Life Insurance

Definition

• An insurance policy where an insurer agrees to pay out benefits, as per the terms of the contract, to a beneficiary, or multiple beneficiaries, upon the insured person's death. Some life insurance policies will pay out in the event of a terminal or critical illness.

Notes
CanEquity offers life insurance.

Synonyms
life coverage, life insurance policy, personal insurance

Related Terms and Acronyms

• Accidental Death and Dismemberment Insurance — Definition,
  • Insurance coverage for death or dismemberment (the loss of a body part).
• Accidental Death Benefit (ADB) — Acronym, Very Important,
  • An additional benefit that pays an additional sum to a beneficiary if the cause of death is deemed to be accidental.
  ➥ A life insurance policy rider.
• Assignee — Definition,
  • In the insurance industry, an assignee is someone who is assigned ownership of another person's insurance policy.
  • A person appointed to acquire (take) an item, such as a property.
• Assignor — Definition,
• Attained Age — Definition,
  • The current age of an insured individual.
• Beneficiary — Definition,
  • An individual or entity chosen to receive benefits from a will, trust, deed or insurance policy.
• Casualty Insurance — Definition,
  • Insurance that covers losses and liability from injuries to others and/or damage to the property of others.
• Co-insurance — Definition,
  • Insurance where both the insurer and the insured share costs in a set ratio when an insured event occurs.
• Convertible Life Insurance — Definition,
  • A type of term life insurance policy that has the option to be converted into a permanent life insurance policy such as whole or universal life insurance.
• Credit Life Insurance — Definition,
  • Life insurance that repays the insured's debts upon their death. The death benefit decreases as the debt is paid off.
• Creditor Insurance — Definition,
  • Insurance that repays debt if the borrower cannot.
• Critical Illness Insurance (CII) — Acronym, Very Important,
  • Insurance that covers individuals in the event of a critical or catastrophic illness.
  ➥ A health insurance policy rider.
• Death Benefit (DB) — Acronym, Very Important,
  • A payment or series of payments made to the beneficiaries of a life insurance policy.
  ➥ An amount paid to a beneficiary in a life linsurance policy.
• Declining Life Insurance — Definition,
  • Life insurance with a decreasing death benefit, often used to insure mortgage debt.
• Decreasing Term Life Insurance — Definition,
  • A Term life insurance policy with benefits that decrease each year as the policyholder ages.
• Disability Insurance (DI) — Acronym, Important,
  • Insurance that covers individuals who develop a condition that hinders their ability to work.
• Entity-Purchase Agreement — Definition,
  • A plan used for businesses with multiple owners where insurance policies are taken out for each owner in the amount of their ownership stake.
• Estate — Definition,
  • The ownership interest of an individual in real property.
  • The total sum of all the real property and personal property owned by an individual at time of death.
• Estate Planning — Definition,
  • The process of determining how assets will be dispersed after an individual's death, ideally in the most tax-efficient way possible.
• Face Value — Definition,
  • The value of an asset, or the size of an insurance benefit.
• Family Income Rider — Definition,
  • A recurring or lump sum life insurance benefit that matches the policyholder's income.
• Fixed Premium — Definition,
  • Insurance or annuity premiums that stay level for a specific period of time.
• Future Purchase Option — Definition,
  • A provision that gives the policyholder the option to purchase additional insurance coverage at a future date.
• Group Life Insurance — Definition,
  • Life insurance offered to a large number of people belonging to an organization, usually as part of a benefit package.
• Health Insurance (HI) — Acronym,
  • Insurance that covers the costs of medical expenses for insured persons.
• Health Maintenance Organization (HMO) — Acronym, Important,
  • A healthcare plan where insured people receive reasonably priced health insurance through an organization with firm guidelines on the scope of care.
• Human Life Approach — Definition,
  • A method of estimating what the probable lifetime financial impact a life insurance policyholder's death would have on his or her beneficiaries.
• Insurable Interest — Definition,
  • Something of sufficient worth and benefit that an individual or entity would have reason to insure against its lost.
• Insurance (insur) — Abbreviation,
  • An arrangement where one party provides financial protection to another party for specific damages or losses.
• Insurance Claim — Definition,
  • An application for benefits made by an insurance policyholder after an insured event.
• Insurance Policy — Definition,
  • A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
• Irrevocable Beneficiary — Definition,
  • A life insurance or segregated fund beneficiary whose benefit cannot be revoked or modified in any way without his or her consent.
• Issue Age — Definition,
  • The policyholder's age when the policy was first issued, to the nearest year.
• Lapse Ratio — Definition,
  • A ratio that compares how many life insurance policies have lapsed from the beginning year to the end.
• Lapsed Policy — Definition,
  • A policy that is no long in effect due to missed payments, inaction or its term ending.
• Level-Premium Insurance — Definition,
  • Insurance where the premiums the policyholder pays are guaranteed to remain the same for an agreed upon period of time.
• Life Annuity — Definition,
  • An annuity that will continue to make payments until the death of the annuitant.
• Life Insurance Trust (LIT) — Acronym,
  • A legal entity that is made the beneficiary of a life insurance policy, often arranged to evade taxation.
• Living Benefits — Definition,
  • The option for a life insurance policyholder to receive a portion of their death benefit in advance of their death.
• Long Term Care Insurance (LTC) — Acronym, Important,
  • Insurance that covers health care costs for individuals with chronic or disabling conditions.
• Mortgage Life Insurance — Definition, Very Important,
  • Insurance that covers the costs of paying off a mortgage if the insured dies or becomes disabled.
• Paid-up Additional Insurance — Definition,
  • The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
• Permanent Life Insurance — Definition,
  • A class of life insurance policies, which include both universal and whole life insurance, with guaranteed death benefits at the end of their terms.
• Policy — Definition,
  • A set of rules or guidelines.
  • An insurance contract.
• Policy Loan — Definition,
  • A loan where a life insurance policyholder's death benefit is used as collateral.
• Private Annuity — Definition,
  • An arrangement where one party agrees to transfer ownership of an asset to another party (usually a beneficiary) in exchange for lifetime payments.
• Reinstatement — Definition,
  • Resuming an insurance policy that has either lapsed or been terminated.
• Revocable Beneficiary — Definition,
  • A beneficiary whose benefit can be modified without his or her consent.
• Second-To-Die Insurance — Definition,
  • Life insurance that only pays a death benefit when both spouses have died, commonly used in estate planning.
• Segregated Fund — Definition,
  • Investment vehicles that feature both maturity and death guarantees. Segregated funds share similarities with mutual funds but are categorized as insurance products.
• Self Insurance — Definition,
  • Setting aside money or assets for a potential future loss.
• Single Interest Insurance — Definition,
  • Insurance that covers a single party when more than one party has a stake in a property.
• Single-Premium Life Insurance — Definition,
  • Life insurance where all premiums are paid up front in a single lump sum payment.
• Spin-Life — Definition,
  • A financial industry that specializes in buying life insurance policies from individuals or convincing individuals to take out new life insurance policies with an investor as a beneficiary.
• Sprinkling Provision — Definition,
  • A provision that gives a trustee the authority to distribute life insurance death benefits as he or she sees fit, and to those who need the money the most.
• Straight Life Annuity — Definition,
  • An annuity that stops all payments upon the annuitant's death.
• Stranger Originated Life Insurance (STOLI) — Acronym,
  • A life insurance policy purchased by someone without any insurable interests with the insured person.
  ➥ Illegal in many Canadian provinces.
• Substandard Health Annuity — Definition,
  • An annuity with increased income payments for people with shorter life expectancies due to medical conditions.
• Substandard Insurance — Definition,
  • Insurance for those who are ineligible for standard insurance due to higher risk profiles.
• Surrender Charge — Definition,
  • A charge levied when a life insurance policyholder cancels his or her policy.
• Surrender Rights — Definition,
  • The contractual right for a life insurance or annuity policyholder to cancel his or her policy.
• Survivorship — Definition,
  • The right of a person to secure ownership by reason of his/her outliving someone with whom s/he shared undivided interest in the land.
• Term Life Insurance — Definition,
  • Life insurance that provides coverage for a set period of time, often from five to forty years.
• Transferable Insurance Policy — Definition,
  • A life insurance policy that can be sold to another party through a viatical settlement.
• Travel Insurance — Definition, Very Important,
  • Insurance that covers a number of events that can occur when an individual is travelling out of the province or country.
• Universal Life Insurance — Definition,
  • A form of life insurance that offers flexible investment options and tax efficiency for estate management.
• Vanishing Premium Policy — Definition,
  • A life insurance policy where policy dividends are used to pay the policy's premiums.
• Variable Death Benefit — Definition,
  • A life insurance death benefit that differs depending on how well the insurance company's investment portfolio fares.
• Variable Life Insurance (VLI) — Acronym,
  • Life insurance that provides the policyholder the option to place some of his or her premiums into the insurer's investment portfolio, providing beneficiaries with a variable death benefit.
• Voluntary Life Insurance — Definition,
  • Life insurance offered as part of an employee benefit package where the employee agrees to pay the insurance premiums.
• Whole Life Insurance — Definition,
  • Permanent life insurance with level premiums for the policyholder's entire lifetime.