured must pay before the insurance company will pay any insurance benefits |
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Term
| Health Maintenance Organization (HMO) |
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Definition
| A prepaid insurance plan that entitles members to the services of participating doctors, hospitals, and clinics |
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Term
| Individual Practice Association Plan (IPA) |
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Definition
| An HMO made up of independent doctors, in which the patients visit the doctors and receive their medical treatment in the doctors' regular offices |
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Term
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Definition
| An insurance plan in whcih doctors are generally employed directly by an HMO and members of the HMO must receive their medical treatment from these doctors at a central facility |
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Term
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Definition
| An insurance plan that allows its members to seek medical treatment from both HMO-affiliated doctors and non-HMO-affiliated doctors |
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Term
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Definition
| Health insurance that's sold, usually without a medical exam, to a specific group of individuals who are associated for some purpose other than to buy insurance |
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Term
| Individual Insurance Policy |
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Definition
| An insurance policy that is tailor-made for you, reflecting your age, health (as determined by an examination), and chosen deductible size |
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Term
| Workers' Compensation Laws |
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Definition
| State laws that provide payment for work-related accidents and illness |
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Term
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Definition
| A government insurance program enacted in 1968 to provide medical benefits to the disabled and those are over 65. It is divided into two parts: Part A, which provides hospital insurance benefits, and Part B, which allows for voluntary supplemental insurance |
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Term
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Definition
| Insurance sold by private insurance companies aimed at bridging gaps in Medicare coverage |
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Term
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Definition
| A government medical insurance plan for the needy |
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Term
| Flexible Spending Account |
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Definition
| An employer - sponsered medical plan that allows each employee to ahve pretax earnings deposited into a specially designated account for the purposes of paying health care bills. The employee can withdraw funds from thsi account to offset unreimbursed medical or dental expenses or qualified child care expenses |
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Term
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Definition
| A health insurance provision that allows you to renew your policy regardless of your health until you reach some preset age, generally 65 |
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Term
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Definition
| Health insurance that provides payments to the insured in the even that income is interrupted by illness, sickness, or accident |
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Term
| Short-Term Disability (STD) |
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Definition
| A disability policy that provides benefits over a given period, generally from 6 months to 2 years |
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Term
| Long-Term Disability (LTD) |
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Definition
| A disability policy that provides benefits until the individual reaches an age specified in the contract, generally 65 or 70, or for the insured's lifetime |
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Term
| Waiting or Elimination Period |
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Definition
| The period after the disability during which no benefits occur |
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Term
| Waiver of Premium Provision |
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Definition
| A disability insurance provision that allows your insurance to stay in force should you become unable to work ebcause of disability or illness |
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Term
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Definition
| A disability insurance provision that allows payments for vocational rehabilitaion, allowing the policyholder to be retrained for employment |
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Term
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Definition
| Insurance that's aimed at covering the costs associated with long-term nursing home care, commonly associated with victims of stroke, chronic illness, or Alzheimer's disease, or those who can simply no longer manage to live on their own |
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