Our glossary of terms
If a word or phrase is capitalized, we have included it in our glossary.
Accelerated Death Benefit
Accidental Death
Actuary
Administrative Fee
Assignment
Automatic Premium Loan
Beneficiary
Burial Policy
Cash Value
Certificate
Chronically Ill
Contestability Period
Conversion
Credit Life
Death Benefit
Decreasing Term
Dividends
Double Indemnity
Endowment
Escrow Agent
Face Amount
Family History
First to Die
Fraud
Free Look
Genetic Testing
Grace Period
Group Life
Guaranteed Issue
Guaranteed Rate
In Force
Insurable Interest
Insured
Lapse
Life Expectancy
Life Insurance
Life Settlement
Life Settlement Provider
Loan
Mortality Charge
Net Death Benefit
Nonforfeiture Benefits
Outlay
Owner
Paid-Up
Participating Policy
Policy Owner
Preferred Rate
Provider
Purchase Agreement
Purchaser
Reinstatement Period
Related Provider Trust
Renewable Term
Replacement
Rider
Risk
Risk Factor
Sales Contract
Settlement Option
Suicide Clause
Surrender Charge
Term Life
Terminally Ill
Underwriting
Universal Life
Variable Life
Viatical Settlement
Viatical Settlement Provider
Viatical Settlement Broker
Viaticate
Viator
Waiver of Premium
Whole Life
A Life Insurance policy provision or rider that lets you collect part of your Death Benefit before you die. If you have a Terminal Illness, the insurer advances you a specified part of your Death Benefit, which reduces the Death Benefit your Beneficiary receives. The amounts paid to you under this provision or rider can be used for whatever purpose you would like.
A provision or rider that provides additional Death Benefit (usually double) if you die in an accident. Also known as Double Indemnity.
A mathematics expert who applies probability theory to the business of Life Insurance and whose job it is to calculate Premiums, policy reserves and other values.
Charges deducted from the Cash Value accumulation each year for the costs associated with administering the policy.
Giving rights under the insurance policy to someone else. You can assign Beneficiary rights or policy ownership.
A provision in a policy that authorizes the insurance company to automatically withdraw money from your policy’s Cash Value to pay Premiums.
The person you designate to be paid a Death Benefit when you die. You may designate one or more Beneficiaries.
A policy with a relatively small Death Benefit, intended to cover your funeral and burial expenses.
The savings portion of a life policy. When your Premium payments are more than the cost of insurance, the excess goes into a Cash Value account and draws interest.
The evidence of coverage received by someone insured through a group life policy.
This means (1) being unable to perform at least two activities of daily living (i.e., eating, toileting, transferring, bathing, dressing or continence), or (2) requiring substantial supervision to protect the individual from threats to health and safety due to severe cognitive impairment.
The period of time after a Life Insurance policy is issued that the insurer can challenge having to provide coverage. Typically, this is two years.
Changing a term life policy to some other form, typically permanent. This can be done only when the policy is described as convertible.
A policy intended to pay off a debt (typically for a mortgage, car or other kind of loan) if you die while your debt is still outstanding.
The money that an insurance company will pay to your Beneficiary when you die.
A term life policy for which the Death Benefit goes down each year.
A return of Premiums paid when then amount collected by the insurer is greater than needed to cover the cost of insurance.
See Accidental Death.
A Cash Value policy that sets a specific time at which the Cash Value will equal the Death Benefit. For example, If you buy a $100,000, 30-year endowment policy, you will immediately be insured for $100,000. If you are still living at the end of 30 years, you will receive $100,000 in cash.
An entity that is a state or federally regulated financial institution organized under the laws of the United States or any state, whose responsibilities include accepting investor funds, transferring funds in order to purchase policies, paying insurance Premiums and receiving Death Benefits for all policies where Viatical Investors are not the beneficiaries.
The initial amount an insurance company promises to pay when the insured person dies, or at the maturity of the contract.
Information about medical conditions of your parents and other immediate family members. Companies may increase your Premiums or choose not to provide coverage to you based on your family’s history of cancer, heart attacks, diabetes or other conditions.
Provision in a policy that insures both two people, normally a husband and wife. When the first insured dies, the Beneficiary receives the Death Benefit.
Any time someone knowingly provides false or incomplete information on an application for insurance or on a claim.
A time after you receive the policy for you to review and consider whether you wish to keep the policy.
Using modern scientific analysis of your blood or other cells to determine whether you have any genetic conditions that might make it more likely that you would die earlier than the average person.
The time after an insurance Premium is due during which the Premium can still be paid with no interest charged, and coverage remains in force. This period is typically 30 days.
A policy issued to an employer, association, or other organization.
A policy that is sold to all applicants without regard to their health.
The minimum interest rate that the insurance company is required to use to credit on any Cash Value in the policy.
In effect. A policy is In Force when all conditions have been met to establish or maintain the insurance company's obligation to pay a Death Benefit if you die.
A relationship that the Owner (and typically Beneficiary) has with the Insured that creates a reason for the Owner to acquire Life Insurance. This must exist at the time the policy is issued.
The individual(s) that is (are) being covered under the Life Insurance policy.
The termination of an insurance policy as a result of failure to pay the Premium or other amounts due.
The number of months the individual insured under the Life Insurance policy to be Viaticated can be expected to live as determined by the Life Settled Viatical Settlement Provider considering medical records and appropriate experiential data.
A contract that provides for the payment of Death Benefits upon the death of the insured.
A financial transaction in which a policy owner possessing an unneeded or unwanted Life Insurance policy sells the policy to a third party for more than the Cash Value offered by the Life Insurance company. The Purchaser becomes the new Owner and Beneficiary of the policy at maturation and is responsible for all subsequent Premium payments. The Insured must have a Life Expectancy of more than two years.
See Provider.
A debt incurred when policy Cash Value is borrowed. Interest will be charged and any amount borrowed (including interest) will be deducted from the Death Benefit until the debt has been repaid.
The cost of insuring you at your current age.
The amount of the Life Insurance policy or certificate less any outstanding debts or liens.
Amounts of Cash Value that is required to be paid to you by the insurance company if you surrender or cancel the policy. Typically these benefits are associated with Whole Life policies.
The amount you pay the insurance company for insurance (includes Premiums and any Loan principal and/or interest payments).
The person (or entity) that possesses control of the Life Insurance policy or a certificate holder under a group policy. This person has the right to designate Beneficiaries, take Loans and sell the policy.
A policy on which all Premium payments have been made.
A policy that has the possibility of paying dividends.
See Owner.
The rate the company charges people who have the lowest mortality risks.
An entity that serves as the Purchaser’s representative to facilitate the Viatical or Life Settlement purchase of a Life Insurance policy.
A Contract or agreement entered into by a Provider with a Purchaser, to which the Owner is not a party, to purchase a policy or an interest in a Life Insurance policy, or acquire a beneficial interest, or a certificate issued pursuant to a group Life Insurance policy.
The acquirer of a Life Insurance policy that is being Viaticated or Life Settled.
The amount of time an insurance company allows for the restoration of a policy that has lapsed due to non-payment of Premium after the grace period has ended. This period can be as long as three years from the Premium due date and typically requires evidence of insurability.
A titling trust or other trust established by a licensed Provider or a Financing Entity for the sole purpose of holding ownership or beneficial interest in purchased policies in connection with a Financing Transaction. In order to qualify as a Provider Trust, the trust must have a written agreement with the licensed Provider under which the licensed Provider is responsible for ensuring compliance with all statutory and regulatory requirements and under which the trust agrees to make all records and files relating to life settlement transactions available to the Department of Insurance as if those records and files were maintained directly by the licensed Provider.
A term life policy that guarantees you the right to renew at the end of the term.
The acquisition of a new Life Insurance policy in substitution of an existing policy.
An addition or amendment to an insurance policy.
The likelihood that you will die while insured.
Things about you that affect your risk, such as age, smoking, hazardous occupation or Family History.
A written agreement between a Provider and an Owner for the acquisition of a Life Insurance policy.
How a Beneficiary receives payment of the Death Benefit.
A Life Insurance policy provision that allows the insurance company to not pay Death Benefits if the Insured commits suicide within the first two years after the policy is issued.
A fee the insurance company deducts from the Cash Value if a Life Insurance policy is surrendered prematurely.
The simplest form of Life Insurance, it provides no Cash Value and the insurance company promises to pay Death Benefits if death occurs while the policy is In Force.
Having an illness or sickness that can reasonably be expected to result in death in twenty-four (24) months or less.
The insurance company's process for determining whom it will insure.
A type of Life Insurance contract that accumulates Cash Values and pays a Death Benefit. You choose the policy's Premium and face amount, and you can adjust these as long as the policy is In Force. Reserves are placed in the insurance company's general account.
A type of Life Insurance contract that accumulates Cash Values and pays a Death Benefit. You choose the policy's Premium and face amount, and you can adjust these as long as the policy is In Force. The face amount and Cash Value rely on the investment performance of a special fund. Reserves are placed in investment accounts that are separate from the insurance company's general account.
The sale of a Life Insurance policy to a third party where the insured has a Life Expectancy of two years or less.
See Provider.
The representative who assists the Owner in a Viatical Settlement.
To sell a Life Insurance policy to a third party when the Insured is Terminally Ill.
A Terminally Ill person who sells their Life Insurance policy to a third party and receives a lump sum cash payment.
A provision that suspends the obligation to pay Premiums when the Insured is disabled or meets some other policy requirement.
A type of Life Insurance contract that accumulates Cash Values and pays a Death Benefit.
Premiums generally are the same every year and Premiums in excess of the amount required to pay Mortality and Administrative Fees accumulate as Cash Value.