A
Accelerated Death Benefit: An option in a life insurance policy that allows a specified percentage of the death benefit to be paid prior to the insured's death, if his/her life expectancy is less than 12 months.
Accidental Death Benefit: The benefit from a life insurance policy that is paid when the insured has an accident related death.
Annuity: A contract issued by an insurance company where guaranteed or variable periodic payments begin at a specified time.
Application: A written form provided by an insurance company that the insured, his agent and sometimes a medical examiner complete in order for the person to start a policy contract with the insurance company. It provides information about the physical condition, occupation and avocation of the proposed insured. It becomes a part of the information an insurance company considers when deciding whether or not, and on what terms and conditions, a policy should be issued.
B
Beneficiary: The individuals or entities designated to receive the death benefits from a life insurance policy or annuity contract.
C
Cost of Insurance: The amount deducted monthly from the accumulation value to cover the insurance protection provided by the policy. The amount deducted is calculated based on a number of factors such as age, premium class and net amount at risk.
D
Death Benefit: The amount paid to the beneficiary upon the death of the insured.
E
Expense Charge: A monthly charge the insured pays the insurance company based on a number of factors such as age.
F
Face Amount: The amount paid in the event of the death of the insured or at the policy's maturity, whichever occurs first. The face amount does not include additional amounts which may be payable (like in the case of an accidental death).
G
Guaranteed Interest: Each policy has a minimum guaranteed interest rate. Interest earned over and above the guaranteed interest rate is the excess interest. The total amount of interest on a policy or contract is the sum of the guaranteed plus the excess interest amounts.
H
I
Insured: The individual whose life is covered by an insurance policy.
Issue Age: The insured's age at the time the coverage starts, either last or nearest birthday.
J
K
L
Loan: A sum granted by a life insurance company to the owner of a life insurance policy, secured by the policy's cash surrender value.
M
Maturity Date: The end of the policy term.
N
O
Other Insured Rider: An option that allows up to 5 other family members to be insured. Generally an additional premium is charged..
P
Policy: The contract or written agreement between the insurer and the policy owner. The policy, together with the application, endorsements and attached papers, constitutes the entire contract of insurance. A policy is usually life insurance; a contract is usually an annuity.
Policy owner: An individual or entity that owns an insurance policy. The owner can be either the insured, the beneficiary or someone else. The policy owner is in charge of the premium and is the only one allowed to make changes to the policy.
Premium: Payments to the insurance company to purchase a life insurance policy and to keep it in force.
Premium Allocation: The percentages of each premium payment that are invested in the different options. The allocation for each option must be a whole percentage and all allocations must total 100%.
Premium Mode: The frequency with which the payments are made by the policy owner. Premium modes can be annual,semi-annual ,quarterly or monthly.
Primary Beneficiary: The person or entity that receives the policy proceeds in the event of the insured's death.
Q
R
Rider: Optional coverage that complements the life insurance policy or annuity contract. Riders may increase the premiums. Some examples of riders are: accelerated death benefit, accidental death benefit, automatic increase rider, children's term rider, other insured rider, primary insured rider, waiver of monthly deduction, and more.
S
Surrender: The termination of the policy by its owner in exchange for the policy's cash surrender value.
Surrender Charge: The charges deducted when the owner surrenders a life insurance policy.
Surrender Cash Value: The cash surrender value less any loans or surrender charges..
T
U
V
W
Waiver of Monthly Deduction: An optional rider that waives the monthly cost of insurance charges for the length of a disability.
X
Y
Z
Policies issued by OM Financial Life Insurance Company, Baltimore MD/OM Financial Life Insurance Company of New York, Purchase NY.
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Life Insurance Terms
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