Thursday, December 08, 2016
Life Insurance Glossary
Call us at (800) 940-3002
Paramedical Exam (Paramed):
A medical examination performed by a non-physician medical professional used to
determine an applicant's health risk. The health risk is used in determining insurability
and premium classification for life and health insurance.
A disability that prevents the insured from performing all of the normal duties
associated with their occupation.
Damage to property that falls short of a total loss.
Participating Policy (par):
Life insurance policy where the policyowner receives dividends from the insurance
A term used in the designation of beneficiaries. All surviving beneficiaries will
share equally in the death benefit. If one beneficiary predeceased the insured,
the remaining beneficiaries will share equally in the death benefit.
A term used in the designation of beneficiaries. The distribution of the death benefit
among beneficiaries with the provision that protects the heirs of each beneficiary
in case the beneficiary dies before the insured. If one beneficiary predeceased
the insured, that beneficiary's heirs would share equally in the death benefit of
Permanent Life Insurance:
A policy that provides coverage throughout the insured's lifetime, with no policy
expiration date, as long as premium payments are made. This policy may also build
The percentage of policies that remain in force and have not lapsed. The higher
the persistency for an insurer, the better the retention of business.
A legal document that details the terms of an agreement between an insurance company
and a policy owner.
The anniversary of the date a policy was issued.
The date on which a policy is in effect. This may be different than the issue date,
if the policy was backdated.
A flat charge, added to the basic premium cost, used for the administrative expenses
the insurance company incurs in processing a policy.
Policy Not Taken:
A Policy is not taken when an applicant decides not to accept the policy. If a policy
was prepaid and the applicant declines the policy within the free-look period, the
premium is fully refunded to the applicant.
Person(s) or other entity who is the owner of the insurance policy.
Power of Attorney:
A legal document that authorizes a specific person to act on behalf of the another
person. This generally applies to signing certain legal documents and making decisions
on behalf of the another person. A power of attorney may be designated to help decide
the payment options for a beneficiary.
An applicant or insured that represents lower risk than the standard category that
was used to calculate the premium rate. This usually results in lower premiums.
The payment(s) necessary to keep an insurance policy in force. Premiums are calculated
based on the applicant's/insured's risk level of incurring a loss.
This is a notice from the insurance company detailing how much premium payment is
due, and by what date.
The entity (relative, business, trustee, etc.) selected by the owner of the policy
to whom the proceeds are payable in the event of the insured's death.
Proof of Loss:
Formal documentation by the policy owner to the insurer about any incurred losses.
This documentation is needed to assess the loss and also required before an insurer
will compensate the policy owner for the loss.
The contents of an insurance contract that details the terms of the policy and the
obligations and rights of the insured and the insurance company.
For more reference, click on any of the letters below to find life insurance terms
that begin with that letter.
A B C D E F G H I J K L M N O Q R S T U V W X Y Z