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Glossary of Life Insurance Terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Definitions written so you can actually understand them. Browse alphabetically, or search for a word or term by typing it into the search field located in the top navigation by the GO button (above right).
Back-Dating
Making the effective date of a life insurance policy earlier than the date of the application so that the premium rate will be lower. While legal, state law usually limits back-dating to no more than six months.
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Back-Loaded Policy
Usually associated with universal life insurance policies, a back-loaded policy is one where most of the expense charges occur when the policyholder surrenders the policy or makes cash withdrawals. See also front-loaded policy.
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Basic Death Benefit
Many life insurance policies are beefed up with addenda and riders, such as the accidental death benefit, that increase the amount of benefits paid to the beneficiary under various circumstances. The basic death benefit, on the other hand, refers to the death benefit provided under the original terms of the life insurance contract, prior to any riders or addenda being added. For policies whose death benefit remains constant regardless of circumstance, the basic death benefit is equivalent to the face amount. Compare to death benefit and policy proceeds.
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Basic Mortality Table
A mortality table prior to being modified for use in the field of life insurance. Mortality tables used by life insurance actuaries have safety margins added to them, whereas a basic mortality table does not.
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Beneficiary
This is the entity that life insurance proceeds are passed to when an insured dies. This can be a person, trust, or estate.
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Benefit
The amount of money paid when an insurance claim is approved. Also called the policy benefit.
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Benefit of Survivorship
Describes annuity payments that are made as long as the designated beneficiary is alive at the time each payment is due. The data around this assumption are used to calculate the size of the amounts due under life insurance settlement options.
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Bequest
An old legal term for a will provision leaving personal property to a specified person or organization. Also known as a "gift".
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Binding Premium Receipt
Often employed with new term life policies, a binding premium receipt is a type of initial premium receipt that makes insurance coverage effective immediately but only until the insurance company either rejects the application or approves it and issues a policy. Compare to conditional premium receipt.
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Birthday Rule
This rule applies to some coordination of benefits provisions where the benefits for dependent children are coordinated between two insurance plans. According to the birthday rule, benefits for dependent children are paid by the plan of “the parent whose birthday falls earlier in the year,” or more plainly speaking, the older parent.
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Broker
An insurance agent who sells insurance products for more than one insurance company. Although ChoiceAutoInsurance.com presents policies from a variety of different insurance carriers, we would not be considered a broker because we do not actually sell the insurance nor are we ever paid a sales commission. We are simply facilitating the buyer by providing an unbiased marketplace where he can find the right product for his needs.
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Brokerage Distribution System
A life insurance distribution system that relies on commissioned agents, or brokers, who sell the products of more than one insurance company. ChoiceAutoInsurance.com is not part of the Brokerage Distribution System in that we receive no sales commissions in exchange for the policies purchased by customers to our site.
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Bundled Insurance Product
A life insurance product in which the mortality, investment, and expense factors used to calculate premium rates and cash values are not identified separately in the policy.
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Buyer's Guide
A publication that is required in many states to be given to an applicant for life insurance prior to any purchase being made. The Buyer's Guide helps the applicant make an informed choice among policies.
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Life insurance...because
life is unpredictable. |
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