Use the Glossary

Accumulation Period

1) The time between the first premium payment and the first benefit payout under a deferred annuity; 

2) A specified period of time, such as 90 days, during which the insured person must incur eligible medical expenses at least equal to the deductible amount in order to establish a benefit period under a major medical expense or comprehensive medical expense policy.

Accumulation Units

The mechanism used to account for your "deposits" in a variable annuity contract during the premium paying period. The number of units purchased depends upon the current valuation of a unit in dollars.

Acquisition Costs

The insurer's cost of putting new business in force, including the agent's commission, the cost of clerical work, fees for medical examinations and inspection reports, sales promotion expense, etc.

Actual Cash Value (ACV)

1) The cost of replacing or restoring property at prices prevailing at the time and place of the loss, less depreciation, however caused; 

2) replacement cost minus.

Actuary

A person professionally trained in the technical aspects of pensions, insurance and related fields. The actuary estimates how much money must be contributed to an insurance or pension fund in order to provide future.

Additional Insured

an assured party specifically named under an insurance policy.

Adjustable Life Insurance

A type of insurance that allows the policyholder to change the plan of insurance, raise or lower the face amount of the policy, increase or decrease the premium and lengthen or shorten the protection period.

Administrative Services Only (AS0) Plan

An arrangement under which an insurance carrier or an independent organization will, for a fee, handle the administration of claims, benefits and other administrative functions for a self-insured group.

Age Limits

Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.

Agent

An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer.

Aggregate Deductible

Deductible in some property and health insurance contracts in which all covered losses during a year are added together and the insurer pays only when the aggregate deductible amount is exceeded.

AIDS

Acquired immune deficiency syndrome. A fatal, incurable disease caused by a virus that can damage the brain and destroy the body's ability to fight off illness.

Allocated Benefits

Benefits for which the maximum amount payable for specific services is itemized in the contract.

All-risks Policy

Coverage by an insurance contract that promises to cover all losses except those losses specifically excluded in the policy. See also: Risks of direct loss to property.

Ambulatory Care

Medical services that are provided on an outpatient (non-hospitalized) basis. Services may include diagnosis, treatment, and rehabilitation.

Amendment

A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and the policy holder or his authorized representative.

Amortization

Paying an interest-bearing liability by gradual reduction through a series of installments, as opposed to one lump-sum payment.

Annual Statement

The annual report, as of December 31, of an insurer to a state insurance department, showing assets and liabilities, receipts and disbursements, and other financial data.

Annuitant

The person during whose life an annuity is payable, usually the person to receive the annuity.

Annuity

A contract that provides an income for a specified period of time, such as a number of years or for life.

Annuity Certain

A contract that provides an income for a specified number of years, regardless of life or death.

Annuity Consideration

The payment, or one of the regular periodic payments, an annuitant makes for an annuity.

Application

A signed statement of facts made by a person applying for life insurance and then used by the insurance company to decide whether or not to issue a policy. The application becomes part of the insurance contract when the policy is issued.

Automatic Premium Loan

Cash borrowed from a life insurance policy's cash value to pay an overdue premium after the grace period for paying the premium has expired.

Automatic Reinsurance

An agreement that the insurer must cede and the reinsurer must accept all risks within certain explicitly defined limits. The reinsurer undertakes in advance to grant reinsurance to the extent specified in the agreement in every case where the ceding company accepts the application and retains its own limit.

Bad faith

The allegation that insurers have failed to act in good faith, i.e., that they have acted in a manner inconsistent with what a reasonable policyholder would have expected.

Beneficiary

The person designated or provided for by the policy terms to receive any benefits provided by the policy or plan upon the death of the insured.

Benefit Period

A period of time typically one to three years during which major medical benefits are paid after the deductible is satisfied. When the benefit period ends, the insured must then satisfy a new deductible in order to establish a new benefit period.

Benefits

The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage.

Binding Receipt

A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.

Blanket Contract

A contract of health insurance affording benefits, such as accidental death and dismemberment, for all of a class of persons not individually identified. It is used for such groups as athletic teams, campers, travel policy for employees, etc.

Blanket Medical Expense

A provision which entitles the insured person to collect up to a maximum established in the policy for all hospital and medical expenses incurred, without any limitations on individual types of medical expenses.

Blue Shield

An independent, non-profit membership corporation providing protection on a service basis against the cost of surgical and medical care in a limited geographical area.

Cafeteria Plan

Generic term for an employee benefit plan that allows employees to select among the various group life, medical expense, disability, dental, and other plans that best meet their specific needs. Also called flexible benefit plans.

Calendar-year Deductible

Amount payable by an insured during a calendar year before a group or individual health insurance policy begins to pay for medical expenses.

Cancelable

A contract of health insurance that may be canceled during the policy term by the insurer or insured.

Career Average formula

A pension plan formula that bases retirement benefits on earnings during all years of service to the employer.

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.

Certified Financial Planner (CFP)

Professional who has attained a high degree of technical competency in financial planning and has passed a series of professional examinations. Follow these links for further information in the U.S., Canada, and other countries.

Change of Occupation Clause

Provision in a health insurance policy stipulating that if the insured changes to a more hazardous occupation, the benefits are reduced based on the amount of benefits the premium would have purchased for the more hazardous occupation.

Chartered Financial Consultant (ChFC)

An individual who has attained a high degree of technical competency in the fields of financial planning, investments, and life and health insurance and has passed ten professional examinations administered by The American College.

Claim

A request for payment of a loss which may come under the terms of an insurance contract.

Coinsurance

1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required; 2) a policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 percent by the insurer and 20 percent by the insured.

Commission

The part of an insurance premium paid by the insurer to an agent or broker for his services in procuring and servicing the insurance.

Commutation function

A notation as defined by actuaries to combine various elements of an actuarial computation in a manner that makes a formula look simpler.

Commutation table

A table that combine elements (e.g., interest and mortality) into a single value to facilitate further computations

Company Adjuster

Claims adjuster who is a salaried employee representing only one company.

Comparative Negligence

Under this concept a plaintiff (the person bringing suit) may recover damages even though guilty of some negligence. His or her recovery, however, is reduced by the amount or percent of that negligence.

Completed Operations

Liability arising out of faulty work performed away from the premises after the work or operations are completed. Applicable to contractors, plumbers, electricians, repair shops, and similar firms.

Comprehensive Automobile Insurance

Protection against loss resulting from damage to the insured auto, other than loss by collision or upset.

Comprehensive Major Medical Insurance

A policy designed to give the protection offered by both a basic and a major medical health insurance policy. It is characterized by a low deductible amount, a coinsurance feature, and high maximum benefits.

Comprehensive Medical Expense Insurance

A form of health insurance which provides, in one policy, protection for both basic hospital expense and major medical expense coverages. The major medical part of a comprehensive policy is characterized by a deductible amount, coinsurance, and high maximum benefits.

Comprehensive Personal Liability Insurance

Protection against loss arising out of legal liability to pay money for damage or injury to others for which the insured is responsible. It does not include automobile or business operation liabilities.

Conditional Receipt

A receipt given for premium payments accompanying an application for insurance. If the application is approved as applied for, the coverage is effective as of the date of the prepayment or the date on which the last of the underwriting requirements, such as a medical examination, has been fulfilled.

Conditionally Renewable

Continuance provision of a health insurance policy under which the company cannot cancel the policy during its term but can refuse to renew under certain conditions stated in the contract.

Conditions

Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform.

Confining Sickness

An illness that confines an insured person to his home or to a hospital.

Conservation

The attempt by the insurer to prevent the lapse of a policy.

Contingent Annuity Option

An option under which an employee may elect to receive, under certain conditions, a reduced amount of annuity with the same income, or a specified fraction, to be paid after his death to another person designated as his contingent annuitant, for that person's lifetime. The contingent annuitant is usually the husband or the wife. (See Joint and Survivor Annuity)

Contingent Beneficiary

The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the insured is living.

Contingent Employers Liability Insurance

Provides payment on behalf of the employer for bodily injury to an employee if that person is ineligible to receive workers compensation benefits, e.g., an "occasional" employee.

Contingent Liability

Liability arising out of work done by independent contractors for a firm. A firm may be liable for the work done by an independent contractor if the activity is illegal, the situation does not permit delegation of authority, or the work is inherently dangerous.

Contingent Owner

The person to succeed as owner of a life insurance policy if the original owner dies.

Contract

A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.

Contract law

The portion of civil law that interprets written agreements between parties and resolves disputes between them.

Contract Holder

The group, entity or person to whom a group annuity contract is issued.

Convertible Term Insurance

Term insurance which can be exchanged, at the option of the policyholder and without evidence of insurability, for another plan of insurance. Credit life insurance. Term life insurance issued through a lender or lending agency to cover payment of a loan, installment purchase, or other obligation, in case of death.

Coordination of Benefits (COB)

The mechanism used in group health insurance to designate the order in which the multiple carriers are to pay benefits and to prevent duplicate payments.

Corridor Deductible

Major medical plan deductible that excludes benefits provided by a basic plan if both a basic and a supplemental group major medical expense policy are in force.

Cost-of-Living Rider

Benefit that can be added to a life insurance policy under which the policyowner can purchase one-year term insurance equal to the percentage change in the consumer price index with no evidence of insurability.

Coverage

The scope of protection provided under a contract of insurance; any of several risks covered by a policy.

Covered Expenses

Hospital, medical, and miscellaneous health care expenses incurred by the insured that entitle him/her to a payment of benefits under a health insurance policy. Found most often in connection with major medical plans, the term defines, by either description, reasonableness, or necessity to specify the type and amount of expense which will be considered in the calculation of benefits.

Covered Participant

A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits under the plan.

Death Benefit

A payment made to a designated beneficiary upon the death of the employee annuitant.

Declarations

Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and identification of the property or life to be insured.

Deductible

An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss.

Deferred Annuity

An annuity providing for the income payments to begin at some specified future date.

Deferred Compensation

Arrangements by which compensation to employees for past or current services is postponed until some future date.

Deferred Group Annuity

A type of group annuity providing for the purchase each year of a paid-up deferred annuity for each member of the group, the total amount received by the member at retirement being the sum of these deferred annuities.

Defined Benefit Plan

A pension plan stating either (1) the benefits to be received by employees after retirement or (2) the method of determining such benefits. The employer's contributions under such a plan are actuarially determined.

Defined Contribution Plan

A plan under which the contribution rate is fixed and benefits to be received by employees after retirement depend to some extent upon the contributions and their earnings.

Dental Insurance

Individual or group plan that helps pay costs of normal dental care as well as damage to teeth from an accident.

Dependency Period

Period of time following the readjustment period during which the surviving spouse's children are under eighteen and therefore dependent of the parent.

Dependent Benefits

Social Security benefits available to the spouse or children of a Social Security beneficiary.

Deposit Administration Group Annuity

A type of group annuity providing for the accumulation of contributions in an undivided fund out of which annuities are purchased as the individual members of the group retire.

Deposit Premium

The premium deposit paid by a prospective policyholder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when billed.

Deposit Term Insurance

A form of term insurance, not really involving a "deposit," in which the first-year premium is larger than subsequent premiums. Typically, a partial endowment is paid at the end of the term period. In many cases the partial endowment can be applied toward the purchase of a new term policy, or, perhaps, a whole life policy.

Disability

A physical condition resulting from an accident or sickness which renders an insured incapable of performing the duties of his regular employment.  The definition of disability can vary see the specific policy for a complete definition. (See Partial Disability; Total Disability.)

Disability Benefit

A benefit added to some insurance policies if the policy holder becomes totally and permanently disabled during the term of the policy. The definition of disability can vary see the specific policy for a complete definition

Disability Income Insurance

A form of health insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury, or disease.

Disability Insured

Status of an individual who is insured for disability benefits under the Old-Age, Survivors, and Disability Insurance (OASDI) program. The covered person must be fully insured and have at least twenty quarters of coverage out of the last forty, ending with the quarter in which the disability occurs. Fewer quarters are required for persons under age thirty.

Disappearing Deductible

Deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases, so that small claims are not paid but large losses are paid in full.

Dismemberment

Loss of body members (limbs), or use thereof, or loss of sight due to injury.

Dismemberment Insurance

A form of health insurance that provides payment in case of loss by bodily injury of one or more body members (such as hands or feet) or the sight of one or both eyes.

Disposable Personal Income

The personal income less personal tax and non-tax payments. It is the income available to people for spending and saving.

Dividend

A return of part of the premium on participating insurance to reflect he difference between the premium charged and the combination of actual mortality, expense and investment experience. Such premiums are calculated to provide some margin over the anticipated cost of the insurance protection.

(1) An amount returned to a policyholder by an insurance company out of its earnings. (2) In capital stock companies, a share of the profits distributed to stockholders.

Portion of the premium which is returned to the insured because of favorable experience by the company.

 

 

Dividend Addition

An amount of paid-up insurance purchased with a policy dividend and added to the face amount of the policy.

Doctrine of reasonable expectations

A legal doctrine that holds policies will be interpreted according to how a reasonable person who is not trained in the law would expect

Double Indemnity

A policy provision usually associated with death, which doubles payment of a designated benefit when certain kinds of accidents occur

Dread Disease Insurance

Insurance providing an unallocated benefit, subject to a maximum amount, for expenses incurred in connection with the treatment of specified diseases, such as cancer, poliomyelitis, encephalitis and spinal meningitis.

Duplication of Benefits

Overlapping or identical coverage of the same, insured under two or more health plans, usually the result of contracts of different insurance companies, service organizations

Early Retirement

Retirement of a participant prior to the normal retirement date, usually with a reduced amount of annuity. Early retirement is generally allowed at any time during a period of 5 to 10 years proceeding the normal retirement date.

Effective Date

The date on which the insurance under a policy begins.

Eligibility Date

A specified length of time, frequently 31 days, following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.

Eligible Employees

Those members of a group who have met the eligibility requirements under a group life or health insurance plan.

Eligibility Period

A specified length of time, frequently 31 days, following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.

Eligibility Requirements

This term refers to (1) the conditions which an employee must satisfy to participate in a retirement plan, one such condition begin the completion from 1 to 3 years of service with the employer, another the attainment of a specified age, such as 25, or (2) conditions which an employee must satisfy to obtain a retirement benefit, such as the completion of 15 years of service and the attainment of age 65.

Elimination Period

A period of time between the period of disability and the start of disability income insurance benefits, during which no benefits are payable. (See Waiting Period.)

Elimination Period

A specified number of days at the beginning of each period of disability during which no disability income benefits are paid. The elimination period may be as short as a few days or as long as one year or more.

Embedded Value

The sum of these two elements: (1) shareholders' equity considering the assets at market value and (2) in-force life insurance business valued at the present value of future after-tax statutory profits.

Endorsements

An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of that contract.

Endorsement

An amendment of the policy usually by means of a rubber stamp or rider.

Endowment

Life insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the insured dies prior to that date.

Estate

The assets and liabilities of a person left at death.

Evidence of Insurability

Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance.

Excess and Surplus Insurance

(1) Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy. (2) Insurance to cover an unusual or one-time risk, e.g., damage to a musician's hands or the multiple perils of a convention, for which coverage is unavailable in the normal market. (See also "Umbrella liability" and "surplus lines.")

Exclusions

Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments.

Experience

A term used to describe the relationship, usually expressed as a percent or ratio, of premium to claims for a plan, coverage, or benefits for a stated time period.

Experience Rating

The process of determining the premium rate for a group risk, wholly or partially on the basis of that group's experience.

Extended Reporting Period Endorsement

Added to a claims-made policy of liability insurance to provide additional period of time during which valid claims will be paid

Extended Term Insurance

A form of insurance available as a nonforfeiture option. It provides the original amount of insurance for a limited period of time.

Extended Unemployment Insurance Benefits

Additional cash benefits paid by federal-state unemployment insurance programs to workers who are involuntarily unemployed and who have exhausted their regular weekly cash benefits during periods oh high unemployment.

Extortion

Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured, relative, or invitee who is being held captive.

Extra Expense Insurance

Type of business income insurance that covers the extra expenses incurred to continue operations after a loss has occurred.

Face Amount

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.

Family Expense Policy

A policy which insures both the policyholder and his/her immediate dependents (usually spouse and children).

Family Income Policy

Special life insurance policy combining decreasing term and whole life insurance that pays a monthly income of $10 for each $1000 of life insurance if the insured dies within the specified period. The monthly income is paid to the end of the period, at which time the face amount of insurance is paid.

Family Policy

A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and small amounts of term insurance on the other spouse and children, including those born after the policy is issued.

Family Purpose Doctrine

Concept that imputes negligence committed by immediate family members while operating a family car to the owner of the car.

Final Release

A legal contract, between two or more parties, acknowledging the termination of a claimant's right to sue against the released party. Typically issued in exchange for a settlement payment.

Fixed Amount Option

Life insurance settlement option in which the policy proceeds are paid out in fixed amounts.

Fixed Annuity

Annuity whose periodic payment is a quaranteed fixed amount.

Fixed Period Option

Life insurance settlement option in which the policy proceeds are paid out in fixed amounts

Flexible Premium Policy or Annuity

A life accident policy or annuity under which the policyholder or contract holder may vary the amounts or timing of premium payments.

Flexible Premium Variable Life Insurance

A life insurance policy that combines the premium flexibility feature of universal life insurance with the equity-based benefit feature of variable life insurance.

Future Increase Option

A provision found in some policies that allows the insured to purchase additional disability income insurance at specified future dates regardless of the insured's physical condition.

Future Service Benefits

Benefits accruing for service after the effective date of coverage under the plan.

Grace Period

A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues.

Graded Commission Scale

A commission scale providing for payment of a high first-year commission and lower renewal commissions.

Gross Premium

The premium paid by the policyholder.

Group Annuity

A pension plan providing annuities at retirement to a group of people under a master contract. It is usually issued to an employer for the benefit of employees. The individual members of the group hold certificates as evidence of their annuities.

Group Annuity Contract

A contract issued by a life insurance company that may be used as the funding instrument for benefits to be made in accordance with a pension plan. A single master contract provides that the group of persons participating in the plan will receive annuities during retirement. Individual certificates stating coverage may be issued to members of the group.

Group Contract

A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Creditor Life Insurance

Life insurance provided to debtors by a lending institution to provide for the cancellation of any outstanding debt should the borrower die. Normally term insurance limited to the amount of the loan.

Group Insurance

Insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are affiliated.

Group Life Insurance

Life insurance usually without medical examination, on a group of people under a master policy. It is typically issued to an employer for the benefit of employees, or to members of an association, for example a professional membership group. The individual members of the group hold certificates as evidence of their insurance.

Group Major Medical Plan

See Supplementary Major medical Insurance.

Group Ordinary Life Insurance

Group insurance plan providing life insurance for employees. Traditional whole life policy is split into decreasing insurance protection and increasing cash values.

Group Paid-Up Life Insurance

Accumulating units of single premium whole life insurance and decreasing term insurance, which together equal the face amount of the policy. Provided through a group life insurance plan.

Group Permanent Plan

Type of pension plan in which cash value life insurance is issued on a group basis and cash values in each policy are used to pay retirement benefits when a worker retires.

Group Survivor Income Benefit Insurance (SIBI)

See Survivor Income Benefit Insurance.

Group Term Life Insurance

Most common form of group life insurance. Yearly renewable term insurance on employees during their working careers.

Group Universal Life Products (GULP)

Universal life insurance plans sold to members of a group, such as individual employees of an employer. There are some differences between GULP plans and individual universal life plans; for instance, GULP expense charges generally are lower than those assessed against individual policies.

Guaranteed Insurability Option

(see "Future Increase Option")

Guaranteed Investment Contract

An investment contract with an insurer in which the insurer guarantees both principal and interest on a pension contribution.

Guaranteed Purchase Option

Benefit that can be added to a life insurance policy permitting the insured to purchase additional amounts of life insurance at specified times in the future without requiring evidence of insurability.

Guaranteed Renewable

A contract that the insured has the right to continue in force by the timely payment of premiums (1) until at least age 50 or (2) in the case of a policy issued after age 44 for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the contract while the contract is in force, except that the insurer may make changes in premium rate by classes.

Guaranteed Renewable Contract

A contract that the insured person or entity has the right to continue in force by the timely payment of premiums for a substantial period of time, during which period the insurer has no right to make unilaterally any change in any provision of the contract, while the contract is in force, other than a change in the premium rate for classes of policyholders.

Guaranteed Renewable Contract

A health policy which the company guarantees to renew for life or until the insured reaches a specified age, usually 65.

Guaranty Fund

A fund, derived from assessments against solvent insurance companies, to absorb losses of claimants against insolvent insurance companies.

Health Insurance

Protection which provide payment of benefits for covered sickness or injury. Included under this heading are various types of insurance such as accident insurance, disability income insurance, medical expense insurance, and accidental death and dismemberment insurance.

Health Insurance

Insurance providing for the payment of benefits as a result of sickness or injury. Includes various types of insurance such as accident insurance, disability income insurance, medical expense insurance, accidental death insurance, and dismemberment insurance.

Hospital Expense Insurance

Health insurance protection against the cost of hospital care resulting from the illness or injury of the insured person.

Hospital Expense Insurance

A form of health insurance that provides specific benefits for daily hospital room and board and hospital services during hospital confinement. Generally the policy also provides benefits for surgical operations and for in- hospital doctor's visits, in which case the policy is referred to as a hospital and Surgical Expense Policy.

Hospital Indemnity

A form of health insurance which provides a stipulated daily, weekly, or monthly indemnity during hospital confinement. The indemnity is payable on an unallocated basis without regard to the actual expense of hospital confinement.

Hospital Medical Insurance

A term used to indicate protection which provides benefits for the cost of any or all of the numerous health care services normally covered under various health care plans.

Hospital Miscellaneous Services

Services other than room and board and general nursing services provided by a hospital during hospital confinement. Included are such items as x- ray examinations, laboratory tests, medicines, surgical dressings, anesthetics (including the administration thereof), and use of operating room.

Immediate Annuity

An annuity providing for payment to begin immediately.

Incontestability

Life policies provide that, except for non-payment of premiums and certain other circumstances, the policy shall be incontestable after the policy has been in force for two years during the lifetime of the insured.

Incontestable Clause

An optional clause which may be used in non-cancelable or guaranteed renewable health insurance contracts providing that the insurer may not contest the validity of the contract after it has been in force for two (sometimes three) years.

Incurred Claims

Incurred claims equal the claims paid during the policy year plus the claim reserves as of the end of the policy year, minus the corresponding reserves as of the beginning of the policy year. The difference between the year end and beginning of the year claim reserves is called the increase in reserves and may be added directly to the paid claims to produce the incurred claims.

Individual Retirement Account (IRA)

An account to which an individual can make save for retirement on a tax-favored basis. Contributions to a standard IRA are tax deductible for many workers; contributions to a Roth IRA are made with after-tax dollars but can be withdrawn tax-free at retirement.

Insurability

Acceptability to the company of an applicant for insurance.

Insurable Risk

The conditions that make a risk insurable are (a) the peril insured against must produce a definite loss not under the control of the insured, (b) there must be a large number of homogeneous exposures subject to the same perils, (c) the loss must be calculable and the cost of insuring it must be economically feasible, (d) the peril must be unlikely to affect all insureds simultaneously, and (e) the loss produced by a risk must be definite and have a potential to be financially serious.

Insurance

A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions.

Insurance

Protection by written contract against the financial hazards (in whole or in part) of the happenings of specified fortuitous events.

Insurance Company

An organization chartered to operate as an insurer.

Insured

A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy terms.

Insured or Insured Life

The person on whose life the policy is issued.

Insurer

The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.

Insuring Agreement

That part of an insurance contract that states the promises of the insurer.

Interest

Money paid for the use of money.

Interest-Adjusted Method

Method of determining cost to an insured of a life insurance policy that considers the time cost of money by applying an interest factor to each element of cost. See Also Net payment cost index; surrender cost index.

Interest Option

Life insurance settlement option in which the principal is retained by the insurer and interest is paid periodically.

Intestate

Without a will.

Investment Income

The income generated by a company's portfolio of investments (such as in bonds, stocks, or other financial ventures).

Joint-and-Several Liability

A legal principle that permits the injured party in a tort action to recover the entire amount of compensation due for injuries from any tort feasor who is able to pay, regardless of the degree of that party's negligence.

Joint-and-Survivor Annuity

A contract that provides income periodically, payable during the longer lifetime of two persons. The amount payable may decrease at the death of one or the other. (See Contingent Annuity Option)

Jumping Juvenile Insurance Policy

Life insurance purchased by parents for children under a specified age. Provides permanent life insurance that increases in face value five times at age twenty-one with no increase in premium.

Lapse

The termination or discontinuance of an insurance policy due to non-payment of a premium.

Lapsed Policy

A policy terminated for non-payment of premiums. The term is sometimes limited to a termination occurring before the policy has a cash or other surrender value.

Level Premium

A premium which remains unchanged throughout the life of a policy.

Level Premium Life Insurance

Life insurance for which the premium remains the same from year to year. The premium is 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 overpayments in the early years, together with the interest that is to a earned, serve to balance out the underpayments of the later years.

Liability Insurance

Insurance covering the policyholder's legal liability resulting from injuries to other persons or damage to their property.

Life Annuity

A series of payments under which payments, once begun, continue throughout the remaining lifetime of the annuitant but not beyond.

Life Annuity

A contract that provides an income for life.

Life Annuity With 10 Years Certain

An annuity which pays an income to the annuitant for as long as he or she lives, but if death occurs within 10 years after the annuity payments begin, payments are continued to a named beneficiary for the remainder of the 10 years.

Life Expectancy

The average number of years of life remaining for a group of persons of a given age according to a particular mortality table.

Life Income Option

Life insurance settlement option in which the policy proceeds are paid during the lifetime of the beneficiary. A certain number of guaranteed payments may also be payable.

Life Insurance

Insurance providing for payment of a specified amount on the insured's death, either to his or her estate or to a designated beneficiary; or in the case of an endowment policy, to the policy holder at a specified date.

Lifetime Disability Benefit

A benefit to help replace income lost by an insured person as long as he/she is totally disabled, even for a lifetime.

Lifetime Disability Benefit

Disability income payable for the life of the insured as long as he is totally disabled.

Limited Payment Life Insurance

Whole life insurance on which premiums are payable for a specified number of years or until death if death occurs before the end of the specified period.

Limited Policy

One that covers only specified accidents or sicknesses.

Living Benefits Rider

A rider that allows insureds who are terminally ill or who suffer from certain catastrophic diseases to collect part of their life insurance benefits before they die, primarily to pay for the care they require.

Long-Term Care

The continuum of broad-ranged maintenance and health services to the chronically ill, disabled, or retarded. Services may be provided on an inpatient (rehabilitation facility, nursing home, mental hospital), outpatient, or at-home basis.

Long-Term Disability Income Insurance

Insurance issued to an employer (group) or individual to provide a reasonable replacement of a portion of an employee's earned income lost through serious and prolonged illness or injury during the normal work career. (See also Integration.)

Loss

The happening of the event for which insurance pays.

Loss Adjustment Expense

Expenses incurred in the process of evaluating, defending and paying claims.

Lump-Sum Distribution

Payment within one taxable year of the entire balance payable to an employee from a trust which forms part of a qualified pension or employee annuity plan on account of that person's death, separation from service or attainment of age 59.

Major Medical Expense Insurance

A form of health insurance that provides benefits for most types of medical expense up to a high maximum benefit, such as $250,000 or higher after a substantial deductible, such as $500 or more. Such contracts may contain internal limits and are normally subject to coinsurance.

Major Medical Insurance

Health insurance to finance the expense of major illness and injury. Characterized by large benefit maximums ranging up to $250,000 or no limit, the insurance, above an initial deductible, reimburses the major part of all charges for hospital, doctor, private nurses, medical appliances, prescribed out-of-hospital treatment, drugs, and medicines. The insured person as coinsurer pays the remainder.

Malingering

The practice of feigning illness or inability to work in order to collect insurance benefits.

Malpractice

Improper care or treatment by a physician, hospital, or other provider of health care.

Malpractice Insurance

Coverage for a professional practitioner, such as a doctor or a lawyer, against liability claims resulting from alleged malpractice in the performance of professional services.

Managed Care

Health care systems that integrate the financing and delivery of appropriate health care services to covered individuals by arrangements with selected providers to furnish a comprehensive set of health care services, explicit standards for selection of health care providers, formal programs for ongoing quality assurance and utilization review, and significant financial incentives for members to use providers and procedures associated with the plan.

Marital deduction

A reduction of an estate for estate tax purposes, which is available if the decedent is survived by his or her spouse, can be as large as the administrator or executor elects so long as it does not exceed the value of qualifying property passing to the surviving spouse.

Maximum family benefit

The largest amount in Social Security benefits that will be paid to any family unit.

Medical Examination

The examination given by a qualified physician to determine to the insurability of an applicant. A medical examination may also be used to determine whether an insured claiming disability is actually disabled.

Medical Expense Insurance

A form of health insurance that provides benefits for expenses incurred for medical care. This form of health insurance provides benefits for expenses of physicians, hospital, nursing, and related health services, and supplies. These benefits may be related to actual expense, specified sums, or services rendered. Such insurance sometimes includes benefits for prevention and diagnosis as well as treatment.

Minimum Benefits

A provision that a minimum amount of annuity will be paid if the regular benefit formula produces less. This minimum is usually payable only if certain service requirements are met at retirement.

Minimum Group

The least number of employees permitted under a state law to effect a group for insurance purposes; the purpose is to maintain some sort of proper division between individual policy insurance and the group forms.

Miscellaneous Expenses

Expenses incurred in connection with hospital insurance, hospital charges other than room and board, such as X-rays, drugs, laboratory fees, and other ancillary charges. (Sometimes referred to as ancillary charges.)

Miscellaneous Hospital Expense Benefit

A provision in a hospital expense policy providing for the payment of a benefit for expenses for necessary hospital services and supplies during a period of hospital confinement. Expenses commonly covered under this benefit include those for x-ray examinations, laboratory tests, medicines, surgical dressings, anesthetics (including administration thereof), and use of operating room.

Mode of Premium Payment

The frequency with which premiums are paid monthly, quarterly, semiannually, or annually.

Morbidity

The incidence and severity of sicknesses and accidents in a well-defined class or classes or persons.

Morbidity Tables

Actuarial statistics showing the frequency and duration of disability.

Mortality Table

A table showing how many members of a group, starting at a certain age, will be alive at each succeeding age. It is used to calculate the probability of dying in, or surviving through, any period, and for the valuation of an annuity. To be appropriate for a specific group, it should be based on the experience of individuals having common characteristics, such as sex or occupation.

Net Premium

The portion of the premium rate which is designed to cover benefits of the policy, but not expenses, contingencies, or profit. The term is also used to describe the portion of the premium

Nonconfining Sickness

A sickness that disables the insured person but does not confine him to his home or a hospital.

Noncontributory

A term applied to employee benefit plans under which the employer bears the full cost of the benefits for the employees. One hundred percent of the eligible employees must be insured.

Nondisabling Injury

An injury which may require medical care, but does not result in loss of working time or income.

Nondisabling Injury Benefit

A benefit in some disability income policies providing payment for medical expense due to injury when medical care is necessary but the insured is not totally disabled.

Nonforfeiture Option

One of the choices available if the policyholder discontinues premium payments on a policy with a cash value. This, if any, may be taken in cash, as extended term insurance or as reduced paid-up insurance.

Nonmedical Limit

The maximum face value of a policy that a given company will issue without the applicant taking a medical examination.

Nonoccupational Policy

Contract which insures a person against off-the-job accident or sickness. It does not cover disability resulting from injury or sickness covered by Workers' Compensation. Group accident and sickness policies are frequently non- occupational.

Nonoccupational Policy

One that provides off-the-job coverage only; it does not cover loss resulting from accidents or sickness arising out of or in the course of employment or covered under any workers' compensation law.

Nonparticipating Insurance

Plan of insurance under which the policy-holder is not entitled to share in the dividend distribution of the company.

Nonparticipating Policy

A life insurance policy in which the company does not distribute to policyholders any part of its surplus. Note should be taken that premiums for nonparticipating polices are usually lower than for comparable participating polices. Note should also be taken that some nonparticipating polices have both a maximum premium and a current lower premium. The current premium reflects anticipated experience that is more favorable than the company is willing to guarantee, and it may be changed from time to time for the entire block of business to which the policy belongs. (See also: Participating policy).

Nonparticipating Policy

One that does not provide for the payment of a dividend.

Occupational Hazards

Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that can be expected.

Occurrence

An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that results in bodily injury or property damage during the period of an insurance policy.

Occurrence policy

A liability insurance policy that covers claims arising out of occurrences that take place during the policy period, regardless of when the claim is filed.

Optionally Renewable Contract

A contract of health insurance in which the insurer reserves the right to terminate the coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates.

Ordinary Life Insurance

Life insurance usually issued in amounts of $1,000 or more with premiums payable on an annual, semi-annual, quarterly or monthly basis.

Ordinary Life

Synonymous With Whole Life and Straight Life: The three terms are applied to the type of policy which continues during the whole of the insured's life and provides for the payment of amount insured at this death.

Paid-up Insurance

Insurance on which all required premiums have been paid. The term is frequently used to mean the reduced paid-up insurance available as a non-forfeiture option.

Partial Disability

The result of an illness or injury which prevents an insured from performing one or more of the functions of his/her regular job.

Partial Disability

A benefit sometimes found in disability income policies providing for the payment of reduced monthly income in the event the insured cannot work full time and/or is prevented from performing one or more important daily duties pertaining to his occupation.

Participating Insurance

Insurance issued by an insurance company providing participation in dividend distribution.

Participating Policy

A life insurance policy under which the company agrees to distribute to policyholders the part of its surplus which its Board of Directors determines is not needed at the end of the business year. Such a distribution serves to reduce the premium the policyholder had paid. (See also: Policy dividend; Nonparticipating policy)

Participating Policy

One under which the policy owner is entitled to receive shares of the divisible surplus of the insurer. Such shares are commonly called dividends.

Pension Benefit Guaranty Corporation (PBGC)

The Federal body responsible for administering the plan termination insurance program under ERISA.

Pension Benefits

A series of payments to be provided in accordance with the plan of benefits.

Pension Plan

A plan established and maintained by an employer, group of employers, union or any combination, primarily to provide for the payment of definitely determinable benefits to participants after retirement.

Percentage Participation

A provision in a health insurance contract that the insurer and insured will share covered losses in agreed proportions. Also see Coinsurance.

Personal Injury Protection (PIP)

First-party no-fault coverage in which an insurer pays, within the specified limits, the wage loss, medical, hospital and funeral expenses of the insured.

Plan Administrator

The person or persons controlling the money or property contributed to the plan, usually designated in the plan agreement.

Policy

The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company.

Policy

A contract of insurance.

Policy

The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract.

Policy Dividend

A refund of part of the premium on a participating life insurance policy reflecting the difference between the premium charged and actual experience.

Policy Loan

A loan made by a life insurance company from its general funds to a policyholder on the security of the cash value of a policy.

Policy Term

That period for which an insurance policy provides coverage.

Policyholder

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.

Policyholder

A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance.

Portability

The transfer of pension rights and credits when a worker changes jobs.

Preadmission Certification

Process in which a health care professional evaluates an attending physician's request for a patient's admission to a hospital by using established medical criteria.

Preexisting Condition

A physical and/or mental condition of an insured which first manifested itself prior to the issuance of his/her policy or which existed prior to issuance and for which treatment was received.

Preexisting Condition

A physical condition that existed before the effective date of coverage.

Preferred Provider Organization (PPO)

An arrangement whereby a third-party payer contracts with a group of medical care providers who furnish services at lower than usual fees in return for prompt payment and a certain volume of patients.

Premium

The sum paid by a policyholder to keep an insurance policy in force.

Premium finance

Allows the insured to pay part of the premium when coverage takes effect and pay the rest during the policy period.

Premium Loan

A policy loan made for the purpose of paying premiums.

Primary Beneficiary

See Beneficiary.

Principal Sum

The amount payable in one sum in the event of accidental death and in, some cases, accidental dismemberment. When a contract provides benefits for both accidental death and accidental dismemberment, each dismemberment benefit is an amount equal to the principal sum or some fraction thereof.

Probate

The court-supervised process of validating or establishing a distribution for assets of a deceased including the payment of outstanding obligations.

Proof of Loss

Documentation presented to the insurance company by the insured in support of a claim so that the insurer can determine its liability under the policy.

Proof of Loss

Documentary evidence required by an insurer to prove a valid claim exists. It usually consists of a claim form completed by the insured and the insured's attending physician. For medical expense insurance itemized bills must also be included.

Qualification Period

The period during which the insured must be totally disabled before becoming eligible for residual disability benefits.

Qualified Impairment Insurance

A form of substandard or special class insurance, which restricts benefits for the insured person's particular condition.

Rate

The pricing factor upon which the insurance buyer's premium is based.

Rated Policy

Sometimes called an "extra-risk" policy, an insurance policy issued at a higher-than-standard premium rate to cover the extra risk where, for example, an insured has impaired health or a hazardous occupation.

Reasonable and Customary Charge

A charge for health care, which is consistent with the going rate or charge in a certain geographical area for identical or similar services.

Rebating

Giving any valuable consideration, usually all or part of the commission, to the prospect or insured as an inducement to buy or renew. Rebating is prohibited by law.

Recurring Claim Provision

A provision in some health insurance policies which specifies a length of time during which the recurrence of a condition is considered to be a continuation of a previous period of disability or hospital confinement.

Recurring Clause

A provision in some health insurance policies, which specifies a period of time during which the recurrence of a condition is considered a continuation of a prior period of disability or hospital confinement.

Reduced Paid-up Insurance

A form of insurance available as a nonforfeiture option. It provides for continuation of the original insurance plan, but for a reduced amount.

Rehabilitation

(1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some long- term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume productive employment.

Reimbursement

The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount specified in the policy.

Reinstatement

The resumption of coverage under a policy which has lapsed.

Reinsurance

Assumption by one insurance company of all or part of a risk undertaken by another insurance company.

Release

See Final Release.

Renewable Term Insurance

Term insurance which can be renewed at the end of the term, at the option of the policyholder and without evidence of insurability, for a limited number of successive terms. The rates increase at each renewal as the age of the insured increases.

Renewal

Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term.

Rescission

Termination of an insurance contract by the insurer on the grounds of material misstatement on the application for insurance. The action of rescission must take place within the contestable period or Time Limit on Certain Defenses but takes effect as of the date of issue of the policy, thus voiding the contract from its inception.

Reserve

(1) An amount representing liabilities kept by an insurer to provide for future commitments under policies outstanding. (2) An amount allocated for a special purpose. Note that a reserve is usually a liability and not an extra fund.

Residual Disability

A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the percentage of earnings loss.

Residual Disability Benefits

A provision in an insurance policy that provides benefits in proportion to a reduction of earnings as a result of disability, as opposed to the inability to work full-time.

Retention

The net amount of risk retained by an insurance company for its own account or that of specified others, and not reinsured.

Rider

A document which amends the policy or certificate. It may increase or decrease benefits, waive the condition of coverage or in any other way amend the original contract.

Rider

A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits otherwise payable.

Rider

A document that modifies the policy. It may increase or decrease benefits, waive a condition or coverage, or in any other way amend the original contract.

Right of Survivorship

At the death of one co-owner of property, that person's interest in the property automatically passes to the surviving joint tenant or tenants.

Risk

The chance of loss. Also used to refer to the insured or to property covered by a policy.

Risk

Any chance of loss.

Risk

A term used to refer to a person or the peril insured.

Risk Classification

The process by which a company decides how its premium rates for life insurance should differ according to the risk characteristics of individuals insured (e.g., age, occupation, sex, state of health) and then applies the resulting rules to individual applications. (See: Underwriting)

Self- Administered (Trustee or Directly Invested) Plan

A plan funded through a fiduciary, generally a bank, but sometimes a group of individuals, which directly invests the accumulated funds. Retirement payments are made from the fund as they fall due.

Self-Administration

The procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

Self-Insured Retention

A form of risk financing through which a firm assumes all or a part of its own losses.

Service-Type Plans

Plans that provide their benefits in the form of services rendered rather than cash (for example, Blue Cross and Blue Shield).

Settlement Options

The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid.

Sickness Insurance

A form of health insurance providing benefits for loss resulting from illness or disease.

Spouse's Benefit

Payments to the surviving spouse of a deceased employee, usually in the form of a series of payments upon meeting certain requirements and usually terminating with the survivor's remarriage or death.

Statutory Surplus

The amount left after a company's liabilities are subtracted from assets when both those values are computed using Statutory Accounting Principles (SAP)

Statutory Underwriting Profit or Loss

Premiums earned less losses and expenses.

Straight Life Insurance

Whole life insurance on which premiums are payable for life.

Substandard (Impaired Risk)

A risk that cannot meet the normal health requirements of a standard health insurance policy. Protection is provided in consideration of a waiver, a special policy form, or a higher premium charge. Substandard risks may include those persons who engage in certain sports and persons who are rated because of poor habits or morals.

Substandard Insurance

Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates.

Substandard Risk

An individual, who, because of health history or physical limitations, does not measure up to the qualification of a standard risk.

Supplementary Contract

An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

Surgical Expense Insurance

Health insurance policies, which provide benefits toward the physician's or surgeon's operating fees. Benefits may consist of scheduled amounts for each surgical procedure.

Surgical Schedule

A list of cash allowances attached to the policy, which are payable for various types of surgery, with a maximum amount based upon the severity of the operation.

Surgical Schedule

A list of maximum amounts payable by the policy for various types of surgery, with the amount based on the severity of the operation.

Surrender charge

An amount retained by the issuer of a life insurance policy when a policy is canceled, typically assessed only during the first five to ten years of a policy.

Temporary Life Annuity

An annuity payable while the annuitant lives but not beyond a specified period, such as five years. No payments are to be made after the end of the stipulated temporary period or the death of the annuitant.

Term Insurance

Life insurance payable to a beneficiary only when an insured dies within a specified period.

Term Insurance

Life or health insurance protection during a limited number of years but expiring without value if the insured survives the stated period.

Third Party

The claimant under a liability policy. So called because the person making the claim is not one of the two parties, insured and insurer, to the insurance contract. Third party claim: a demand made by a person against a policyholder of another company and any payment that will be made by that company.

Time Limit

The period of time during which a notice of claim or proof of loss must be filed.

Time Limit on Certain Defenses

The 2-year or 3-year time period in health policies after which the insurer cannot deny a claim or void the policy because of pre-existing conditions or misstatements on the application.

Total Disability

An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of work. (This wording varies among insurance companies.)

Transferability

Any arrangement under which the accumulated benefit credits of a terminating participant, or their actuarial value, are transmitted from one plan to another, or to a central agency.

Travel Accident Policy

A limited contract covering only accidents while an insured person is traveling, usually on a commercial carrier.

Treaty

An agreement between a reinsurer and a ceding insurer setting forth details of the reinsurance arrangement.

Unallocated Benefit

A policy provision providing reimbursement up to a maximum amount for the cost of all extra miscellaneous hospital services, but not specifying how much will be paid for each type of service.

Underwriter

1) a company that receives the premiums and accepts responsibility for the fulfillment of the policy contract; 2) the company employee who decides whether or not the company should assume a particular risk; 3) the agent who sells the policy.

Underwriting

The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.

Universal Life Insurance

A flexible premium life insurance policy under which the policyholder 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 rate which may change from time to time.

Variable Annuity

An annuity contract in which the amount of each periodic income payment may fluctuate. The fluctuation may be related to securities market values, a cost of living index, or some other variable factor.

Variable Annuity

An annuity under which the benefit varies according to the investment results of a life insurance company's separate account (usually invested primarily in common stocks).

Variable Life Insurance

Life insurance under which the benefits relate to the value of assets behind the contract at the time the benefit is paid. The amount of death benefit payable would, under variable life policies that have been proposed, never be less than the initial death benefit payable under the policy.

Waiting Period

The length of time an employee must wait from his/her date of employment or application for coverage, to the date his/her insurance is effective.

Waiting Period

(see "Elimination Period")

Waiver

An agreement attached to a policy which exempts from coverage certain disabilities or injuries that otherwise would be covered by the policy.

Waiver of Premium

A provision in some policies to relieve the insured of premium payments falling due during a period of continuous total disability that has lasted for a specified length of time, such as three or six months.

Whole Life Insurance

Life insurance payable to a beneficiary at the death of the insured whenever that occurs. Premiums may be payable for a specified number of years (limited payment life) or for life (straight life).

Whole Life Insurance

A plan of insurance for the whole of life. It includes straight life on which premiums are payable until death.