Insurance Policy Glossary
- Cash Value – The sum of money the insurance
company will pay to the policyholder of a Universal Life Insurance
policy in the event his or her policy is voluntarily terminated
before its maturity if fully funded or before the insured event
occurs. This cash value is the savings component of a Universal
Life Insurance policy.
- Beneficiary – A person or entity named in a
Universal Life Insurance policy as the inheritor of asset when the
policyholder dies. Named beneficiaries can include a single or
multiple persons or entities.
- Claim – A formal request to an insurance
company for a death benefit payment based on the terms of the
Universal Life Insurance policy. Insurance claims are reviewed by
the company for their validity and then paid out to the beneficiary
- Tax-deferred – Describes investment earnings
that accumulate tax free in a Universal Life Insurance policy,
based on applicable tax regulations, until the policyholder
withdraws them. Investment earnings can grow tax-deferred, and the
policyholder can benefit separately by waiting until retirement to
withdraw these earning when being taxed at a lower rate.
- Deductible – The amount the policyholder may
be required to pay out-of-pocket for expenses before the insurance
company will cover the remaining costs of a claim made against a
Universal Insurance policy.
- Exclusions – Specific situations or reasons
defined in a Universal Insurance policy that are grounds for
denying payment of the cash value and/or death benefit. Common
exclusions often include suicide, acts of war, military service,
and hazardous or extreme activities.
- Limits – The limits in a Universal Insurance
policy are the limits of insurance coverage, cash value, or death
benefit that is provided by the life insurance policy and paid to
the beneficiary in the event his or her policy is voluntarily
terminated before its maturity if fully funded or before the
insured event occurs.
- Liability – A claim alleging that one's
negligence or inappropriate action resulted in personal or property
damage to another party, or a condition or situation of being bound
by law to do something that is enforceable in the
- Premium – Payment to an insurance company to
buy a Universal Life Insurance policy and/or to keep it in force.
Premiums can include a single premium, a defined period of fixed
premium payments, or a flexible premium plan requiring a slightly
larger initial payment and offering flexible future premium payment
- Rider (Endorsement) – A provision in a
Universal Life Insurance policy allowing for amendments to its
terms and/or coverage, which generally provide a desired benefit to
the policyholder and usually result in an additional charge or
Universal Life Insurance Directory