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- Absolute assignment: The transfer of
ownership rights
- Accelerated death benefits: Pre-death
benefits paid by an insurance carrier
- Assignable: Permits transfer to another
party
- Assignee: The entity (person or company)
to whom a policy is assigned
- Beneficiary: The entity named to receive
the death benefits from an insurance policy
- Broker: An intermediary in the sale
of existing life insurance policies by the insured to an
investor-buyer
- Cash out: To cancel a life insurance
policy in exchange for its net cash surrender value
- Contestability period: The two year
period in which an insurance contract can be canceled for
cause by an insurer
- Convert: Transfer from group to individual
ownership, or from term to permanent insurance
- Closing: The time when money is exchanged
for assignment of the ownership of a life insurance policy,
similar to “closing” of escrow on real estate;
transfer of ownership
- Conversion cap: The maximum face amount
allowed for a group policy converted to an individual policy
- Death benefit: The amount paid to a
beneficiary; also known as face value or face amount of
the policy
- Disability waiver: A rider that excuses
premium payments when an insured has been disabled for longer
than six months
- Escrow: A temporary holding account
for funds
- Evidence of insurability: Information
about the health, occupation, lifestyle, habits, income
and other private information which an insurance company
may use to determine whether to insure the life of a person
- Fractionalized shares: Percentages of
a life insurance policy for sale; co-ownership.
- Funding sources: Direct buyers of life
insurance death benefits; also known as funding firms or
capitalization firms
- Grace period: Time period for an insured
to change his/her mind about the sale of his/her policy
benefits
- Guaranteed insurability option: The right
to increase the death benefit without evidence of insurability
- Incontestability clause: Prohibits an
insurer from canceling a life or disability contract, except
for failure to receive premium payments
- Insurable interest: The beneficiary
suffers loss when an insured dies
- Lapse: Ceases to be in force
- Legal competency: Of sound mind
- Life settlement: Payment made in exchange
for beneficiary rights to a life insurance policy of an
insured person who is over 65 years of age and not terminally
ill.
- Maturity: The date when death benefits
are payable, due to the demise of the insured
- Ordinary life: Permanent, whole life
(cash value) insurance
- Policy loan: Funds borrowed from the
cash value of a life insurance company
- Policy holder: The owner of an insurance
policy
- Premium: Payment required to keep a
policy in force
- Rating: Extra charge for an insured
who represents greater than standard insurance risk
- Reinstate: To put a policy back in force
after it has lapsed
- Rescind: Cancel
- Rider: A provision in an insurance contract
which changes the benefits
- Senior settlements, or senior life settlements:
Also called “life settlements”; payments made
in exchange for the beneficiary rights to a life insurance
policy of an insured person who is over 65 years of age
and not terminally ill.
- Term insurance: Life insurance without
cash value; premiums increase upon renewal
- Tracking: The process of monitoring
the insured until death
- Transfer for value: Money is exchanged
for the benefits of the life insurance policy
- Underwriting: The process of evaluating
financial or medical risk
- Universal life: A cash value policy
which combines term insurance and an investment
- Variable life: Similar to universal
life insurance except that the policy-holder determines
where the savings portion is invested
- Viatical settlement: Payment made in
exchange for beneficiary rights to a life insurance policy
of an insured person with a terminal illness.
- Viaticate: To sell a life insurance
policy for a viatical settlement
- Viaticum: A viatical settlement
- Viator: The insured who contracts to
sell a life insurance policy
- Waive: To excuse, as premiums or tax
penalties
- Waiver of premium: Premium payments
are excused by an insurer when an insured has been totally
disabled for six months
- Whole life: Cash value, permanent life
insurance, usually with level premiums payable for the term
of the policy (for example, to age 65 or for life).
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