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Life Insurance Licen
Life Insurance Licensing
| Term | Definition |
|---|---|
| adjustable life | This policy allows the policyowner to adjust the policy's face amount,premium,and type of protection without having to complete a new application or any additional underwriting. |
| aviation exclusion | The insurer willl not pay a claim if the insured dies as a result of flying an aircraft or acting as a member of a flight crew. In most cases, the insurer will offer the applicant the opportunity to purchase a rider offsetting the exclusion. |
| conditional receipt | Given to the policyowners when they pay a premium at time of application. In this case, the applicant is covered the later of the date of the application or proof of insurability, even though the policy may not have been issued. |
| agents (producers) report | The section of an insurance application where the agent (producer) details personal observations about the applicant. |
| buyers guide | a generic publication that explains life insurance in a way that an average consumer can understand. It does not contain specific product or policy information. |
| consideration,legal purpose, offer, acceptance and competent parties. | The five parts of a legal contract. |
| conversion privilege (convertibility) | Allows the policyowner, before an original incaurance policy expires, to elect to have a new permanent policy issued that will continue the insurance coverage without evidence of insurability. |
| endow | When the cash value in a permanent policy is equal to the death benefit, the policy matures (or s paid out). This is asumed to happen at age 100. |
| credit life insurance | Decreasing term insurance covering the unpaid balance of a mortgage or installment loan. If the borrower dies, benefits pay balance due. May be individual or group policy. |
| exclusion ratio | A percentage used to determine the amount of annual annuity income exempt from federal income tax. |
| dividend | Policyowner's share in the divisible surplus of a company issuing participating policies;paid as a return of premium. |
| fraternal insurance | A not-for-profit insurance company Owned by policy owners Issues participating (PAR) policies Run by the lodge system May assess policy owners No legal reserve requirement |
| defined contribution plan | A tax-qualified retirement plan in which annual contributions are determined by a percentage of the employees salary. |
| face amount | This is the same as the guaranteed death benefit. This benefit may be decreased by loans or increased by additional riders or provisions. |
| annually renewable term (ART) | A form of renewable term insurance that provides coverage for one year and allows the policyowner to renew coverage each year, without evidence of insurability. |
| Buy-sell agreement | Agreement that a deceased businessowner's interest will be sold and purchased at a predetermined price according to a predetermined formula. |
| 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. |
| apparent authority | The insured believes the agent has authority to act based on actions, words or deeds of the agent. Even thought the agent may not have been granted such authority by the insurer, they will be held liable for the actions of the agent. |
| churning | Replacing one life contract with another within the same company without demonstrating a benefit to the client. |
| adhesion | The contract must be accepted by the insured exactly as it is written by the isurer. The terms of the contract cannot be negotiated. The contract is offered on a take it or leave it basis. |
| automatic premium loan provision | Authorizes the insurer to automatically pay any premium in default at the end of the grace period. The premium owed plus interest charged is deducted from the policy's cash value. |
| Common disaster provision | This policy provision provides an alternative beneficiary in the event that the insured and the original beneficiary die as the result of a common accident. |
| admitted insurer | An insurance company that has been approved to operate within a given jurisdiction. (Also known as an authorized or approved company or carrier). |
| beneficiary | Person to whom the proceeds of a life or accident policy are payable when the insured dies. |
| Consideration | Element of a legal contract consisting of premium payment and statements made by the prospective insured in the application. |
| absolute assignment |
Created by:
cathynowalk
Popular Insurance sets