Accelerated Benefits
Rider A life insurance rider that allows for the early payment of some portion of the policy's face amount should the insured suffer from a terminal illness or injury.

Accidental Death and Dismemberment
Insurance providing payment if the insured's death results from an accident or if the insured accidentally severs a limb above the wrist or ankle joints or totally and irreversibly loses his or her eyesight.

Accidental Death Benefit Rider
A life insurance policy rider providing for payment of an additional benefit related to the face amount of the base policy when death occurs by accidental means.

Annually Renewable Term
A form of renewable term insurance that provides coverage for one year and allows the policy owner to renew his or her coverage each year, without evidence of insurability. Also called Yearly Renewable Term (YRT).

Beneficiary
Person to whom the proceeds of a life policy are payable when the insured dies. The various types of beneficiaries are: primary beneficiaries (those first entitled to proceeds); secondary beneficiaries (those entitled to proceeds if no primary beneficiary is living when the insured dies); and tertiary beneficiaries (those entitled to proceeds if no primary or secondary beneficiaries are alive when the insured dies).

AM Best's Insurance Report
A guide, published by A. M. Best, Inc., that rates insurers' financial integrity and managerial and operational strengths.

Conditional Receipt
Given to policy owners when they pay a premium at time of application. Interim coverage during the underwriting process is provided subject to terms and conditions of the receipt.

Contingent Beneficiary
Person or persons named to receive proceeds in case the original beneficiary is not alive. Also referred to as secondary or tertiary beneficiary.

Conversion Privilege
Allows the policy-owner, before an original insurance policy expires, to elect to have a new policy issued that will continue the insurance coverage. Conversion may be effected at attained age (premiums based on the age attained at time of conversion) or at original age (premiums based on age at time of original issue).

Convertible Term
Contract that may be converted to a permanent form of insurance without medical examination.

Decreasing Term Insurance
Term life insurance on which the face value slowly decreases in scheduled steps from the date the policy comes into force to the date the policy expires, while the premium remains level. The intervals between decreases are usually monthly or annually.

Insurance Company Ratings
There are five major insurance industry ratings services; A. M. Best, Standard & Poor's, Moody's, Fitch, and Weiss. These services provide information on insurance company financial performance, stability, claims paying ability, and more. The top ratings are: A. M. Best= A++, Standard & Poor's=AAA, Moody's=Aaa, Fitch=AAA, Weiss=A+. Generally, the Insurance Center recommends and provides quotes for companies that carry at least an A rating from A. M. Best. Occasionally, lower rating companies are quoted if price, product value and company performance justifies the selection.

Increasing Term Insurance
Term life insurance in which the death benefit increases periodically over the policy's term. Usually purchased as a cost of living rider to a whole life policy.

Level Term Insurance
Term coverage on which the face value and premiums remain unchanged from the date the policy comes into force to the date the policy expires.

Medical Examination
|Usually conducted by a licensed para-medical examiner. The medical report is part of the application, becomes part of the policy contract and is attached to the policy. A "non-medical" is a short-form medical report filled out by the agent. Various company rules, such as amount of insurance applied for or already in force; applicant's age, sex, past physical history; data revealed by inspection report, etc., determine whether the application will be accepted on "medical" or "non-medical." basis.

Other Insured Rider
A term rider covering an eligible family member or business member other than the insured that is attached to the base policy covering the insured.

Preferred Risk
A risk whose physical condition, occupation, mode of living and other characteristics indicate a prospect for longevity superior to that of the average longevity of unimpaired lives of the same age. (See standard risk.)

Premium
The periodic payment required to keep an insurance policy in force. "

Primary Beneficiary
In life insurance, the beneficiary designated by the insured as the first to receive policy benefits.

Proceeds Net amount of money payable by the company at the insured's death or at policy maturity.

Rider
Strictly speaking, a rider adds something to a policy. However, the term is used loosely to refer to any supplemental agreement attached to and made a part of the policy, whether the policy's conditions are expanded and additional coverages added, or a coverage or condition is waived.

Secondary Beneficiary
An alternate beneficiary designated to receive payment, usually in the event the original beneficiary predeceases the insured.

Smoker Ratings
Insurers will give a lower premium rate to buyers who do not smoke or use tobacco. If you smoked in the past, most carriers will consider you a non-smoker if you have not smoked for one year prior to applying for coverage. Consumers should be aware that nicotine can be detected in a variety of routine screenings tests that are now commonly required by most insurance companies.

Standard Risk
Person who, according to a company's underwriting standards, is entitled to insurance protection without extra rating or special restrictions.

Sub-Standard Risk
Person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.

Suicide Clause
Most life insurance policies provide that if the insured commits suicide within a specified period, usually two years, after the issue date, the company's liability will be limited to a return of premiums paid.

Term Insurance
Protection during limited number of years; expiring without value if the insured survives the stated period, which may be one or more years but usually is five to twenty years, because such periods usually cover the needs for temporary protection.

Term of Policy
Period for which the policy runs. In life insurance, this is to the end of the term period for term insurance.

Underwriter
Company receiving premiums and accepting responsibility for fulfilling the policy contract. Also, the term used to identify the insurance company employee who decides whether the company should assume a particular risk; or the agent who sells the policy.

Uninsurable Risk One not acceptable for insurance due to excessive risk.

Waiver of Premium
Rider or provision included in most life insurance policies exempting the insured from paying premiums after he or she has been disabled for a specified period of time, usually six months.

Whole Life Insurance
Whole Life Insurance is also know as Ordinary, Standard or Permanent life insurance. Unlike term insurance, whole life insurance provides insurance coverage for the lifetime of the insured. Whole life insurance policies also provide tax-deferred buildup of cash value, payable upon surrender or payment default.

Generally, permanent insurance has fixed premiums and death benefits. Other types of permanent coverage, such as Graded Premium Life, Universal Life, and Variable Life, offer variable premiums and death benefits.

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