A Universal Life Policy
is designed to meet your needs like no other policy can!
With a Universal Life Policy,
Accumulate tax-deferred savings
Vary your premiums
Vary your benefit
Suspend payments periodically
Universal Life allows you the flexibility to make changes as your life
circumstances change, without having to change your life insurance
Lock in your insurability now, while you are healthy, and start
protecting your loved ones while you build cash for your future.
Ask us about a personal Life Insurance Review. We can help you determine
the amount of coverage you need and show you how simple it is to
Term Life Insurance
Term Insurance covers you for a specified period of time, such as ten
twenty or thirty years. Once the term is expired, you must renew it,
often at much higher rates. The policy only pays a death benefit if you
die in that period of time. Term Insurance often has specific rules
about when and how you can renew the policy.
Term Insurance normally NEVER builds cash value.
However, Term Insurance has the advantage of normally providing
the highest death benefit for the lowest premium.
Ask us about which Life Insurance policy is right for you and your loved
ones. We will be happy to explain the differences in simple, easy to
Life Insurance Glossary
Accelerated Benefits Rider
A life insurance rider that allows for the early payment of some
portion of the policy's face amount should the insured suffer from a
terminal illness or injury.
Accidental Death and Dismemberment
Insurance providing payment if the insured's death results from an
accident or if the insured accidentally severs a limb above the wrist or
ankle joints or totally and irreversibly loses his or her eyesight.
Accidental Death Benefit Rider
A life insurance policy rider providing for payment of an additional
benefit related to the face amount of the base policy when death occurs
by accidental means.
Annually Renewable Term
A form of renewable term insurance that provides coverage for one year
and allows the policy owner to renew his or her coverage each year,
without evidence of insurability. Also called Yearly Renewable Term (YRT).
The accumulated value of the annuity is converted into a guaranteed
stream of income.
Form supplied by the insurance company, usually filled in by the agent
and medical examiner (if applicable) on the basis of information
received from the applicant. It is signed by the applicant and is part
of the insurance policy if it is issued. It gives information to the
home office underwriting department so it may consider whether an
insurance policy will be issued and at what premium rate.
The practice of making a policy effective at an earlier date than the
Person to whom the proceeds of a life policy are payable when the
insured dies. The various types of beneficiaries are: primary
beneficiaries (those first entitled to proceeds); secondary
beneficiaries (those entitled to proceeds if no primary beneficiary is
living when the insured dies); and tertiary beneficiaries (those
entitled to proceeds if no primary or secondary beneficiaries are alive
when the insured dies).
Best's Insurance Report
A guide, published by A.M. Best, Inc., that rates insurers' financial
integrity and managerial and operational strengths.
Business Continuation Plans
Arrangements between business owners that provide that the shares owned
by any one of them who dies shall be sold to and purchased by the other
co-owners or by the business.
Agreement that a deceased business owner's interest will be sold and
purchased at a predetermined price or at a price according to a
The equity amount or "savings" accumulation in a whole life policy.
Failure of the insured to disclose to the company a fact material to the
acceptance of the risk at the time application is made.
Given to policy owners when they pay a premium at time of application.
Such receipts bind the insurance company if the risk is approved as
applied for, subject to any other conditions stated on the receipt.
Person or persons named to receive proceeds in case the original
beneficiary is not alive. Also referred to as secondary or tertiary
Allows the policy owner, before an original insurance policy expires, to
elect to have a new policy issued that will continue the insurance
coverage. Conversion is only based on attained age (premiums based on
the age attained at time of conversion).
Contract that may be converted to a permanent form of insurance without
An agreement that provides that upon a business owner's death, surviving
owners will purchase the deceased's interest, often with funds from life
Decreasing Term Insurance
Term life insurance on which the face value slowly decreases in
scheduled steps from the date the policy comes into force to the date
the policy expires, while the premium remains level. The intervals
between decreases are usually monthly or annually.
Disability Income Rider
A type of health insurance coverage, it provides for the payment of
regular, periodic income should the insured become disabled from illness
A provision in a life insurance policy, subject to specified conditions
and exclusions, under the terms of which double the face amount of the
policy is payable if the death of the insured is the result of an
accident. In general, the conditions are that the insured's death occurs
prior to a specified age and results from bodily injury effected solely
through external, violent and accidental means independently and
exclusively of all other cause, within 60 or 90 days after such injury.
Evidence of Insurability
Any statement or proof of a person's physical condition, occupation,
etc., affecting acceptance of the applicant for insurance.
Specified hazards listed in a policy for which benefits will not be
Commonly used to refer to the principal sum involved in the contract.
The actual amount payable may be decreased by loans or increased by
additional benefits payable under specified conditions or stated in a
Provision required in most states whereby policy owners have either 10
or 20 days to examine their new policies at no obligation.
Period of time after the due date of a premium during which the policy
remains in force without penalty.
Guaranteed Insurability (Guaranteed Issue)
Arrangement, usually provided by rider, whereby additional insurance may
be purchased at various times without evidence of insurability.
Established by each state to support insurers and protect consumers in
the case of insurer insolvency, guaranty associations are funded by
insurers through assessments.
Provides that, for certain reasons such as misstatements on the
application, the company may void a life policy after it has been in
force during the insured's lifetime, usually one or two years after
Increasing Term Insurance
Term life insurance in which the death benefit increases periodically
over the policy's term. Usually purchased as a cost of living rider to a
whole life policy.
Independent Agency System
A system for marketing, selling and distributing insurance in which
independent brokers are not affiliated with any one insurer but
represent any number of insurers.
Report of an investigator providing facts required for a proper decision
on applications for new insurance and reinstatements.
All conditions pertaining to individuals that affect their health,
susceptibility to injury and life expectancy; an individual's risk
Requirement of insurance contracts that loss must be sustained by the
applicant upon the death of another and it must be sufficient to warrant
Social device for minimizing risk of uncertainty regarding loss by
spreading the risk over a large enough number of similar exposures to
predict the individual chance of loss.
Party that provides insurance coverage, typically through a contract of
Key Employee Insurance
Protection of a business against financial loss caused by the death or
disablement of a vital member of the company, usually individuals
possessing special managerial or technical skill or expertise. Also
called key executive insurance.
Termination of a policy upon the policy owner's failure to pay the
premium within the grace period.
Level Term Insurance
Term coverage on which the face value and premiums remain unchanged from
the date the policy comes into force to the date the policy expires.
Usually conducted by a licensed physician; the medical report is part of
the application, becomes part of the policy contract and is attached to
the policy. A "non-medical" is a short-form medical report filled out by
the agent. Various company rules, such as amount of insurance applied
for or already in force; applicant's age, sex, past physical history;
data revealed by inspection report, etc., determine whether the
examination will be "medical" or "non-medical."
A document completed by a physician or another approved examiner and
submitted to an insurer to supply medical evidence of insurability (or
lack of insurability).
Act of making, issuing, circulating or causing to be issued or
circulated an estimate, an illustration, a circular or a statement of
any kind that does not represent the correct policy terms, dividends or
share of surplus or the name or title for any policy or class of
policies that does not in fact reflect its true nature.
The relative incidence of death within a given group.
A basic use for life insurance, so-called because many family heads
purchase insurance for specifically paying off any mortgage balance
outstanding at their death. The insurance generally is made payable to a
family beneficiary instead of to the mortgage holder.
Issued on a regular basis without requiring a regular medical
examination. In passing on the risk, the company relies on the
applicant's answers to questions regarding his or her physical condition
and on personal references or inspection reports.
Offer and Acceptance
The offer may be made by the applicant by signing the application,
paying the first premium and, if necessary, submitting to physical
examination. Policy issuance, as applied for, constitutes acceptance by
the company. Or the offer may be made by the company when no premium
payment is submitted with the application. Premium payment on the
offered policy then constitutes acceptance by the applicant.
Other Insured Rider
A term rider covering a family member other than the insured that is
attached to the base policy covering the insured.
A risk whose physical condition, occupation, mode of living and other
characteristics indicate a prospect for longevity superior to that of
the average longevity of unimpaired lives of the same age. (See
The periodic payment required to keep an insurance policy in force.
In life insurance, the beneficiary designated by the insured as the
first to receive policy benefits at the insured death.
Net amount of money payable by the company at the insured's death or at
Rate-Up in Age
System of rating substandard risks that involves assuming the insured to
be older than he or she really is and charging a correspondingly higher
Returning part of the commission or giving anything else of value to the
insured as an inducement to buy the policy. It is illegal and cause for
license revocation in most states. In some states, it is an offense by
both the agent and the person receiving the rebate.
An option in a renewable term life policy under which the policy owner
is guaranteed, at the end of the term, to be able to renew his or her
coverage without evidence of insurability, at a premium rate specified
in the policy.
Putting a lapsed policy back in force by producing satisfactory evidence
of insurability and paying any past-due premiums required.
Some term policies provide that they may be renewed on the same plan for
one or more years without medical examination but with rates based on
the insured's attained age.
Act of replacing one life insurance policy with another; may be done
legally under certain conditions. (See twisting.)
Statements made by applicants on their applications for insurance that
they represent as being substantially true to the best of their
knowledge and belief but that are not warranted as exact in every
Strictly speaking, a rider adds something to a policy. However, the term
is used loosely to refer to any supplemental agreement attached to and
made a part of the policy, whether the policy's conditions are expanded
and additional coverages added, or a coverage or condition is waived.
The method a home office underwriter uses to choose applicants that the
insurance company will accept. The underwriter must determine whether
risks are standard, substandard or preferred and set the premium rates
Salary Continuation Plan
An arrangement whereby an income, usually related to an employee's
salary, is continued upon his or her death; often paid to the employee's
An alternate beneficiary designated to receive payment, usually in the
event the original beneficiary predeceases the insured.
Section 1035 Exchanges
Certain life insurance policy or annuity exchanges that are considered,
according to Internal Revenue Code section 1035, to be tax-free.
Person who, according to a company's underwriting standards, is entitled
to insurance protection without extra rating or special restrictions.
Stock Redemption Plan
An agreement under which a closely held corporation purchases a deceased
Person who is considered an under-average or impaired insurance risk
because of physical condition, family or personal history of disease,
occupation, residence in unhealthy climate or dangerous habits.
Most life insurance policies provide that if the insured commits suicide
within a specified period, usually two years, after the issue date, the
company's liability will be limited to a return of premiums paid.
Protection during limited number of years; expiring without value if the
insured survives the stated period, which is usually
10, 20 or 30 years, because such periods usually cover the
needs for temporary protection.
Term of Policy
Period for which the policy runs. In life insurance, this is to the end
of the term period for term insurance.
In life insurance, a beneficiary designated as third in line to receive
the proceeds or benefits if the primary and secondary beneficiaries do
not survive the insured.
A policy owner who is not the prospective insured.
Practice of inducing a policy owner in one company to lapse, forfeit or
surrender a life insurance policy for the purpose of taking out a policy
in another company. Generally classified as a misdemeanor, subject to
fine, revocation of license and sometimes imprisonment.
Company receiving premiums and accepting responsibility for fulfilling
the policy contract. Also, company employee who decides whether the
company should assume a particular risk; is not an agent who sells the
Uniform Simultaneous Death Act
Model law that states when an insured and beneficiary die at the same
time, it is presumed that the insured survived the beneficiary.
A distinguishing characteristic of a life insurance contract in that it
is only the insurance company that pledges anything. The policy owner
does not even promise to pay premiums; therefore, it is really a
one-sided contract favoring the policy owner.
One not acceptable for insurance due to excessive risk.
Flexible premium, two-part contract containing renewable term insurance
and a cash value account that generally earns interest at a higher rate
than a traditional policy. The interest rate varies. Premiums are
deposited in the cash value accounts after the company deducts its fee
and a monthly cost for the term coverage.
Waiver of Premium
Rider or provision is not included in most life insurance policies.
Only offered as an option to elect.
Yearly Renewable Term (YRT)
(See Annually Renewable Term)
Please Note: The information contained in this Web
site is provided solely as a source of general information and
resource. It is a not a statement of contract and coverage may not
apply in all areas or circumstances. For a complete description of
coverages, always read the insurance policy, including all endorsements.