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Agent
Agent
is a person who arranges an agreement on behalf of his
insurer with the third party.
Broker
One
who advises persons on their insurance needs and negotiates
insurance on his/her behalf with insurers.
Claim
A
request for payment of insurance policy benefits following
the occurrence of a covered loss.
Credit
Life Insurance
A
type of term life insurance designed to pay the balance
due on a loan if the borrower dies before the loan is
repaid.
Endowment
Insurance
Life
insurance that provides a policy benefit payable either
when the insured dies or on a stated date if the insured
lives until then.
Exclusion
An
insurance policy provision that describes circumstances
under which the insurer will not pay policy benefits that
otherwise would be payable.
Grace
period
A
specified length of time within which a renewal premium
that is due may be paid without penalty.
Individual
insurance policy
An insurance policy that
is issued to insure the life or health of a named person.
Some policies also insure the named person's immediate
family or a second named person.
Initial
premium
The first premium paid
for a new insurance policy.
Insurable
interest
The
interest an insurance policyowner has in the risk that
is insured. The owner of a life insurance policy has an
insurable interest in the insured when the policyowner
is likely to benefit if the insured continues to live
and is likely to suffer some loss or detriment if the
insured dies.
Insured
The
person whose life or health is insured under an insurable
policy.
Lapse
The
effect on an insurance policy if a renewal premium has
not been paid by the end of the grace period.
Life
insurance policy
A
policy under which the insurance company promises to pay
a benefit upon the death of the person who is insured.
Maturity
date
The
date on which an insurer will pay the face amount of an
endowment policy to the policyowner if the insured is
still living.
Misrepresentation
A
false or misleading statement.
Policy
A
written document that contains the terms of the contractual
agreement between an insurance company and the owner of
the policy.
Policy
rider
An
amendment to an insurance policy that becomes a part of
the insurance contract and that either expands or limits
the benefits payable under the contract.
Policyowner
The
person or business that owns an insurance policy.
Premium
A
specified amount of money an insurer charges in exchange
for its promise to pay a policy benefit when a specific
loss occurs.
Primary
beneficiary
The
party designated to receive the proceeds of a life insurance
policy following the death of the insured.
Sum
Assured
The
amount of the death benefit payable under a life insurance
policy.
Term
life insurance
Life
insurance that provides a death benefit if the insured
dies during a specified period.
Underwriting
The
process of identifying and classifying the degree of risk
represented by a proposal insured.
Whole
life insurance
Life
insurance that provides lifetime insurance coverage at
a level premium rate that does not increase as the insured
ages.
