Every small or mid-size business typically has a key person or persons that are responsible for producing a majority of the revenue. Service businesses are typically dependent on a key person who regularly delivers revenue from their coveted client list. Should the business lose one or more key persons because of an unexpected death, the […]
In life insurance, a person who has an unfavorable health condition, or is exposed to an above-average occupational hazard, which makes him/her a substandard risk. A risk that is substandard or below average.
In life insurance, a contract clause which provides that for certain reasons, such as misstatements on the application, the company may not contest payment of benefits (assuming premiums have been paid) and the policy has been in force during the lifetime of the insured for a certain period, usually two years after issue.
In life insurance, an agent who does not work for one insurance company, but rather represents one or more companies on an independent contractor basis.
In life insurance, the first mode premium, generally payable with the application or upon delivery of the policy.
In life insurance, a term denoting that a policy has been issued, premiums are current and coverage is in place.
In life insurance, the report of an investigator containing facts required in order for the insurer to make a proper decision on an application for new insurance or reinstatement.
In life insurance, all conditions pertaining to an individual which affect his or her health, susceptibility to injury, as well as expectancy of life. These factors are considered in determining the amount of risk. If the risk is too high, the insurer will refuse coverage.
The interest arising when one person has a reasonable expectation of benefiting from the continuance of another person’s life or of suffering a loss at his or her death. In life insurance, a person generally is considered to have an unlimited insurable interest in himself or herself. However, a person must have an insurable interest in another person at the time of application in order to insure the other’s life.
Protection, through specified monetary compensation or reimbursement for loss, provided by written contract against the happening of specified chance or unexpected events. The contractual relationship which exists when one party, for a consideration, agrees to reimburse another for loss caused by designated contingencies (e.g. death). The first party is called the insurer; the second, the insured; the contract, the insurance policy; the consideration, the premium; the property in question, the hazard or peril. The term assurance, common in England, is ordinarily considered identical to, and synonymous with insurance.
The legally binding unilateral agreement between an insurance company and a policyowner.
The total dollar amount of insurance carried by an individual.
The printed form prepared by insurers to serve as the contract between the insurers and insureds. See Insurance contract.
The individual or group covered by the contract of insurance.
The company granting the insurance.
One who dies leaving no will. Also, the condition of dying without a will.
A beneficiary that cannot be removed from an insurance policy without his or her formal (written) consent.
Irrevocable Life Insurance Trust (ILIT):
An irrevocable trust is a trust which cannot be terminated by the donor (grantor). The ILIT is used to own an insurance policy for the purpose of keeping the life insurance proceeds free of federal estate tax upon the death of the insured. Once the trust is established, it is irrevocable, which means it can never be changed, except by the courts and then only under very special circumstances.
The ILIT is both the policyowner and beneficiary. The proceeds received by an ILIT can be used to pay the death expenses, including taxes of the insured.
The age of an insurance application or an insured as used for insurance purposes. In some companies, the issue age is the age at last birthday. In others, it is the age at the nearest birthday
The date upon which the life insurance application is approved and the policy is issued by the insurer. This is not necessarily the same as the date of the policy or the date the insurance becomes effective. However, life insurance policies frequently provide suicide and incontestability clauses, measured from the issue date.
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