Vocabulary for types of insurance policies

Question 1

compromise

Answer 1

to agree to give up something you want if the other side, which has different opinions from yours, gives up something it wants.

Question 2

characteristics

Answer 2

A distinguishing feature or attribute of an item, person, phenomenon, etc., usually divided into three categories: (1) physical, (2) functional, and (3) operational.

Question 3

fluctuate

Answer 3

to change continually; shift back and forth; vary irregularly:

Question 4

accessible

Answer 4

Able to be reached or entered.

Capable of being used or seen

Question 5

Cash Value

Answer 5

The amount available in cash upon cancellation of an insurance policy, usually a whole life policy, before it becomes payable upon death or maturity. also called cash surrender value or surrender value.

Question 6

Cash Surrender

Answer 6

The amount available in cash upon cancellation of an insurance policy, usually a whole life policy, before it becomes payable upon death or maturity. also called cash surrender value or surrender value.

Question 7

Surrender Value

Answer 7

The amount available in cash upon cancellation of an insurance policy, usually a whole life policy, before it becomes payable upon death or maturity. also called cash surrender value or surrender value.

Question 8

allotted

Answer 8

to distribute by or as if by lot

Question 9

General Account

Answer 9

The general account is where an insurer deposits premiums from policies it underwrites and from which it funds day-to-day operations of the business. The general account does not dedicate collateral to a specific policy, and instead treats all funds in aggregate.

Question 10

continuous

Answer 10

marked by uninterrupted extension in space, time, or sequence

Question 11

net

Answer 11

Amount remaining after all deductions from, or adjustments to, a gross figure have been made.

Question 12

Actuarial Life Table

Answer 12

life table is a table or spreadsheet that shows the probability of a person at a certain age dying before his or her next birthday. These statistics calculate the remaining life expectancy for people at different ages and the probability of surviving a particular year of age. Because men and women have differing mortality rates, an actuarial life table is computed separately for men and women. An actuarial life table is also called mortality table, life table or actuarial table.

Question 13

actuary

Answer 13

a person who calculates insurance and annuity premiums, reserves, and dividends

Question 14

maturity

Answer 14

Time to completion of a project or program, or the period for which a contractual agreement, financial instrument, guaranty, insurance policy, loan, or offer is issued or is in force.

Question 15

insurer

Answer 15

One that insures.

Question 16

face amount

Answer 16

1. Banking: (1) Amount written on a check the sum its payee is entitled to draw. (2) Principal sum advanced under a loan or mortgage agreement.
2. Insurance: Sum of money for which an insurance cover is obtained, usually shown on the top sheet (face) of the policy. In life insurance, face amount is the sum paid on the policy’s maturity date, on the death of the insured, or (if the policy terms permit) on his or her total disability.

Question 17

Face Amount

Answer 17

the amount of money payable under an insurance policy at the time of a loss.

Question 18

gross

Answer 18

.Aggregate amount prior to any deduction or discount.
To earn or bring in (an overall total) exclusive of deductions (as for taxes or expenses)
consisting of an overall total exclusive of deductions

Question 19

exclusive

Answer 19

excluding or not admitting other things.

Question 20

separate account

Answer 20

A separate account is a privately managed investment account owned by an investor seeking to manage a pool of individual assets. Separate accounts are typically opened through a brokerage or financial advisor. They may also be held at a bank or opened with an insurance company
Insurance companies have investment products such as variable annuities that can be kept separate from an individual’s general insurance investments. In the context of variable annuities, these are payments made to an insurance company for the purpose of investing in securities. Variable annuities usually have fixed payouts that begin at a specified future date making them good investment options for retirement savings.

Question 21

general account

Answer 21

is where an insurer deposits premiums from policies it underwrites and from which it funds day-to-day operations of the business. The general account does not dedicate collateral to a specific policy, and instead treats all funds in aggregate.
The account used to invest the income generated from premiums. Typically, this is an investment portfolio made up of safe, guaranteed investments.

Question 22

Premium pays for three things on a whole life

Answer 22

The annual renewable term, guaranteed interest rate and expenses

Question 23

hedge

Answer 23

Investment made by taking a trading position in a futures or options market to minimize the impact of adverse changes in interest rates or in the prices of commodities or securitie.

Question 24

sub account

Answer 24

Segregated account maintained under a safekeeping agreement with a bank. Funds in a sub account can only be used according to the terms of the agreement, and may not be used to setoff the accountholder’s any loan with the bank.

Question 25

segregated account

Answer 25

An account in which a customer’s funds are held separate from the funds of the brokerage firm.

Question 26

segregated

Answer 26

unintegrated, divided, separated

Question 27

guarantee

Answer 27

a formal promise or assurance (typically in writing) that certain conditions will be fulfilled, especially that a product will be repaired or replaced if not of a specified quality and durability.

Question 28

interest rate

Answer 28

is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR).

Question 29

segregated

Answer 29

set apart from each other; isolated or divided.

Question 30

hybrid

Answer 30

of mixed character; composed of mixed parts.

the offspring of two plants or animals of different species or varieties, such as a mule (a hybrid of a donkey and a horse).

Question 31

opportunity

Answer 31

a set of circumstances that makes it possible to do something.

Question 32

alluring

Answer 32

powerfully and mysteriously attractive or fascinating; seductive.

Question 33

current assumptions

Answer 33

Basis for calculating life insurance premiums and benefits using current interest and mortality rates, rather than historic rates. Current assumptions are critical to interest-sensitive products such as Universal Life. When interest rates are high, benefits projections (such as cash values) are high. When interest rates are low, these projections are not as alluring. The thesis of current-assumption life insurance products is that policyowner earnings should reflect current market conditions

Question 34

suited

Answer 34

a set of circumstances that makes it possible to do something.

Question 35

overhead

Answer 35

Cost or expense.

Question 36

prevailing rates

Answer 36

is the average current interest rate in the economy, sometimes called the current market rate. Different types of loans often have various ________ ___..

Question 37

Flexible Premium

Answer 37

A policy wherein the insured can modify the amount and scheduling of premium payments.

Question 38

Flexible Premium Option Zero

Answer 38

Policy owner can skip premium by using the cash value to pay for the premiums.

Question 39

Flexible premium option Mimimum 
Minimum Premium (Pricing Style)

Answer 39

Least amount of premium payment to keep the policy inforce.
Policies are designed to perform optimally in defined death benefit plan designs, where the policy buyer specifies the policy face/death benefit amount and the duration of coverage, and the insurer determines the premium necessary to provide that death benefit for the specified period (e.g., for family protection, business continuity financing, estate/transfer tax financing, etc.). Minimum premium policies are defined as such by a cost structure comprised of both A) cost of insurance (COI) charges and/or fixed administration expenses (FAEs) that are lower than representative averages and B) premium loads and/or cash-value-based “wrap fees” that are higher than representative averages, (where representative average COI Charges, FAEs, premium loads and cash-value-based “wrap fees” are determined by Veralytic benchmarks).

Question 40

benchmark

Answer 40

Something that serves as a standard by which others may be measured or judged. A bar, barometer, criterion, gold standard, grade, mark, measure, metric, par, standard, touchstone, yardstick
To study (something, such as a competitor's product or business practices) in order to improve the performance of one's own company