Life Insurance, Life assurance, Closed Books
Assignment
The transfer of the ownership rights of a Life Insurance policy from one person to another.
Closed Books
Policies that are no longer sold but are still on the books of a life insurance carrier as premium-paying policies. The hardware and application maintenance costs for the systems that run the life closed books are high because they are often run on antiquated systems that have been starved of new investments based on these systems not being strategic to the direction of the carrier moving forward. Life closed books after all are caused by either discontinuing unprofitable products or as a result of acquisitions and mergers.
Collateral Assignment
Assign all or part of a life insurance policy as security for a loan. If the insured dies the creditor would receive only the amount due on the loan.
Cross Purchase
A form of business life insurance in which each party purchases life insurance on each other.
Decreasing Term
A form of life insurance that provides a death benefit which declines throughout the term of the contract, reaching zero at the end of the term. Almost never sold any more because level term insurance is so much less expensive.
Delivery
The actual placing of a life insurance policy in the hands of an insured.
Examination
The medical examination of an applicant for Life Insurance. Examiner: A physician, nurse, or para-med appointed by the medical director of a life insurance company to examine applicants.
Expiry
The termination of a term life insurance policy at the end of its period of coverage. Face: The first page of a life insurance policy.
Face Amount
The amount of insurance provided by the terms of an insurance contract, usually found on the face of the policy. In a life insurance policy, the death benefit.
Fixed Benefit
A benefit, the dollar amount of which does not vary. Free Look: A period of time(usually 10, 20, or 30 days) during which a policy holder may examine a newly issued individual life insurance policy, and surrender it in exchange for a full refund of premium if not satisfied for any reason.
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.
Life Assurance
A sum assured on the life of an individual usually as a spouses benefit or dependents benefit and payable on death of the life assured. This is known as death in service benefit when provided in addition to a final salary pension
Life Insurance
An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured.
Mortality Charge
The charge for the element of pure insurance protection in a life insurance policy.
Mortality Cost
The first factor considered in life insurance premium rates. Insurers have an idea of the probability that any person will die at any particular age; this is the information shown on a mortality table.
Mortgage Insurance
A life policy covering a mortgagor from which the benefits are intended to pay off the balance due on a mortgage upon the death of the insured. The best way to accomplish this is through level term life insurance.
Nonmedical (Non-Med)
A contract of life insurance underwritten on the basis of an insured's statement of his health with no medical examination required.
Ownership
All rights, benefits and privileges under life insurance policies are controlled by their owners. Policy owners may or may not be the insured. Ownership may be assigned or transferred by written request of current owner.
Permanent Life Insurance
A term loosely applied to Life Insurance policy forms other than Group and Term, usually Cash Value Life Insurance, such as Whole Life Insurance or Universal Life.
Revocable Beneficiary
The beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary. Most policies are written with a revocable beneficiary. Rider: An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.
Stock Purchase Agreement
A formal buy-sell agreement whereby each stockholder is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obligated to sell. This agreement is usually funded with life insurance.
Stock Redemption Agreement
A formal buy-sell agreement whereby the corporation is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obliged to sell. This agreement is usually funded with life insurance.
Term Insurance
The type of life insurance that provides protection for a specified period of time. It usually has no real cash build up.
Universal Life
An interest sensitive life insurance policy that builds cash values. The premium payer has control on how the policy is structured. He has the flexibility to vanish the premiums (pay no more premiums based on assumptions that are not guaranteed) or have the premiums continue for life. It is a matter of juggling 3 variables. The assumed interest rate, the cash value and the premium payment plan. The policy is interest sensitive , and if interest rates change from the assumed interest, it will effect the other two variables. In the past, many Universal Life Policies were structured assuming a higher interest rate then was actually received, therefore, most of them have under performed. If you have a Universal Life Policy, you should have it evaluated to see if it needs to have the premiums adjusted to get it back on track. A fourth variable that has not been a factor but could be in the future, and the owner should be aware of, is the Mortality variable. Universal Life policies are usually structured assuming current mortality rates. The insurance companies reserve the right to change those rates. To my knowledge this has never been done.
Waiver of Premium
A provision of a life insurance policy which continues the coverage without further premium payments if the insured becomes totally disabled.
Whole Life Insurance
Life insurance that is kept in force for a person's whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. The variable in a whole life policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policyholder in the form of dividends.
The transfer of the ownership rights of a Life Insurance policy from one person to another.
Closed Books
Policies that are no longer sold but are still on the books of a life insurance carrier as premium-paying policies. The hardware and application maintenance costs for the systems that run the life closed books are high because they are often run on antiquated systems that have been starved of new investments based on these systems not being strategic to the direction of the carrier moving forward. Life closed books after all are caused by either discontinuing unprofitable products or as a result of acquisitions and mergers.
Collateral Assignment
Assign all or part of a life insurance policy as security for a loan. If the insured dies the creditor would receive only the amount due on the loan.
Cross Purchase
A form of business life insurance in which each party purchases life insurance on each other.
Decreasing Term
A form of life insurance that provides a death benefit which declines throughout the term of the contract, reaching zero at the end of the term. Almost never sold any more because level term insurance is so much less expensive.
Delivery
The actual placing of a life insurance policy in the hands of an insured.
Examination
The medical examination of an applicant for Life Insurance. Examiner: A physician, nurse, or para-med appointed by the medical director of a life insurance company to examine applicants.
Expiry
The termination of a term life insurance policy at the end of its period of coverage. Face: The first page of a life insurance policy.
Face Amount
The amount of insurance provided by the terms of an insurance contract, usually found on the face of the policy. In a life insurance policy, the death benefit.
Fixed Benefit
A benefit, the dollar amount of which does not vary. Free Look: A period of time(usually 10, 20, or 30 days) during which a policy holder may examine a newly issued individual life insurance policy, and surrender it in exchange for a full refund of premium if not satisfied for any reason.
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.
Life Assurance
A sum assured on the life of an individual usually as a spouses benefit or dependents benefit and payable on death of the life assured. This is known as death in service benefit when provided in addition to a final salary pension
Life Insurance
An agreement that guarantees the payment of a stated amount of monetary benefits upon the death of the insured.
Mortality Charge
The charge for the element of pure insurance protection in a life insurance policy.
Mortality Cost
The first factor considered in life insurance premium rates. Insurers have an idea of the probability that any person will die at any particular age; this is the information shown on a mortality table.
Mortgage Insurance
A life policy covering a mortgagor from which the benefits are intended to pay off the balance due on a mortgage upon the death of the insured. The best way to accomplish this is through level term life insurance.
Nonmedical (Non-Med)
A contract of life insurance underwritten on the basis of an insured's statement of his health with no medical examination required.
Ownership
All rights, benefits and privileges under life insurance policies are controlled by their owners. Policy owners may or may not be the insured. Ownership may be assigned or transferred by written request of current owner.
Permanent Life Insurance
A term loosely applied to Life Insurance policy forms other than Group and Term, usually Cash Value Life Insurance, such as Whole Life Insurance or Universal Life.
Revocable Beneficiary
The beneficiary in a life insurance policy in which the owner reserves the right to revoke or change the beneficiary. Most policies are written with a revocable beneficiary. Rider: An attachment to a policy that modifies its conditions by expanding or restricting benefits or excluding certain conditions from coverage.
Stock Purchase Agreement
A formal buy-sell agreement whereby each stockholder is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obligated to sell. This agreement is usually funded with life insurance.
Stock Redemption Agreement
A formal buy-sell agreement whereby the corporation is bound by the agreement to purchase the shares of a deceased stockholder and the heirs are obliged to sell. This agreement is usually funded with life insurance.
Term Insurance
The type of life insurance that provides protection for a specified period of time. It usually has no real cash build up.
Universal Life
An interest sensitive life insurance policy that builds cash values. The premium payer has control on how the policy is structured. He has the flexibility to vanish the premiums (pay no more premiums based on assumptions that are not guaranteed) or have the premiums continue for life. It is a matter of juggling 3 variables. The assumed interest rate, the cash value and the premium payment plan. The policy is interest sensitive , and if interest rates change from the assumed interest, it will effect the other two variables. In the past, many Universal Life Policies were structured assuming a higher interest rate then was actually received, therefore, most of them have under performed. If you have a Universal Life Policy, you should have it evaluated to see if it needs to have the premiums adjusted to get it back on track. A fourth variable that has not been a factor but could be in the future, and the owner should be aware of, is the Mortality variable. Universal Life policies are usually structured assuming current mortality rates. The insurance companies reserve the right to change those rates. To my knowledge this has never been done.
Waiver of Premium
A provision of a life insurance policy which continues the coverage without further premium payments if the insured becomes totally disabled.
Whole Life Insurance
Life insurance that is kept in force for a person's whole life as long as the scheduled premiums are maintained. All Whole Life policies build up cash values. The variable in a whole life policy is the dividend which could vary depending on how well the insurance is doing. If the company is doing well and the policies are not experiencing a higher mortality than projected, premiums are paid back to the policyholder in the form of dividends.