Title.
Life Insurance Definitions to Help You
Life insurance has its own vocabulary. Some insurance terms sound familiar, but have a different meaning when used in the life insurance world. The following insurance glossary provides insurance terms and life insurance definitions to help you speak the "language of life."
Attained Age (Age Last Birthday)
A method for determining the age of the proposed insured for premium calculations. This method uses the proposed insured's actual age in years. For example, a person who is 34 years and 5 months old would be classified as a 34-year old, as would a person who is 34 years and 7 months old. (See also: Nearest Age)
Beneficiary
The beneficiary of your insurance policy is the person designated by you to receive the policy benefits upon your death. You may designate that the benefits from your policy be allocated to multiple beneficiaries. And you may change your beneficiary designations at any time.
Coverage Amount / Face Amount
The initial value of the policy to be paid to the insured’s beneficiary(ies) in the event of the death of the insured while the policy is in force. This value does not include adjustments for outstanding policy loans, withdrawals, dividends, paid-up additions or late/outstanding premium payments.
Date of Birth
The premiums that insurance companies charge for life insurance are based in large part on the age of the proposed insured. Some companies use the attained age of the insured in this calculation, while other companies use the nearest age of the insured.
Health & Lifestyle Profile
The premiums that insurance companies charge for life insurance are also based in large part on the overall health and lifestyle profile of the proposed insured. Typically, individuals in good health who do not use any kind of tobacco products or engage in any hazardous activities will be able to obtain less expensive coverage than individuals who are in poor health or who use tobacco or who engage in hazardous activities. Different insurance companies use different criteria in determining the health status and lifestyle of the proposed insured.
Insured
An individual who is currently covered under an existing life insurance policy.
Length of Coverage
Different term life insurance policies have different durations.
10, 15, 20, and 30-year term life insurance policies are very common. A 10-year level term policy will have an initial 10-year period in which premiums are level.
Nearest Age
A method for determining the age of the proposed insured for premium calculations. This method takes into account whether the proposed insured is nearer to his/her last birthday or his/her next birthday. For example, a person who is 34 years and 5 months old would be classified as a 34-year old for the premium calculations. In contrast, a person who is 34 years and 7 months old would be classified as a 35-year-old for the premium calculations. (See also: Attained Age)
Premium
A payment to a life insurance company in exchange for a life insurance policy.
Premium Mode
The frequency in which premiums are paid. Typically, the total annual premium is slightly higher when payments are spread out over the course of the year as opposed to being paid all at once. For example, a policy with a $100 annual premium may also offer a $51 semiannual premium ($102 total annual cost), a $26 quarterly premium ($104 annual cost) and a $9 monthly bank draft premium ($108 annual cost).
Proposed Insured
An individual who is applying for coverage under a life insurance policy. (see also: Insured)
Underwriting Classification
(See: Health & Lifestyle Profile, above.)
Sex
The gender (male or female) of the insured or proposed insured.
State of Residence
The state in which the insured or proposed insured resides. It is not unusual for a given insurance company to be licensed to conduct business in some states and not in others. If an insurance company is not licensed to do business in a particular state, the company may not offer any of its products in that state. If an insurance company is licensed to do business in a particular state, each of the company's products must be individually approved for sale in that state. It is not unusual for a given insurance company to have products that are approved for sale in one state and not approved for sale in others.
Underwriting Guidelines
Underwriting guidelines are the health and lifestyle criteria for the proposed insured that insurance companies use to determine the appropriate underwriting classification upon which to base the premiums for the coverage. These criteria typically include age, gender, tobacco use, height/weight build, family history of heart disease or cancer, cholesterol levels, blood pressure levels, specific health conditions, driving record, hazardous occupation or activities, military service, aviation, foreign travel or residency, U.S. citizenship and felony criminal activity. It is important that all of these underwriting guidelines are taken into consideration when evaluating any premiums quoted for life insurance coverage.
Disability Insurance
Spivey And Associates has a wide range of insurance products to fit every need and budget. Perhaps a recent event in your life is causing you to re-examine if you're adequately protected. Whatever your reasons Spivey And Associates can help you be more informed. No one plans to get sick or hurt. Unfortunately, an unexpected injury or illness can affect your ability to work... thus compromising the income stream upon which you and your loved ones depend. What you can do is protect yourself and your loved ones through sound financial planning, including disability insurance. Becoming disabled through an injury or sickness can mean a significant loss of income. Disability insurance is a form of health insurance that provides a person who becomes disabled with income to cover living expenses that continue in spite of the disability. This section gives you information about sources of coverage, individual disability insurance, and a disability needs calculator.
There are many types of health insurance plans available to consumers today and each type of plan has different rules, costs, and coverage. Understanding these different types of health insurance plans is the first step in choosing the coverage that is right for you and your family.
In the past, HMO's, or Health Maintenance Organizations, have been one of the most popular types of health insurance plans available to individuals and business owners. In recent years, however, more flexible types of plans like PPO's (Preferred Provider Organizations) and point-of-service plans have become more popular as medical insurance consumers demand greater freedom over their healthcare.
There are also many new types of supplemental health coverage that are available to consumers. Finally, there are new types of plans like health savings accounts that are used in conjunction with another type of health plan to offer even greater flexibility and savings to consumers.
Life insurance has its own vocabulary. Some insurance terms sound familiar, but have a different meaning when used in the life insurance world. The following insurance glossary provides insurance terms and life insurance definitions to help you speak the "language of life."
Attained Age (Age Last Birthday)
A method for determining the age of the proposed insured for premium calculations. This method uses the proposed insured's actual age in years. For example, a person who is 34 years and 5 months old would be classified as a 34-year old, as would a person who is 34 years and 7 months old. (See also: Nearest Age)
Beneficiary
The beneficiary of your insurance policy is the person designated by you to receive the policy benefits upon your death. You may designate that the benefits from your policy be allocated to multiple beneficiaries. And you may change your beneficiary designations at any time.
Coverage Amount / Face Amount
The initial value of the policy to be paid to the insured’s beneficiary(ies) in the event of the death of the insured while the policy is in force. This value does not include adjustments for outstanding policy loans, withdrawals, dividends, paid-up additions or late/outstanding premium payments.
Date of Birth
The premiums that insurance companies charge for life insurance are based in large part on the age of the proposed insured. Some companies use the attained age of the insured in this calculation, while other companies use the nearest age of the insured.
Health & Lifestyle Profile
The premiums that insurance companies charge for life insurance are also based in large part on the overall health and lifestyle profile of the proposed insured. Typically, individuals in good health who do not use any kind of tobacco products or engage in any hazardous activities will be able to obtain less expensive coverage than individuals who are in poor health or who use tobacco or who engage in hazardous activities. Different insurance companies use different criteria in determining the health status and lifestyle of the proposed insured.
Insured
An individual who is currently covered under an existing life insurance policy.
Length of Coverage
Different term life insurance policies have different durations.
10, 15, 20, and 30-year term life insurance policies are very common. A 10-year level term policy will have an initial 10-year period in which premiums are level.
Nearest Age
A method for determining the age of the proposed insured for premium calculations. This method takes into account whether the proposed insured is nearer to his/her last birthday or his/her next birthday. For example, a person who is 34 years and 5 months old would be classified as a 34-year old for the premium calculations. In contrast, a person who is 34 years and 7 months old would be classified as a 35-year-old for the premium calculations. (See also: Attained Age)
Premium
A payment to a life insurance company in exchange for a life insurance policy.
Premium Mode
The frequency in which premiums are paid. Typically, the total annual premium is slightly higher when payments are spread out over the course of the year as opposed to being paid all at once. For example, a policy with a $100 annual premium may also offer a $51 semiannual premium ($102 total annual cost), a $26 quarterly premium ($104 annual cost) and a $9 monthly bank draft premium ($108 annual cost).
Proposed Insured
An individual who is applying for coverage under a life insurance policy. (see also: Insured)
Underwriting Classification
(See: Health & Lifestyle Profile, above.)
Sex
The gender (male or female) of the insured or proposed insured.
State of Residence
The state in which the insured or proposed insured resides. It is not unusual for a given insurance company to be licensed to conduct business in some states and not in others. If an insurance company is not licensed to do business in a particular state, the company may not offer any of its products in that state. If an insurance company is licensed to do business in a particular state, each of the company's products must be individually approved for sale in that state. It is not unusual for a given insurance company to have products that are approved for sale in one state and not approved for sale in others.
Underwriting Guidelines
Underwriting guidelines are the health and lifestyle criteria for the proposed insured that insurance companies use to determine the appropriate underwriting classification upon which to base the premiums for the coverage. These criteria typically include age, gender, tobacco use, height/weight build, family history of heart disease or cancer, cholesterol levels, blood pressure levels, specific health conditions, driving record, hazardous occupation or activities, military service, aviation, foreign travel or residency, U.S. citizenship and felony criminal activity. It is important that all of these underwriting guidelines are taken into consideration when evaluating any premiums quoted for life insurance coverage.
Disability Insurance
Spivey And Associates has a wide range of insurance products to fit every need and budget. Perhaps a recent event in your life is causing you to re-examine if you're adequately protected. Whatever your reasons Spivey And Associates can help you be more informed. No one plans to get sick or hurt. Unfortunately, an unexpected injury or illness can affect your ability to work... thus compromising the income stream upon which you and your loved ones depend. What you can do is protect yourself and your loved ones through sound financial planning, including disability insurance. Becoming disabled through an injury or sickness can mean a significant loss of income. Disability insurance is a form of health insurance that provides a person who becomes disabled with income to cover living expenses that continue in spite of the disability. This section gives you information about sources of coverage, individual disability insurance, and a disability needs calculator.
There are many types of health insurance plans available to consumers today and each type of plan has different rules, costs, and coverage. Understanding these different types of health insurance plans is the first step in choosing the coverage that is right for you and your family.
In the past, HMO's, or Health Maintenance Organizations, have been one of the most popular types of health insurance plans available to individuals and business owners. In recent years, however, more flexible types of plans like PPO's (Preferred Provider Organizations) and point-of-service plans have become more popular as medical insurance consumers demand greater freedom over their healthcare.
There are also many new types of supplemental health coverage that are available to consumers. Finally, there are new types of plans like health savings accounts that are used in conjunction with another type of health plan to offer even greater flexibility and savings to consumers.