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The Basics of Life Insurance

                     
Regardless of your age, everyone needs life insurance Protection.  For young people the need for life insurance may not be for current obligations, but to plan and be prepared for the future.

Preferred and Not Preferred Risk
A high ratio of bad cholesterol to good cholesterol:  Ratios over 6:1 usually do not qualify as preferred.

Private pilots in perfect health may still not qualify for standard life rates, and may be rated by many life insurance companies.

A new immigrant in the United States without a permanent visa usually will not qualify for preferred rate with many life insurance companies.

Depending on driving record an applicant may not qualify for preferred rates with many life insurance companies.

Please consult a qualified life insurance advisor to determine your needs.
 
Terms

Accidental Death Insurance – insurance that provides coverage in the event of death due accidental injuries.

Assignment – actions taken which affect ownership

Assignee – the party to whom an assignment has been granted

Beneficiary – an individual designated in a will to receive an inheritance or the individual designated to receive the proceeds of an insurance policy

Cash Surrender Value – the amount that is available to the owner if a life insurance policy is surrendered any time before the surrender date.

Claim – written request by an insured to cover an incurred loss

Collateral – temporary assignment of the monetary value of a life insurance policy as security for a loan

Critical illness Rider – a rider added to a life insurance policy to protect the insured against financial loss in the event of terminal illness.

Death Benefit – the amount payable to the beneficiary upon death of the insured

Endowment – pays the sum assured upon the death of the life insured during the policy term or on survival to the end of the policy term

Extended Term Insurance – a provision that provides the option of continuing the insurance for a particular insured amount as per the policy condition as term insurance

Grace Period – offers the insured additional days after the due date of the premium to pay the premium

Life Assured – individual whose life is covered under a life insurance policy

Life Expectancy – amount of years a person is expected to live using mortality tables

Maturity Date – date on which an endowment insurance policy’s face amount will be paid to the policy owner if the life insured is still living

Non-forfeiture benefit – benefit which prevents a life insurance policy that has built up a cash value from lapsing due to non-payment of premiums by policy owner

Policy Bonuses this takes place in participating policies where the company gives the policyholder a share in the profits of the company in the form of bonuses

Policy Term – a period of coverage provided by an insurance policy

Premium – a specified amount of money that the insurer receives in exchange for its promise to provide the policy proceeds when a specific loss occurs

Rider – additional benefits that an individual can add onto a policy

Surrender or Cash Value – the amount payable to the policyholder in the event they decide to discontinue their policy

Surrender Charge – fee charged to a policyholder when a life insurance policy or annuity is surrendered for cash value

Term insurance covers a person against death for a limited time.  You pay for the coverage and at the end of the term the policy expires.  If no claims are made against the term policy, no benefits are received.

Whole Life insurance is permanent and does not expire.  It provides similar coverage to term insurance, but also provides and a means of investment.  A portion of the premium goes toward insuring the policyholder’s life and the other portion go toward and investment account.