An independent insurance rating firm that ranks firms on financial strength, operating performance and market profile.
Accelerated Death Benefit
Provides a loan secured by the death benefit while the insured person is terminally ill or meets certain other conditions. The owner must furnish medical proof of the terminal illness or other condition.
An acceptance or rejection for underwriting based on the answers to the questions on the application. An applicant is either accepted and issued a policy or rejected and denied coverage. In most cases, no additional medical records or tests are required to determine an applicant's eligibility.
Accidental Death Benefit
An additional death benefit to be paid if death is a direct result of an accident in accordance with the terms of the policy.
Activities of Daily Living
(ADLs) There are six activities considered ADLs, which are routine daily activities generally considered necessary for a self-sustaining person to remain independent. The six ADLs are eating, bathing, continence, dressing, toileting, and transferring.
A person who uses mathematics and statistics to determine insurance and annuity calculations, such as life expectancy, premiums, rates, etc.
The person whose lifetime is used as the measuring period to determine how long benefits are payable under a life annuity.
A means of saving money on a tax-deferred basis, when purchased from an insurance company. The monies in the annuity can be paid to you as a partial withdrawal, as a full withdrawal, or as a guaranteed income, usually at retirement.
Money you receive or your beneficiary receives from your annuity. The type and dollar value of the annuity you purchase determine when and how such money is paid out.
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A point of reference used for comparison.
The party or parties you designate as the recipient(s) of the death proceeds from your life insurance policy or annuity.
The amount of money paid when an insurance claim is approved; also referred to as policy benefit.
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The cash you receive if you cancel a life insurance policy or annuity that builds cash value. In a life insurance policy, the cash value is the amount of money, before adjustment for factors such as policy loans or late premiums, that the policyowner will receive if the policyowner allows the policy to lapse or cancels the coverage and surrenders the policy to the insurance company. Cash values are a feature of most types of permanent life insurance, such as whole life and universal life.
Interest paid on an initial investment (principal), as well as on the accrued interest.
The process by which the value of an investment increases exponentially over time because of compound interest.
Convertible Term Insurance
Life insurance coverage that you purchase to cover you for a specific period of time that can, during or at the end of the term, be converted to permanent life insurance. The permanent life coverage is available to you regardless of your health.
Current Interest Rate
The current rate of interest earned on a life insurance or annuity policy contract.
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Under a life insurance policy or annuity, the amount your beneficiary would be paid if you die while the policy is in effect. The amount is stated in the policy and is paid at face value plus the proceeds from any applicable insurance riders, minus any outstanding loan amounts.
A request for payment due to death under the terms of a life insurance policy or annuity contract.
A financial product that allows you to accumulate money on a tax-deferred basis, when purchased from an insurance company, that can subsequently be paid out as income stream or taken in a lump sum.
A retirement plan sponsored by your employer in which the benefits you receive at retirement are clearly defined and are not based on the amount you and/or your employer have contributed.
A retirement plan sponsored by your employer in which the benefits you receive at retirement are based solely on the contributions made by you and your employer and the earnings thereon. A 401K is a defined-contribution plan.
Inability to work due to an injury or sickness.
A provision in certain life insurance policies (also known as an accidental death benefit) that pays double the death benefit to your beneficiary if you should die in an accident or in another way as specified by your policy.
A duplicate policy for a life insurance product or a duplicate contract for a fixed annuity that policyholders can request if an original policy or contract is lost or destroyed.
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Electronic Funds Transfer (EFT)
A means of electronically depositing your earnings to or withdrawing payments from your bank.
An agreement attached to an insurance policy that adds or subtracts coverage and takes the place of the original terms of your policy.
A written agreement or clause added to your insurance policy that gives you additional coverage beyond the coverage provided for by your basic policy.
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A defined-contribution retirement savings account that lets you make pretax contributions up to a certain annual limit. Contributions may be matched by your employer.
Similar to a 401(k) plan but available only to employees of nonprofit organizations or public school system.
Under a life insurance policy, the basic amount of life insurance coverage.
Federal Deposit Insurance Company (FDIC)
The federal government's bank deposit insurer.
The process of developing and implementing a coordinated plan for achievement of financial objectives. It could include income tax planning, retirement planning, investment planning, risk management, and estate planning.
An independent insurance rating firm that rates firms based on financial strength.
A loan whose interest stays the same throughout the life of the loan.
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A transfer of property from one person to another without adequate and full consideration.
Expenses that should be considered in your monthly gift expense total would be birthdays, holidays, anniversaries, and other miscellaneous gift expenses.
Tax paid on the transfer of assets. It can be fully or partially offset by the annual gift tax exclusion and the applicable credit amount (formerly known as the unified credit).
The period of time after a loan or insurance payment due date before cancellation of the policy or default due to non-payment.
Guaranteed Interest Rate
The minimum rate of interest guaranteed to be creditied to a life insurance policy or annuity contract.
An insurance policy provision that guarantees you the right to renew the policy for the period stated in the policy, as long as you pay the premiums. Premiums may increase, but your coverage cannot be changed or denied.
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An employee is highly compensated if he or she: (1) was a 5% owner of the employer, or (2) received compensation for the preceding year in excess of $95,000.
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An annuity that begins paying out income payments within 12 months or less after the premium is paid.
Medical term used to describe a diagnosis of cancer wherein the tumor cells still lie within the tissue of the site of origin without having invaded neighboring tissue.
A measurement of the changes in the economy and financial markets.
Indexed Universal Life Insurance
Universal Life Insurance product that offers growth potential through the ability to earn Indexed Interest Credits linked, in part, to the performance of the Standard & Poor’s 5001 Composite Stock Price Index (excluding dividends), or S&P 500®1, with protection from downside risk through a minimum interest rate guarantee.
Individual Retirement Account (IRA)
A tax-deferred savings vehicle with a financial institution in which contributions may be invested in stocks, bonds, money market funds, etc.
Basic policy coverage amount and, if applicable, any supplementary term coverage.
Insured Insurability Benefit
Provides the insured with the right to purchase additional insurance on specified option dates occurring after issue of the original policy without evidence of insurability.
A permanent, unchangeable designation of your beneficiary.
A trust agreement that cannot be altered, amended, revoked, or terminated and is generally not subject to estate taxes.
The age of the insured on the date upon which a policy became effective.
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Joint Life Insurance
One insurance policy that covers two lives, with benefits payable either at the first death or the second death.
A person named jointly with another person as owner of an annuity contract or life insurance policy.
Joint Tenancy with Rights of Survivorship
Equal ownership of property by you and at least one other person. When you die, your interest passes to the other co-owner(s) instead of to your estate.
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A type of tax-deferred retirement account for self-employed persons.
For purposes of the top-heavy rules, a key employee is one who is (1) an officer whose salary exceeds $135,000 (officer status is limited to the greater of three or 10% of all employees, but not more than 50), (2) a more-than-5% owner of the employer, or (3) a more-than-1% owner of the employer whose salary exceeds $150,000.
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An annuity that pays out income periodically for your life and ends upon your death.
A statistical measurement of the number of years a person is expected to live.
A policy that pays your beneficiary a specified amount upon your death.
Benefit is reduced for certain conditions.
Loan Interest Rate
The percentage of interest charged when the basic policy value is released in the form of a policy loan. The applicable rate is stated in the policy contract.
An amount you can borrow from your life insurance policy.
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A brief physical examination that may be required to confirm height, weight and overall general health; commonly referred to as a ParaMed exam.
A "MEC" is a modified endowment contract. A modified endowment contract is a life insurance contract that does not satisfy the "7-Pay Test" as referenced in the Internal Revenue Code Section 7702A.
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No Lapse Guarantee
Agreement by the insurance company to keep the Universal Life Insurance policy in force, even if the Cash Value becomes zero or less than zero, provided that a specified Minimum Continuation Premium is made at the required time.
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The person who owns a life insurance policy or fixed annuity.
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Paid to Date
For traditional life insurance policies, this is the actual date to which the premium is paid. For universal life policies, this is the date that the policy costs have been deducted from the cash value fund. In addition, the Paid to Date for universal life policies is updated each month on the day of the policy anniversary providing there is sufficient value in the cash fund.
The identifying number assigned to a policy contract for a life insurance product or fixed annuity.
An insurance underwriting classification that calls for you to pay lower premiums than other insured persons because you have a lower risk of incurring a loss.
The amount of money you pay as a single payment or periodically to maintain insurance coverage.
If other than the owner, the person to whom notices are mailed and who remits the premium payments to the Company. The premium payer has only limited rights regarding access to policy or annuity information.
In life insurance, the difference between the face amount and cash value. Also referred to as the net amount at risk.
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Qualified distribution from a Roth IRA must satisfy a five-year holding period and one of four requirements: (1) made on or after age 59½; (2) made to beneficiary on or after individual's death; (3) attributable to being disabled; or (4) used to pay for qualified first-time home buyer expenses.
A tax-deferred savings plan, such as a profit-sharing or a pension plan, or individual retirement account (IRA).
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Insurance that costs you a higher premium because you have a physical impairment, past medical condition, hazardous occupation, dangerous hobby, or some other underwriting risk.
Defines how an individual or organization is connected to a life insurance policy or fixed annuity contract. The most common relationships are insured, owner, and payer.
Relationship to Insured/Annuitant
Defines how a beneficiary is related to the insured/annuitant (e.g., spouse, mother, brother, friend, etc.).
A variety of different items that are ordered for examination by underwriters in order to effectively evaluate risk and make an assessment on an applicant's insurability. These requirements are obtained from several independent third-party providers of such information.
Return of Premium
Specific policies, upon the insured' death, will return to the owner or to the owner's beneficiary if the owner is deceased or to the owner's estate if there is nstrongo beneficiary, all or part of the premiums paid.
The date on which an underwriter evaluates an underwriting requirement.
An attachment that amends a contract or policy.
Indicates the present status of the rider.
An IRA that allows an individual to consolidate retirement dollars from a number of sources, such as 401(k), 403(b), or governmental 457 plans.
Roth Conversion IRA
An IRA that is established by converting assets from a Traditional or Rollover IRA into a Roth IRA.
A retirement savings vehicle in which contributions are made with after-tax dollars. Withdrawals of contributions can be made without taxes at any time. Withdrawals of earnings are taxable but only when the withdrawal is not a “qualified” distribution.
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Securities and Exchange Commission (SEC)
A federal agency charged with overseeing and regulating certain U.S. financial markets.
Single Premium Deferred Annuity
A single-premium deferred annuity allows for one single, lump-sum contribution. Your money grows tax-deferred until you withdraw it or begin receiving a stream of income payments.
Single Premium Immediate Annuity
A single-premium immediate annuity generates income payments one period after you purchase the annuity. Single-premium immediate annuities allow you to set up an immediate, steady income stream with a one-time, lump-sum contribution.
Social Security Number (SSN)
A nine-digit identification number issued by Social Security.
Spouse Accidental Death Benefit
Additional death benefit to be paid if the death of the spouse is a result of an accident.
Spouse Death Benefit
Death benefit amount for a spouse covered by a spouse rider.
Standard and Poor's (S&P)
A leading rating agency in the evaluation of the financial soundness of corporations and businesses, used for investment performance measurement.
The current standing of a policy or contract.
An amount deducted from your policy value when you surrender your life insurance policy or annuity and receive the cash value during certain periods specified in the policy.
Survivorship Life Insurance
Also called second-to-die or last-to-die insurance. Survivorship life insurance covers the lives of two people, and pays benefits when the second person dies. It is often used by couples to fund estate tax liability.
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Postponement of the payment of taxes on a retirement or annuity plan until the income payments begin.
Tax-Deferred Retirement Plan
A retirement savings plan that lets you make contributions and accumulate earnings tax-free until you receive them as benefits, at which time you are normally in a lower tax bracket.
Taxpayer Identification Number (TIN)
A nine-digit taxpaying identification number assigned by the United States Internal Revenue Service to an individual or business.
Term Life Insurance
Life insurance that provides coverage for a specific time period.
An IRA that may have deductible contributions. Earnings grow tax-deferred until withdrawn.
Property interest held by one person for the benefit of another.
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The process used by insurance companies to determine how much life or other types of insurance you can qualify for and at what price, based upon your risk factors.
Universal Life Insurance
Life insurance that builds tax-deferred cash value for you either at a guaranteed minimum rate of return plus an additional return as credited by the insurance company or based upon market performance. It also lets you change the amount of your premium payments and/or coverage amount within certain limits, depending on your circumstances or needs.
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Waiver of Premium
An optional benefit on some insurance policies that either pays all or a portion of premiums due, or waives premiums, if the insured becomes totally disabled.
Whole Life Insurance
Permanent life insurance that provides protection to age 100 as long as you pay the fixed premiums. Accumulates tax-deferred cash value that you can borrow against through an interest-bearing loan or receive if you surrender the policy.
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