A method for
determining the age of the proposed insured for premium
calculations. This method uses the proposed
insured'sactual age in years.
For example, a person who is 34 years and 5
months old would be classified as a 34-year as
would a person who is 34 years and 7 months
old. (See also: Nearest
Age)
Beneficiary
The beneficiary of your insurance
policy is the person selected by you to receive
the policy benefits upon your death. You may
designate that the benefits from your policy be
allocated to multiple beneficiaries. And you may
change your beneficiary designations at any time.
Coverage Amount / Face
Amount
The amount that the
policy will pay to the insured's
beneficiaries in the event of the death of the insured.
Date of
Birth
The premiums
that insurance companies charge for life
insurance are based in large part on the age of
the proposed
insured. Some companies use the attained
age of the insured
in this calculation, while other companies use
the nearest age
of the insured.
Health
& Lifestyle Profile
The premiums that insurance
companies charge for life insurance are also based
in large part on the overall health and lifestyle
profile of the proposed insured. Typically,
individuals in good health who do not use any kind
of tobacco products or engage in any hazardous
activities will be able to obtain less expensive
coverage than individuals who are in poor health
or who use tobacco or who engage in hazardous
activities. Different insurance companies use
different criteria in determining the health
status of the proposed insured. (See also: Rate
Classification.)
Health
Status
The premiums
that insurance companies charge for life
insurance are based in large part on the health
of the proposed
insured. Typically, individuals
in good health who do not use any kind of
tobacco products will be able to obtain less
expensive coverage than individuals who are in
poor health or who use tobacco.
Different insurance companies use different
criteria in determining the health status of the
proposed insured.
Insured
An individual who is
currently covered under an existing life
insurance policy. (see also: Proposed
Insured)
Length
of Coverage
Different term life
insurance policies have different
durations. 1-, 5-, 10-, 15-, 20-, 25- and
30-year term life insurance policies are very
common. A 5-year level term policy
will have an initial 5-year period in which premiums
are level.
Mo.
Replacement Income
The amount of monthly
income that some types of policies will pay to
the insured's
beneficiaries in the event of the death of the insured.
Nearest
Age
A method for
determining the age of the proposed
insured for premium
calculations. This method takes into
account whether the proposed
insured is nearer to his/her last
birthday or his/her next birthday. For
example, a person who is 34 years and 5 months
old would be classified as a 34-year old for the
premium
calculations. In contrast, a person who is
34 years and 7 months old would be classified as
a 35-year old for the premium
calculations. (See also: Attained
Age)
Premium
A payment to a life
insurance company in exchange for a life
insurance policy.
Premium
Mode
The frequency in which premiums
are paid. Typically, total annual premium
is slightly higher when spread out over the
course of the year as opposed to being paid all
at once. For example, a policy with a $100
annual premium
may also offer a $51 semiannual premium
($102 annual cost), a $26 quarterly premium
($104 annual cost) and a $9 monthly bankdraft premium
($108 annual cost).
Proposed
Insured
An individual who is
applying for coverage under a life insurance
policy. (see also: Insured)
The state in which the insured
or proposed
insured resides. It is not
unusual for a given insurance company to be
licensed to conduct business some states and not
others. If an insurance company is
not licensed to do business in a
particular state, the company may not offer any
of its products in that state. If an
insurance company is licensed
to do business in a particular state, each of
the companies products must be individually
approved for sale in that state. It is not
unusual for a given insurance company to have
products that are approved for sale in one state
and not approved for sale in others.
Underwriting
Guidelines
Underwriting guidelines are the
health and lifestyle criteria for the proposed
insured that insurance companies use to determine
the appropriate rate classification upon which to
base the premiums for the coverage. These criteria
typically include age, gender, tobacco use,
height/weight build, family history of heart
disease or cancer, cholesterol levels, blood
pressure levels, specific health conditions,
driving record, hazardous occupation or
activities, military service, aviation, foreign
travel or residency, U.S. citizenship and felony
criminal activity. It is important that all of
these underwriting guidelines are taken into
consideration when evaluating any premiums quoted
for life insurance coverage.
