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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).
Death Benefit
The amount of money paid or due to be paid when a life insurance policyholder dies. This amount does not include adjustments for outstanding policy loans, dividends, paid-up additions, or late premium payments. See also basic death benefit.
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Death Claim
A request for payment under the terms of a life insurance policy.
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Death Taxes
Taxes levied on the property of a person who died. Federal death taxes are called "Estate Taxes." State death taxes (if any) go by various names, including "inheritance tax."
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Decreasing Term Insurance
A type of term life insurance in which the amount of coverage decreases during the term of coverage.
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Deferred Annuity
An annuity contract under which premiums are accumulated at interest but the annuity payment period is postponed for one or more periods. It can also refer to a series of payments in which the first payment is postponed for one ore more periods. See also deferred life annuity and group deferred annuity.
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Deferred Life Annuity
A deferred annuity that provides a series of payments, each of which is made only if a designated person is alive.
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Deferred Premiums
Life insurance premiums that are due after a policy's statement date but before the next policy anniversary.
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Dependent Life Insurance
A form of group life insurance made available to group members, on an optional and contributory basis, to cover the spouse, children, or other dependents of the group member. It is usually sold in small amounts which are intended to pay funeral expenses.
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Deposit Term Insurance
This type of term life insurance requires a substantially larger premium payment in the first year then resets at a lower level for the remainder of the term.
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Direct Response Distribution System
A distribution system that relies on advertisements, telephone solicitations, and mailings to generate life insurance sales rather than life insurance agents. Although not formally named as such, ChoiceAutoInsurance.com could be seen as a new, electronic tributary to the direct response distribution system.
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Direct Response Marketing
A method of selling life insurance products directly to the consumer, without the use of insurance agents. ChoiceAutoInsurance.com could be seen as an offshoot direct response marketer, even though we are not hired by a given insurance carrier, do not actually sell insurance product and do not receive a sales commission in exchange for our service.
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Discontinuity Index
This test, required by the NAIC Model Life Insurance Disclosure Regulation, is designed to reveal instances in which policy illustrations have been manipulated so that they present an unrealistic progression of premiums, dividends, and benefits.
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Distribution Expenses
Expenses involved in making life insurance products available to the general public. These expenses include agent compensation, group sales representatives' salaries, and postal, printing, and telecommunications expenses for those companies that use direct response marketing. ChoiceAutoInsurance.com is able to dramatically cut the cost of life insurance products in no small part due to our being able to deliver educated, ready-to-buy customers to the carriers without the carriers having to spend a dime.
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Distribution System
The network of organizations and individuals that performs all the marketing activities required to convey a product from an insurer to its customers. ChoiceAutoInsurance.com is not part of the life insurance industry’s standard distribution system, but could be thought of almost as an alternative to it.
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Dividend
A periodic payment made by a business to a stockholder. Dividends paid in cash are called cash dividends. Dividends paid in the form of additional shares of stock are called stock dividends.
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Dividend Expenses
This calculation, appearing on the policyholders dividend statement, represents the amount of money it costs the insurance carrier to maintain the policy for the current year.
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Dividend Interest Rate
This is used to calculate policyholder dividends, and represents the actual rate being earned on the carriers investment at that moment in time.
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Dividend Options
Policyholders are generally given several alternatives for how their receive their share of the returns on their policy’s investments. These would be referred to as the dividend options. See accumulation at interest option, additional term insurance option, automatic dividend option, cash payment option, dividend accumulations , enhancement type policy, paid-up additions, and premium reduction option.
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Divisible Surplus
The portion of an insurance carrier’s earnings that is available for distribution to the policyholders through dividend payments.
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Doctrine of Reasonable Expectations
This doctrine is used by courts on occasion to rule in favor of policyholders and beneficiaries in the case of disputes where the language of a life insurance policy may not literally or legally support a set of expectations the policyholders or beneficiaries held if the court finds that their expectations were reasonable.
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Domestic Corporation
This is a company incorporated under the laws of a U.S. state. Compare to alien corporation, and foreign corporation.
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Double Indemnity
This is a death benefit coverage that pays an additional benefit equal to the basic death benefit of the policy if the insured's death is accidental. See also accidental death benefit (ADB) rider.
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Life insurance...because
life is unpredictable. |
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