Get Affordable Life Insurance!


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Get Affordable

Life Insurance!

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Here is a list of general terms you can expect to encounter when buying life insurance.

Adjuster
An employee of an insurance company whose job it is to assess property/casualty losses and settle the claims of policyholders.

Agent
Insurance is sold either by a person who is self-employed, represents several insurers and is paid on commission, or by someone who only represents one insurance company and is either salaried or paid a commission. The former person is known as an independent agent, while the latter is called an exclusive or captive agent, or direct writer.

Apportionment
When two or more insurers cover the same loss, and they divide that loss proportionately.

Appraisal
An evaluation of a property’s insurable value, or amount of loss.

Beneficiary
The individual or legal entity the owner of an insurance policy names to get the policy benefit if the insured--against event should happen.

Binder
The temporary coverage the owner of an insurance policy gets until permanent coverage is approved.

Cash Value
A life insurance term referring to the amount, before adjustments, that the owner of a permanent policy is entitled to if the policy does not stay in force until the insured’s death.

Complaint Ratio
A process used by some state insurance departments to keep track of consumer complaints against insurance companies. Generally, this ratio reflects the number of complaints upheld against an insurer, as a percentage of the premiums it has collected.

Contestable Period
The time during which an insurance company has the right to back out of issuing a policy if it finds an applicant misrepresented himself or herself on the application.

Deductible
The amount of money the policyholder must pay before the insurer covers the rest.

Endorsement
Otherwise known as a rider, this is a written attachment to an insurance policy that makes an alternation in the policy’s coverage, terms, or conditions.

Fraud
When a policyholder intentionally deceives or conceals information in order to get an insurance company to pay a claim that would otherwise be unpaid.

Grace Period
With regard to insurance, this reflects the amount of time you have after the premium due to date to pay the premium without penalty.

Indemnify
Provide monetary compensation for losses.

Lapse
When an insurance company terminates a policy because a renewal premium has not been paid by the end of the grace period.

Mortality Rate
The rate at which death occurs for members of a specific age and gender group. Life insurance premiums are based, in part, on this rate.

Risk Class
A group that an insurer places a customer in that reflects his risk of filing a claim against the company. Consumers in the preferred risk class will get the lowest premiums.

Premium
The price of a policy. Usually, this is charged once a year, or once every six months.

Rate Regulation
The way in which states keep track of rates changes made by insurance companies. This is done either through prior approval or open competition models.

Reinstatement
The way in which an insurance company puts back into force a policy that has lapsed due to such things as failure to pay premiums or reduced paid-up coverage.

Settlement Options
The choices an owner or beneficiary of a life insurance policy gets about how the insurer is going to pay out when the policy owner doesn’t get the benefit in one lump sum.

Severity
What insurers refer to as the size of a loss.

Twisting
An illegal insurance sales tactic in which an agent misrepresents a product in order to get the consumer to buy it.

Underinsurance
When a policyholder has not bought enough insurance to cover a loss.

Underwriting
The method by which insurers assess risk to determine if you should get coverage and if so, what your premiums should be.

Void
A policy free of legal effect due to the fact that the policyholder has misrepresented himself or herself in the insurance buying process.

Waiting Period
With regard to health insurance, the period of time that must pass after policy issuance before benefits are payable.