Accidental Death Benefit (ADB):  A rider to the certificate that provides for the payment of a specified amount of accidental death benefit if the death of the insured is from accidental means.

 

Account Value:  The account value of the Universal Life contract is the sum of net premiums and interest credited, less premium expense charges (if applicable), monthly deductions, and any partial withdrawals.

 

Applicant:

 

Base Insurance Amount:  The specified face amount of the certificate at death, before adjustments for paid-up additional insurance, certificate loans, and other adjustments.

 

Beneficiary:

 

Cash Surrender Value:  The cash surrender value is equal to the account value, less the amount needed to cover unpaid monthly deductions and any surrender charges and loan indebtedness.

 

Cost of Insurance:  A monthly charge per $1,000 of coverage based on the amount at risk, duration of coverage, and the insured's age and risk class.

 

Death Benefit:  The amount of money payable upon the death of the insured.  Total death benefit may include paid-up additional insurance and the amount of any dividends on deposit to accumulate with interest and less any loan balance.

 

Death Benefit Options:  Option 1 [Level] - The death benefit is the face amount of the contract.  Option 2 [Increasing] - The death benefit is the face amount, plus the account value.

 

Death Benefit Guarantee/No Lapse Guarantee:  When specified premiums are paid and requirements met, the contract will remain in force and the death benefit will not be reduced, even if the net account value is less than zero.

Guaranteed Insurability Option:  An elective rider to the certificate that guarantees the primary insured the right to purchase additional insurance at specific times without evidence of insurability.

 

Increase in Cash Value:  The current cash value less the prior year's cash value.

 

Loan:  Loans include cash loans sent directly to the certificate owner and automatic premium loans used to pay premiums.  A loan from the insurer to the certificate owner is secured by the certificate.  If the insured dies while a loan is outstanding, the amount of the loan balance and any accrued interest are deducted from the total death benefit.  Loans are also deducted from the total cash value when a certificate is surrendered.

 

Paid-Up Additional Insurance:  Additional insurance, purchased with dividends, which has a death benefit and a cash value, but does not require payment of additional premiums.

 

Partial Withdrawal:  The owner may withdraw limited amounts of cash from the account value, subject to applicable surrender charges and withdrawal guidelines as defined in the policy. 

 

Premiums:  The amount of money charged for the insurance certificate.  Premiums may be payable monthly (EFT), quarterly, semi-annually, or annually, as elected by the certificate owner.

 

Scheduled Premium Mode:  The amount of periodic premium payments that you choose to pay, monthly, quarterly, semi-annual or annual.

 

Surrender Charge:  A fee that is applied at the time a contract is surrendered or partial withdrawals are made by the owner. 

 

Term Insurance Rider:  This elective rider provides for an amount of insurance attached to a permanent life certificate which pays an additional term insurance benefit if the insured dies during a specified time, as defined in the rider. 

 

Universal Life: A permanent life insurance contract characterized by flexible premiums, unbundled pricing, and an adjustable face amount.  The net account value of the contract depends upon the amount of premium you paid, Loans you may have taken, and the interest and dividends earned.  The insurance will lapse if the net account value becomes negative and is unable to cover the contract's monthly deduction.

 

Waiver of Premium Rider:  This elective rider may be added to the contract to provide for the payment of premiums (premiums waived) during a period in which the primary insured has a qualifying total disability.

 

Important:  This glossary provides only a general description of certificate terms and provision.  It does not modify the terms and provisions of your specific certificate.  Please refer to your certificate contract for exact definitions and details.

Glossary of Insurance Terminology

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