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Guide to Life Insurance Terms of the insurance contract. Policy Year A one-year period starting on the day and the month the policy was issued. The first policy year starts on the date of issue, and ends on the day before the policy's first anniversary date. Premium The payment a policy holder is required to make to an insurance company to purchase insurance coverage and to keep the policy in force. Rated Policy A policy issued with an additional premium to cover the extra risk involved if an insured has impaired health, a hazardous occupation or hobby. Reinstatement The restoring of a lapsed or surrendered policy to full force and effect. Renewable Increasable Convertible Term Insurance This contract combines the options of increasing the sum assured, converting the policy and renewing the contract. Reviewable Term Level term assurance with an option to renew the contract at the end of the term, without the need for further medical evidence. Rider A provision added to a policy that provides additional benefits. Settlement Option The manner in which the insured or beneficiary may choose to have the policy proceeds paid. Suicide Clause A policy provision which reduces or eliminates the amount to be paid if the insured dies from suicide. Surrender To voluntarily terminate or cancel a policy for its cash value. Term Life Insurance This type of policy runs for a specified time period. Underwriting The process of evaluating applicants for insurance and classifying them fairly, so the appropriate premium rate may be charged Waiver of Premium A provision added to a policy that will waive the premium payments required by an insured during the total disability of the insured. You may freely reprint « Previous Page « » Discuss it » Continue Reading »
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