1: Types of Individual Life Insurance

Adverse selection

Insuring of risks that are more prone to losses than the average risk

Agent/Producer

A legal representative of an insurance company

Producers include agents and brokers

Agents are the agents of the insurer

Applicant

A person applying for insurance

Attained age

The insured’s age at the time the policy is issued or renewed

Beneficiary

A person who receives the benefits of an insurance policy

Cash value

A policy’s savings element or living benefit

Death benefit

The amount paid upon the death of the insured in a life insurance policy

Deferred

Withheld or postponed until a specified time or event in the future

Endow

To have the cash value of a whole life policy reach the contractual face amount

Face amount

The amount of benefit stated in the life insurance policy

Insured

Person covered by the insurance policy; may or may not be the policyowner

Insurer

The company that issues an insurance policy

Lapse

Policy termination due to nonpayment of premium

Level premium

The premium that does not change throughout the life of a policy

Nonforfeiture values

Benefits in a life insurance policy that the policyowner cannot lose even if the policy is surrendered or lapses

Policyowner

The person entitled to exercise the rights and privileges in the policy

Policy maturity

In life policies, the time when the face value is paid out

Premium

The money paid to the insurance company for the insurance policy

Securities

Financial instruments that may trade for value (i.e. stocks, bonds, options)