Mode of Premium Payment

The frequency of premium payments during policy year. Premium payments can usually be made on annual, quarterly, or monthly basis.

Mortality Table

A statistical table showing death rate for each age.

Nonforfeiture Options

A provision in policy that allows policy holder to choose how cash value of policy will be used if policy is surrendered or lapses due to non-payment of premium.

Ownership

All rights, benefits, and privileges under a policy controlled by insured.

Paid-Up Insurance

A life insurance policy where all premiums have already been paid, with no further premium payment due.

Policy

The printed document issued to policy holder by company stating terms of insurance contract.

Policy Year

A one-year period starting on day and month policy was issued. The first policy year starts on date of issue, and ends on day before policy's first anniversary date.

Premium

The payment a policy holder is required to make to an insurance company to purchase insurance coverage and to keep policy in force.

Rated Policy

A policy issued with an additional premium to cover extra risk involved if an insured has impaired health, a hazardous occupation or hobby.

Reinstatement

The restoring of a lapsed or surrendered policy to full force and effect.

Renewable Increasable Convertible Term Insurance

This contract combines options of increasing sum assured, converting policy and renewing contract.

Reviewable Term

Level term assurance with an option to renew contract at end of term, without need for further medical evidence.

Rider

A provision added to a policy that provides additional benefits.

Settlement Option

The manner in which insured or beneficiary may choose to have policy proceeds paid.

Suicide Clause

A policy provision which reduces or eliminates amount to be paid if insured dies from suicide.

Surrender

To voluntarily terminate or cancel a policy for its cash value.

Term Life Insurance

This type of policy runs for a specified time period.

Underwriting

The process of evaluating applicants for insurance and classifying them fairly, so appropriate premium rate may be charged

Waiver of Premium

A provision added to a policy that will waive premium payments required by an insured during total disability of insured.

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is where sum assured decreases over time; hence, premiums are set lower. This is commonly used to cover a mortgage.

Whole Life Insurance

Life insurance that remains in force during insured's entire lifetime, provided premiums are paid as specified in policy. Whole life insurance also builds a savings element (called cash value) as a result of level premium approach to funding death benefit.

Burial Insurance

Burial Insurance, or Final Expense Life Insurance, is essentially a whole life product with small face values. The application process is simple and does not have associated medical requirements of other policy types. This type of life insurance is also referred to as a simplified issue or guaranteed issue policy.

Survivorship Life Insurance

A type of whole life insurance which insures two people and pays benefits only after second person dies. It is generally designed to provide funds to pay estate taxes.

Universal Life Insurance

An unbundled whole life insurance product in which mortality, investment, and expense factors used to calculate premium rates and cash values are expressed separately in policy. In a universal life insurance policy, any applicable expense charges are deducted from premium and remainder of premium is then credited to policy's cash value. Each month insurer deducts mortality costs from cash value and credits remainder of cash value with interest.

Variable Life Insurance

A form of whole life insurance under which death benefit and cash value of policy fluctuate according to investment performance of a separate account fund. Most variable life insurance policies guarantee that death benefit will not fall below a specified minimum. A minimum cash value is seldom guaranteed.

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