Value of a business (or individual) calculated by subtracting its total liabilities from its total assets.
No-lapse guarantee rider:
A rider sometimes offered with a universal life insurance policy that guarantees that the policy will never lapse, and the death benefit and premiums will never rise, even if the cash value of the policy falls to zero, provided that premiums are paid when due. Also know as lapse protection.
Life insurance issued without requiring the applicant to submit to a regular medical examination. In passing on the risk, the insurance company relies on the applicant’s own answers to questions regarding his or her physical condition, and on personal references and inspection reports. Because of the limited underwriting, this type of policy usually has much higher premiums than fully underwritten policies.
A life insurance policy which does not pay policy dividends and under which the insured is note entitled to share in any divisible surplus of the company. Any profits from the excess of the premium over the cost of insurance revert to stockholder.
Notice of cancellation:
A written notice from the insurance company to the insured, notifying the policyowner of cancellation of the policy.
A policy that has been issued, but not accepted and paid for by the prospective policyowner and, therefore, is returned to the company without ever having been in force.
A danger inherent in the insured’s line of work. This often results in higher premiums.
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