1099: Form filed with IRS to report individual income.
Absolute Assignment: Re-assignment of beneficiary and owner
Accelerated Death Benefit (ADB): Death benefits paid to a policy owner using strict guidelines dictated by an insurance carrier as an advance, usually restricted to those with less than 12 months left to live
Accidental Death Benefits: Additional benefits paid to policy owner for death by accident only
Account Value: The total amount of cash built up in an insurance policy (the investment portion of the policy) that is available to the policy owner before taking into account any surrender charge (also known as Accumulation Value or Cash Value)
Advisor: Company or individual who provides specialized advice, e.g., tax advisor, legal advisor, financial advisor
Assignment: Transfer of ownership – can be as a gift, for a value, or for nothing.
APS (Attending Physician’s Statement): “see Medical Records”
Benefits: Funds the insurance company pays to a policy beneficiary upon death of the insured (or insureds if a survivorship policy)
Beneficiary: The individual or company named on a policy to which the insurance company will forward benefits upon death of insured
Bid (Appraisal): Offer to purchase a policy
BOLI: Bank Owned Life Insurance
Broker: Company or individual assembling data on behalf of the policy owner for the purpose of selling a life insurance policy
Care Giver: Company or individual providing health related personal care services
Carrier: Insurance company
Case Worker: Company or individual assembling data on behalf of a policy owner for purpose of selling a life insurance policy (also see Broker)
Cash Surrender Value: The Account Value built up in an insurance policy (the investment portion of the policy) that is available to the policy owner after taking into account the surrender charge (if any)
COLI or Corporate Owned Life Insurance: A policy that a company has taken out on the life of an employee. The policy could be a Key Man Policy (see below) or insure the life of someone at any level of the company. The company is both the owner and beneficiary of a COLI policy. Also known as Janitor’s Insurance.
Confidentiality: The practice and maintenance of absolute anonymity of the insured and all data and information related to the insured to those without express written release or permission of the insured
Contestable or Contestability Period: The time from a life insurance policy issue date in which the insurance company has the legal right to cancel a life insurance policy - usually 2 years but can very by company and/or product. The insurance company can go back and investigate an applicant’s request for insurance based on information provided on the application. After the contestability period, a policy can only be canceled for lack of payment or fraud.
Contestable Policy: A life insurance policy which has been in-force shorter than the contestable period
Contract: A life insurance policy document that is a binding legal agreement between an policy owner and the life insurance company that describes all of the terms of the life insurance policy that is entered into when a policy is purchased
Death Benefit: Total amount payable to policy beneficiaries upon the death of the insured
Dependent: An individual who is dependent on another individual financially, according to the governing rules set by the IRS
Disability Waiver of Premiums: A life insurance policy rider that stipulates if the insured becomes disabled, premium payments are no longer required to keep the policy in-force
Employer: The company that employs the insured
Escrow: An account, controlled by a disinterested third-party, that is used to hold funds in a life settlement transaction after a sale has been completed, but before the insurance company has acknowledged an ownership and beneficiary change
Escrow Agent: A disinterested third party agent, usually bonded, designated by both parties to direct funds through various stages of the life settlement process
Federal Regulations: Federal government rulings and laws
FEGLI: Federal Employees Group Life Insurance
Face Value: Total amount payable upon death of the insured (or insureds in a second-to-die policy), also know as the Death Benefit
Investor or Funder: Company that purchases a life insurance policy in the secondary market, pays all future premiums, and collects the death benefit as the beneficiary of the policy
Graded Death Benefit: A policy where the full face value will not be paid until graded time has passed, according to policy terms (often 2 to 3 years)
Group Policy: Life insurance that provides protection for a group of persons, usually employees of a company or members of an organization under one master contract
HIPAA: An acronym for the Health Insurance Portability and Accountability Act of 1996 (public law 104-191) that governs the treatment of medical files by companies, among other things
Insured: The individual whose life is covered in a life insurance policy
Irrevocable Beneficiary: A beneficiary in a life insurance policy whose designation cannot be changed without his or her consent.
IRS: Internal Revenue Service
Key Man Policy (or Key Person Policy): A life insurance policy designed to protect a business against financial loss caused by the death of a vital member of the company, usually individuals possessing special managerial or technical skill or expertise (generally, a large policy)
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