Life Insurance Dictionary
- AD&D. See Accidental Death and Dismemberment Insurance.
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- Absolute Beneficiary. See Irrevocable Beneficiary.
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- Accidental Death Benefit. An extra benefit which generally equals the face of the contract or principal sum, payable in addition to other benefits in the event of death as the result of an accident. See also Double Indemnity and Multiple Indemnity.
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- Accumulation Value. A term used in Universal Life policies to describe the total of all premiums paid and interest credited to the account before deductions for any expenses, loans or surrenders.
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- Adjustable Life. A form of life insurance which allows changes on the policy face amount, the amount of premium, period of protection, and the length of the premium payment period. See also Flexible Premium Adjustable Life Insurance Policy.
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- Agent, General. See General Agent.
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- American College. An educational institution within the Life Insurance business. It confers the Chartered Life Underwriter designation and is concerned with continuing agents' training and with research and publication in areas related to the Life Insurance business. It also sponsors specialty Life Insurance courses and offers a college degree in financial services. It was formerly known as the American College of Life Underwriters (ACLU).
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- Amount At Risk. The difference between the face amount of a Whole Life Insurance contract and the cash value which it has built up. The net amount at risk declines throughout the life of the contract, while the policy reserve increases along with the cash value. It is the amount the insurer would have to draw from its own funds rather than the policy reserve were the contract to become a death claim.
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- Assignment. The transfer of the ownership rights of a Life Insurance policy from one person to another. The term also refers to the document that effects the transfer.
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- Association Group Insurance. Technically, group insurance issued to an association rather than to an employer or a union.
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- Attained Age. The age an insured has reached on a given date.
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- Automatic Premium Loan. A provision in a Life policy authorizing the insurer to use the loan value to pay any premiums still due at the end of the grace period.
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- Aviation Hazard. The extra hazard of death or injury resulting from participation in aeronautics, usually as other than a fare-paying passenger in licensed aircraft. This generally requires an extra premium rating or waiver of certain benefits or coverage.
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- Backdating. A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age at issue lower than it actually was in order to get a lower premium. State laws often limit to six months the time to which policies can be backdated.
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- Beneficiary. A person who may become eligible to receive or is receiving benefits under an insurance policy other than a participant. See also Irrevocable Beneficiary, Revocable Beneficiary, Primary Beneficiary, Secondary Beneficiary, Tertiary Beneficiary, and Contingent Beneficiary.
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- Benefits of Survivorship. See Survivorship Benefits.
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- Binding Receipt. See Conditional Binding Receipt.
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- Business Insurance. Policies written for business purposes, such as key employee, sole proprietorship, partnership, and corporation.
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- Buy-Sell Agreement. (1) An agreement among part-owners of a business which says that under stated conditions, i.e., disability or death, the person withdrawing from the business or his heirs are legally obligated to sell their interest to the remaining part-owners, and the remaining part-owners are legally obligated to buy at a price fixed in the agreement; (2) a similar agreement between an owner or part-owner of a business and a nonowner, such as a key employee.
