All the insurance & finance terminology you need to know.
An individual who sells, services, or negotiates insurance policies on behalf of a company or independently.
An individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust or other contract.
The period of time the life insurance covers the policy-holder.
The payout to the beneficiary of like insurance policy when the insured person dies.
EVIDENCE OF INSURABILITY
A statement of the policy holder’s physical health and other insurance, such as assets and income, which helps the insurance company decide if the applicant is eligible for insurance, the amount of risk they pose, and what premium the company will charge.
FINANCIAL NEEDS ANALYSIS
Analysis that reviews the policy holder’s current financial goals, with the objective of helping to determine how much insurance they might require.
The legal document issued to a policy holder by a life insurance company that outlines the terms of the insurance.
A form of protection from risk that guarantees payment upon the death of the policyholder.
The step in the life insurance underwriting process in which a company assesses and classifies an applicant’s risk of mortality.
The strategy of buying term life insurance policies with different term lengths and different coverage amounts at the same time. Since the policies are set to expire at different times, you only pay for the amount of coverage you need throughout your different life stages.
TERM LIFE INSURANCE
A life insurance policy for a specific time period that stipulates the insurance company must delivery a tax-free payment if the insured person dies within that timeframe. Many term policies only cover periods of 5,10,or 20 years but can be renewed, usually for a higher cost, at the end of the policy.
The process used by insurance companies to determine how much life insurance a person can qualify for and at what price, based upon risk factors.