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Life insurance has a vocabulary of its own. Some insurance terms might sound familiar, but have a different meaning when are used in the world of life insurance.
The following glossary provides definitions of insurance and life insurance for you help to speak the language of life. "
There are two basic types of life insurance, Universal Life and Term Life.
Term Life
This is the simplest form of life and the most popular. It is intended to provide a large amount insurance for a period of time, but for those on a budget. Payments are fixed for the duration of the policy that can last, 5, 10, 20 or 30 years.
Universal Life
Universal life insurance is for the duration of your life and having a cash value. The premium payments are above the cost of insurance and the amount of additional payment is credited account of the cash value plus interest paid.
The amount of interest credit insurer is often linked to a financial index, it is possible to see the gains or losses from the total cash value depending on how the indices perform. The potential benefits of universal life is also a stable investment vehicle.
Beneficiary
The beneficiary of your policy is the person designated by you to receive the benefits of this policy at your death. You may designate that the benefits of your policy be allocated to beneficiaries Multiple. And you may change your beneficiary designations at any time.
Coverage Amount / Face Amount
The initial value of the policy be paid to the insured's beneficiary or beneficiaries when the insured dies while the policy is in force.
This value does not include adjustments for outstanding policy loans, withdrawals, dividends, paid additions or late payment / outstanding premium.
Health & Lifestyle Profile
The premiums that insurance companies free life insurance are also based largely on general health and lifestyle profile of the person to be insured.
Typically, healthy people who do not use any kind of tobacco products or engage in dangerous activities will be able to get coverage cheaper than those in poor health or who use tobacco or who engage hazardous activities.
Different insurance companies use different criteria to determine the health status and lifestyle of the person to be insured.
Date of Birth
The premiums that insurance companies free life insurance are based largely age of the person to be insured. Some companies use the attained age of the insured in this calculation, while other companies use the nearest age of the insured.
Insured
A person who is currently covered by an insurance existing life.
Length coverage
Different insurance policies term life have different durations.
10, 15, 20, and 30 term policy year life insurance are very frequent. A 10-year level term policy will have an initial term of 10 during which premiums are level.
Premium
This is a payment to a life insurance company in exchange for a policy of life insurance. Payment does not generally change on term life for the duration of the policy.
Premium Mode
The frequency at which premiums are paid. Typically, the total annual premium is slightly higher when payments are spread over the course of the year instead of being paid at once.
For example, a policy with an annual premium of $ 200 also may offer a premium semi $ 101 ($ 202 total annual cost), a $ 52 quarterly premium ($ 208 annual cost) and $ 18 monthly premium credit ($ 216 annual cost).
Proposed Insured
A person who applied for coverage under a life insurance policy. (See also: Insured).
Classification subscription
(See: Health & Lifestyle Profile, above).
Gender
Sex (male or female) of the insured or proposed insured.
Guidelines subscription
Underwriting guidelines are the criteria of health and lifestyle for the person to ensure that insurance companies use to determine the appropriate underwriting classification upon which to base premiums for coverage.
These criteria typically include age, sex, smoking, height and weight, build, and family history of heart disease or cancer, cholesterol, blood pressure, the specific health conditions, driving record, occupation or hazardous activities.
In addition, military service, aviation, Travel abroad or residence, citizenship of the United States and felony criminal activity. It is important that these guidelines warrants are taken into account when evaluating any premiums quoted for life insurance coverage.
Home State
The state in which the insured or proposed insured resides. It is not unusual for an insurance company determined to be authorized to conduct business in certain states and not others depending on their license.
If an insurance company is not licensed to do business in a particular state, the company may not offer its products in this state.
If an insurance company is authorized to do business in a particular state, each company's products must be individually approved for sale in this state. It is not unusual for a given insurance company to have products that are approved for sale in one state and not approved for sales in others.
About the Author:
Christina Costa, a freelance insurance writer, recommends Equotegrabber – where you can get free insurance quotes online in seconds! Visit Equotegrabber.com
Article Source: ArticlesBase.com – Life Insurance Guide and Glossary
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