Term Life Insurance Glossary
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Back-dating
Making the effective date of a term life insurance policy earlier than the date of the application so that the premium rate will be lower. State law usually limits back-dating to not more than six months.
Also called dating back.
Basic Death Benefit
The death benefit according to the terms of the original, basic contract of a term life insurance policy. The basic death benefit does not include the benefit for any supplementary riders, such as an accidental death benefit (ADB) rider. For policies in which the death benefit remains constant, the basic death benefit is equivalent to the face amount.
Compare to death benefit and policy proceeds.
Beneficiary
The person or party the owner of a term life insurance policy names to receive the policy benefit if the event insured against occurs.
See also contingent beneficiary, irrevocable beneficiary, primary beneficiary and revocable beneficiary.
Benefit
The amount of money paid when a term life insurance claim is approved.
Also called the policy benefit.
Benefit Period
The time during which periodic income benefits will be paid under a disability income insurance policy.
Binding Premium Receipt
A type of premium receipt that provides a potential insured with temporary term life insurance coverage from the time the applicant receives the receipt until the insurer declines the application or issues and delivers a policy.
Compare to conditional premium receipt.
Broker
(1) A commissioned sales agent who is under contract to and sells the insurance products of more than one insurance company. (2) For a career agent, to submit insurance applications to companies other than the agent’s own company.
Bundled Insurance Product
A life insurance product in which the mortality, investment, and expense factors used to calculate premium rates and cash values are not identified separately in the policy. Traditional whole life insurance is an example of a bundled insurance product.
Business Insurance
Life insurance that is intended to serve the term life insurance needs of a business rather than the needs of an individual.
Business-Continuation Insurance
A term life insurance plan that enables the owner(s) of a business to provide for the continued operation of the business if the owner or a key person dies.
See key-person term life insurance.
Buyer’s Guide
In the United States, a publication that many states require insurance companies to give to an applicant for term life insurance. The Buyer’s Guide helps the applicant make an informed choice among policies.
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