|
Definitions
Beneficiary
The person(s) named in the policy to receive the life insurance proceeds
upon the death of the insured.
Cash (Surrender)
Value
The amount that is available in cash for loans and that may be available for
withdrawals. Accessing Cash Surrender Value may reduce the death benefit and
may increase the risk of lapse. Please note that the cash value only
pertains to permanent life insurance and not term life insurance.
Cash
Value Life Insurance
Cash
Value Life Insurance is a type of insurance where premiums charged are
higher at the beginning than they would be for the same amount of term
insurance. The part of the premium that is not used for the cost of
insurance is invested by the company and builds up a cash value that may be
used in a variety of ways. You may borrow against a policy’s cash value by
taking a policy loan. If you don’t pay back the loan and the interest on
it, the amount you owe will be subtracted from the benefits when you die, or
from the cash value if you stop paying premiums and take out the remaining
cash value. You can also use your cash value to keep insurance protection
for a limited time or to buy a reduced amount without having to pay more
premiums . You also can use the cash value to increase your income in
retirement or to help pay for needs such as a child’s tuition without
canceling the policy. However, to build up this cash value, you must pay
higher premiums in the earlier years of the policy. Cash value life
insurance may be one of several types; whole life, universal life and
variable life are all types of cash value insurance.
(taken from theNational Association of Insurance Commissioners' Life
Insurance Buyers Guide)
Convertible
Term Insurance
Term insurance which
can be exchanged (converted), at the option of the policyowner and without
evidence of insurability, for a permanent insurance policy.
Face Amount
The amount stated on the policy that will be paid in case of death. It does
not include additional amounts payable under accidental death or other
special provisions or acquired through the application of policy dividends,
and can be reduced by loans or withdrawls.
Insurability
Acceptability to the company of an applicant for insurance.
Insured or
Insured Life
The person on whose life the policy is issued.
Level Premium
(Life Insurance)
Life insurance for which the premium remains the same from year to year. The
premium is normally more than the actual cost of protection during the
earlier years of the policy and less than the actual cost in the later years.
The building of a reserve is a natural result of level premiums. The
payments in the early years, together with the interest that is to be earned,
serves to balance out the underpayment of the later years.
Permanent (Life
Insurance)
Any form of life insurance except term life insurance; generally insurance
that builds up a cash value, such as whole life.
Policyowner
The person who owns a life insurance policy. This is usually the insured
person, but it may also be a relative of the insured, a partnership or a
corporation.
Premiums
Payments to the insurance company to buy a policy and to keep it in force.
Renewable
Term Insurance
Term insurance which can be renewed at the end of the term, at the option of
the policyowner and without evidence of insurability, for a limited number
of successive terms. The rates generally increase at each renewal as the age
of the insured increases.
Term
Insurance
Term Insurance covers you for a term of one or more years. It pays a death
benefit only if you die in that term. Term life insurance generally offers
the largest insurance protection for your premium dollar. It generally does
not build up cash value. You can renew most term insurance policies for one
or more terms even if your health has changed. Each time you renew the
policy for a new term, premiums may be higher. Ask what the premiums will be
if you continue to renew the policy. Also ask if you will lose the right to
renew the policy at some age. For a higher premium, some companies will give
you the right to keep the policy in force for a guaranteed period at the
same price each year. At the end of that time you may need to pass a
physical examination to continue coverage, and premiums may increase. You
may be able to trade many term insurance policies for a cash value policy
during a conversion period -- even if you are not in good health. Premiums
for the new policy will be higher than you have been paying for the term
life insurance.
(taken from theNational
Association of Insurance Commissioners' Life Insurance Buyers Guide)
Universal
Life Insurance
Universal Life Insurance is a kind of flexible policy that lets you vary
your premium payments. You can also adjust the face amount of your coverage.
Increases may require proof that you qualify for the new death benefit. The
premiums you pay (less expense charges) go into a policy account that earns
interest. Charges are deducted from the account. If your yearly premium
payment plus the interest your acount earns is less than the charges, your
account value will become lower. If it keeps dropping, eventually your
coverage will end. To prevent that, you may need to start making premium
payments, or increase your premium payments, or lower your death benefits.
Even if there is enough in your account to pay the premiums, continuing to
pay premiums yourself means that you build up more cash value.
(taken from theNational
Association of Insurance Commissioners' Life Insurance Buyers Guide)
Variable Life
Insurance
Variable Life
Insurance is a kind of insurance where the death benefits and cash values
depend on the investment performance of one or more separate accounts, which
may be invested in mutual funds or other investments allowed under the
policy. Be sure to get the prospectus from the company when buying this kind
of policy and STUDY IT CAREFULLY. You will have higher death benefits and
cash value if the underlying investments do well. Your benefits and cash
value will be lower or may disappear if the investments you chose didn’t
do as well as you expected. You may pay an extra premium for a guaranteed
death benefit.
(taken from theNational
Association of Insurance Commissioners' Life Insurance Buyers Guide)
Whole Life
Insurance
Whole
Life Insurance covers you for as long as you live if your premiums are paid.
You generally pay the same amount in premiums for as long as you live. When
you first take out the policy, premiums can be several times higher than you
would pay initially for the same amount of term insurance. But they are
smaller than the premiums you would eventually pay if you were to keep
renewing a term policy until your later years.
Some
whole life policies let you pay premiums for a shorter period such as 20
years, or until age 65. Premiums for these policies are higher since the
premium payments are made during a shorter period.
Why
do business with Term.com?
Experience
The president of Term.com has been helping his clients comfortably organize
their financial futures since 1967, so our depth of experience in the
industry is a major incentive for you to do business with us. Term.com's
staff has expert knowledge of the products being offered by the Term
Insurance Industry and carefully selects the policies that best suit our
clients' needs. We also make it our business to constantly review and update
our knowledge of the industry so that we can continue to offer our clients
the finest products.
Honesty
When looking into term life insurance, it is important to feel comfortable
about the decision you make. One of the many things you will appreciate
about Term.com is the care we take to share the truth about term insurance
with you. We believe that the more you know about your purchase, the better
you will feel about it. Although our term insurance quote system will give
you a good idea of what term life insurance is going to cost, please speak
with our excellently trained staff to complete your understanding and feel
confident about your choice. They will be happy to answer any of your
questions and assist you with the application process.
Integrity
We naturally want to earn your business, and will do everything we can to
make your experience with us a win-win situation. We never want you to be
unhappy with our service, but if you become dissatisfied for any reason,
please let us know and we'll make every effort to correct the situation. If
we are unable to make things right, you may cancel the application process.
Additionally, if you are displeased with the policy you receive from the
term life insurance company, state law says that you may return it for a
full refund for up to 20 days after receipt (varies by state). 62.42.228.7
|
