Premium Loan -
Many Cash Value Life Insurance Policies contain a provision by which an unpaid premium is automatically paid by borrowing
the needed funds from the cash balance. This prevents the policy from lapsing. |
Primary Beneficiary -
This refers to the first named beneficiary. See Beneficiary. |
Principle Sum -
The amount payable in a lump sum in the event of accidental death or certain accidental dismemberments or loss of sight.
Many times you will find this stated as one-half of the principle sum is payable for accidental loss of one arm, leg or eye. |
Proceeds -
The face amount of a life insurance policy payable to the beneficiary at the death of the insured. |
Proof of Loss -
A formal statement along with evidence (a death certificate) that provides the insurance company with sufficient information
for them to determine liability. |
Rated Policy -
This is a substandard policy, which means the physical or moral lifestyle of the insured is more susceptible to loss. It's
the opposite of a Preferred Risk. |
Reinstatement -
Putting a lapsed policy back in force. |
Renewable Term -
Term life insurance that can be renewed at the end of the term for an additional term without providing new evidence
of insurability. |
Rider -
Also known as endorsement, it's an amendment added to the life insurance policy to provide more or less benefits. |
Secondary Beneficiary -
Also known as Contingent Beneficiary, this is a person or entity named to receive life insurance proceeds at the death of
the insured only if the Primary Beneficiary is also deceased. |
Settlement Options -
This refers to how life insurance proceeds are to be paid to the named beneficiary(ies). It could be a lump sum or scheduled
payments. |
Surrender -
With Cash Value Life Insurance, this refers to taking the Cash Value out of the policy and releasing the insurance company
from its liability to pay a death benefit. |
Term Life Insurance -
Life insurance issued for a specific period of time, after which it is no longer in force. See Term Life Insurance
Guide. |
Universal Life Insurance - This Cash Value Life Insurance Policy
is a flexible premium adjustable policy. Its flexibility makes it a popular choice because it allows the policyowner to make
numerous choices about the face value amount and/or the premium. See our Universal
Life Insurance Guide. |
Whole
Life Insurance - The original permanent Cash Value insurance
that is still popular today. Its attraction is a level premium
based upon the age at issue. A young person is guaranteed
the low-age rate for life. See our Whole Life Insurance
Guide for more information. |
