Life Terms

Accelerated Death Benefit Rider (ADB)
    Rider added to a life insurance policy to protect against financial loss in the event of terminal illness.

Accidental Death Insurance
    Insurance that provides coverage in the event of death due to accidental injuries. The insured receives a sum specified by the contract. Usually used in combo with dismemberment insurance.

Administrator
    Individual or Professional Organization appointed by the probate court to administer an estate when the owner dies without having made a will or an executor

Annuity
    A contract sold by life insurance companies that offers tax-deferred accumulation of earnings and various distribution options such as partial withdrawals, full surrender or a guaranteed income called annuitization. An annuitization option is one that pays a fixed or variable payment to the contract owner, either for a fixed number of years or for life.

Beneficiary
    An individual designated in a will to receive an inheritance, or the individual designated to receive the proceeds of an insurance policy, retirement account, trust, or other asset.

Cash Value
    The cash within a permanent life insurance policy. Cash value is the premium paid less the cost of insurance policy. Cash value is also adjusted by any investment performance within the insurance policy.

Convertible Term Insurance
    Term life insurance coverage that can be converted into permanent life insurance upon the policy's expiration. The insured generally cannot be denied permanent coverage or charged an additional premium because of health problems.

Death Benefit
    The amount payable to the designated beneficiaries upon the death of the insured.

Life Insurance
    Legal contract between an insurance company and the insured to provide protection against adverse financial consequences at the death of the owner in the form of payment to a beneficiary.

Power of Attorney
    Written document authorizing an individual to perform specific acts on behalf of the person that signed the document.

Probate
    The court-supervised process of administering a will.

Term Life Insurance
    A form of life insurance which provides coverage for a specific time period. Does not build in cash value.

Universal Life Insurance
    Permanent cash value life insurance that provides life insurance protection and a savings component with a guaranteed minimum rate of return. Insured receives additional return when the insurance company's investments make gains. Insured may adjust both your premium payments and the amount of your insurance coverage.

Informaton Provided By Insurance Information Institute
http://www.iii.org