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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).
Eligibility Requirements
An individual life insurance policy is tailored, in price and provisions, to whatever conditions are found to be true of the applying policyholder. With group life insurance, however, the price and provisions are pre-established. For this reason they come with eligibility requirements. In order to participate in a group life insurance plan, a person must meet the conditions set out in the eligibility requirements.
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Endorsement
See rider.
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Endorsement Method
This is one method of changing the name of the beneficiary on a life insurance policy. With the endorsement method, the policyholder requests the change by either letter or telephone, and the insurance carrier prepares and endorsement reflecting this change which it then sends to the policyholder. Some carriers require that the policyholder send the policy in to the carrier along with the request for the change. Contrast with recording method.
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Endowment Insurance
A type of life insurance that provides a benefit regardless of whether the policyholder dies if (a) death occurs during a specified number of years, or (b) at the end of the specified number of years, the policyholder is alive.
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Entire Contract Provision
A standard contract provision applied here in the case of a life insurance policy and stating that the policy, along with an attached copy of the application for the policy, constitutes the entire agreement between the insurer and the policyholder. No rider or endorsement can later be added to this policy without revising the policy itself.
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Equity-based Insurance Product
A life insurance product with a fluctuating cash value and benefit level based on the performance of its underlying investment instruments. Policyholders accept the risk of sharing in the insurance carrier’s investment losses in exchange for the prospect of sharing in greater gains. See also variable life insurance, and variable universal life insurance.
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Equivalent Single Payment
This is where one payment is deemed to replace several other payments, because it equals the value of the other payments combined.
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Equivocal Suicide
Meaning “the same as suicide,” equivocal suicide comes into effect when there is doubt about whether the deceased intended to die as a result of an apparently self-destructive act.
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Estate Planning
A program that functions in cooperation with a life insurance policy. Its goals are not only to provide for the policyholder’s dependents upon the death, but also to conserve, as much as possible, the personal assets that the policyholder wants to bequeath to heirs. Estate planning usually involves accountants, lawyers, and the trust officers of banks, as well as representatives of the insurance company.
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Excess Interest
This is the amount of interest above the guaranteed amount that an insurance carrier pays on a settlement option when interest rates are high.
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Exchange Program
This is a program that allows a policyholder with little or no evidence of insurability to replace an old policy with a new policy with the same carrier without the delays or higher premiums that would normally accompany an application this lacking in strength.
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Exclusion Rider
See impairment rider.
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Exclusions
These are specific conditions or circumstances under which a life insurance policy will not provide benefits. Suicide, for example, is a universally excluded from coverage.
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Exclusive Agents
Career agents who are under contract with a single insurance carrier and who are not permitted to sell the products of other carriers. Also known as captive agents.
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Exculpatory Statute
Legislation in community-property states that protects both the insurance carrier and the policyholder’s wishes by allowing the carrier to pay the proceeds of a life insurance policy in accordance with the terms of that policy without fear of double liability.
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Exoneration Statutes
Statutes that excuse insurance carriers from liability if a party claims rights to any policy proceeds which the insurer has already paid to a third party in good faith and without knowledge of any conflicting claim.
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Experimental Underwriting
The practice of accepting, in limited number and under considerable caution and oversight, specific types of risk that are considered uninsurable according to the insurer's normal underwriting guidelines.
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Express Authority
The authority policyholders explicitly confers on their life insurance agents.
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Evidence of Insurability
This is proof that you are an acceptable risk. You have to meet the standards of the insurer regarding age, health, occupation and such other standards as the insurer feels necessary to be eligible for coverage.
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Life insurance...because
life is unpredictable. |
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