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Guide to Life Insurance Terms may be paid without penalty. The policy remains in force throughout the period. Guaranteed Insurability An option that permits the policyholder to buy additional stated amounts of life insurance at certain times in the future, without having to provide new evidence of insurability. Illustration A document used in life insurance sales presentations showing year-by-year numbers indicating how a policy will work. Increasing Term Insurance Under this option, the benefit payable on death increases and is particularly useful to avoid the sum assured being eroded by inflation. Insured The person whose life is covered by a life insurance policy. Lapse The discontinuation of insurance without cash value when the required premium is not paid. Level Term Life Insurance In this form a policy will pay out a fixed sum on death during the term. Loan Value The amount which can be borrowed by the policy holder from the company using the value of the policy as collateral. Mode of Premium Payment The frequency of premium payments during the policy year. Premium payments can usually be made on annual, quarterly, or monthly basis. Mortality Table A statistical table showing the death rate for each age. Nonforfeiture Options A provision in the policy that allows the policy holder to choose how the cash value of the policy will be used if the policy is surrendered or lapses due to non-payment of premium. Ownership All rights, benefits, and privileges under a policy controlled by the insured. Paid-Up Insurance A life insurance policy where all premiums have already been paid, with no further premium payment due. Policy The printed document issued to the policy holder by the company stating the terms « Previous Page « » Discuss it » Continue Reading »
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