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Death
Benefit:
The amount of money paid to the beneficiary when the insured
person dies.
Decreasing
Term Insurance: Term life insurance on which the
face value slowly decreases in scheduled steps from the date
the policy comes into force to the date the policy expires,
while the premium remains level. The intervals between decreases
are usually monthly or annually.
Double
Indemnity: Payment of twice the basic benefit in
the event of loss resulting from specified causes or under
specified circumstances.
Evidence
of Insurability: Any statement or proof of a person's
physical condition, occupation, etc., affecting acceptance
of the applicant for insurance.
Exclusions:
Specified hazards listed in a policy for which benefits will
not be paid.
Face
Amount: The amount covered by the terms of an insurance
contract, usually found on the first page of the policy.
Final
Expenses: Expenses incurred at the time of a person's
death. These include but are not limited to:funeral costs,
court expenses, current bills or debt, mortgages, loans and
taxes.
Fixed
Benefit: A death benefit, the dollar amount of which
does not vary.
Free
Look: Trial period required in most states where
policy owners have up to 20 days to examine their new policies
with no obligation.
Funeral
Expenses: Expenses including casket, vault, grave
plot, headstone and funeral director.
Grace
Period: Period of time after the due date of a premium
during which the policy remains in force without penalty.
Graded
Premium Policy: A type of whole life policy designed
for people who want more life coverage than they can currently
afford. They pay a lower premium rate that increases gradually
over the first three to five years and then remains constant
over the life of the policy.
Guaranteed
Term: A form of renewable term insurance that remains
in force as long as the premiums are paid on time. With guaranteed
term insurance, the insurance company cannot terminate the
policy during the term.
Incontestable
Clause: A clause in a policy providing that a policy
has been in effect for a given length of time (two or three
years), the insurer shall not be able to contest the statements
contained in the application. In life policies, if an insured
lied as to the condition of his health at the time the policy
was taken out, that lie could not be used to contest payment
under the policy if death occurred after the time limit stated
in the incontestable clause.
Insurability:
The condition of the individual wishing to be insured, including
their health, susceptibility to injury and life expectancy.
Insurance:
A formal social device for reducing risk by transferring the
risks of several
individual entities to an insurer. The insurer agrees, for
a consideration, to pay for the loss in the amount specified
in the contract.
Insurance
Policy: The printed form which serves as the contract
between an insurer and an insured.
Insured:
The party who is being insured. In life insurance, it is the
person because of his or her death the insurance company would
pay out a death benefit to a designated beneficiary.
Insurer:
The insurance company; Party that provides insurance coverage,
typically through a contract of insurance.
Irrevocable
Beneficiary: A beneficiary that cannot be changed
without that beneficiary's consent.
Increasing
Term Insurance: Term life insurance in which the
death benefit increases periodically over the policy's term.
Usually purchased as a cost of living rider to a whole life
policy.
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