Saving Age:
The act of backdating a policy to a date closer to the applicant’s last birthday in order to lower the premium.  In backdating, premiums are payable as of the policy date.

Second-to-die life insurance:
A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured.  Also known as survivorship life insurance or joint survivor life insurance, this type of policy is typically used to pay estate taxes upon the death of the second insured.  It is also often used by parents of special needs children to ensure the child will be provided for after the death of both parents.

Section 1035 exchange:
Under IRS Section 1035, a policyowner can exchange one life insurance policy with another and transfer the accumulate cash value from the old policy to the new one without incurring any taxes on the cash accumulation.  The transfer must occur between two like policies and must be transferred directly from the old insurance company to the new one.

Single premium:
The lump-sum premium payment required to cover the entire cost of a life insurance policy.

Split dollar insurance:
An arrangement between two people (often an employer and an employee) where life insurance is written on the life of one who also names the beneficiary of the net death benefits (death benefits less cash value), and the other is assigned the cash value (or equivalent amount of death benefits), with both sharing the premium payments (usually the noninsured paying a portion equal to the increase in cash value each year and the insured paying the balance of the annual premium).  Upon termination of the plan while the insured is living, the cash value generally would go to the noninsured to compensate for the portion of premiums paid.  Upon death of the insured, the amount of proceeds equal to the cah value generally would go tho the noninusred, and the balance of proceeds would go to the insured’s beneficiary.  This method permits a financially able person (say, a favored employee) to obtain substantial amounts of needed life insurance with a very low premium outlay on his or her part.

Standard Risk:
A person who, according to the insurer’s underwriting standard, is entitled to insurance protection without extra rating or special restrictions.

Stock insurance company:
An insurance company that is owned and controlled by a group of stockholders whose investment in the company provides the sfety margin necessary in the issuance of guaranteed, fixed premium , non-participating policies.  The stockholders share in the profits and losses of the comapny.

Stock purchase agreement:
See Buy-Sell agreement.

Stock redemption agreement:
A buy-sell agreement where the business assumes the obligations of purchasing (retiring or redeeming) a deceased owner’s interest in the business.

Substandard risk:
A person who is considered an under-average or impaired insurance risk because of his or her physical condition, family or personal history of disease. occupation, residence in unheatlhy climate, or dangerous habits

Suicide clause:
Most policies provide that if the insured commits suicide withijn a specified period, usually two years after the date of issue, the company’s liability will be limited to a return of premiums paid.

Super Preferred risk:
A person whose physical condition, occupation, mode of living, and other characteristics indicate a prospect for longevity which is superior to that of the preferred risk of the same age.  Sometimes called preferred best.

Surrender:
The return for cancellation of a policy to the insurer by the policyowner in exchange for the policy’s full cash value or other equivalent nonforfeiture values.

Survivorship life insurance:
A life insurance contract which covers two lives and provides for the payment of the proceeds upon the death of the second insured.  Also known as joint survivor life insurance or second to die life insurance, this type of policy is typically used to pay estate taxes upon the death of the second insured.  It is also often used by parents of special needs children to ensure the child will be provided for after the death of both parents.

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