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Life Insurance Dictionary

Educational Fund. One of the uses of Life Insurance. It is designed to provide money for a child's education should the breadwinner of the family die.

Emergency Fund. One of the uses of Life Insurance which provides money for the emergency expenses of a deceased's family prior to the final settlement of the estate.

Endowment Insurance. A form of Life Insurance where the face amount is payable to the insured at the end of the contract period or to a beneficiary if the insured dies before that. An example would be an insured purchasing an endowment payable at age 65: If he reaches that age, the proceeds would be payable to him. If he dies prior to that age, the proceeds would be payable to the designated beneficiary as a Life Insurance benefit.

Evidence of Insurability. The statement of information needed for the underwriting of an insurance policy.

Examination. The medical examination of an applicant for Life or Health insurance.

Examiner. A physician appointed by the medical director of a Life or Health insurer to examine applicants.

FLMI. Fellow of the Life Management Institute. See Life Office Management Association.

Face. The first page of a Life Insurance policy.

Fixed-Amount Installments. A settlement option under which fixed, periodic benefits payments are made until the principal and interest are exhausted.

Fixed Benefit. A benefit, the dollar amount of which does not vary.

Fixed-Period Installments. A settlement option under which the proceeds are guaranteed to be paid in equal installments for a specified period of time.

Flexible Premium Adjustable Life Insurance Policy. This is another term used to describe Universal Life type policies.

Flexible Premium Policy. A life insurance policy under which the policyholder may vary the amount or timing of premium payments.

Flexible Premium Variable Life. A whole life contract and a security which features flexible premium payments, nonguaranteed cash values and either a minimum guaranteed death benefit or no guaranteed death benefit. Policy values are dependent on the performance of a separate account.

Fraternal Insurance. Insurance offered a special group of people, namely, members of a lodge or a fraternal order. Such insurance may be written on an assessment basis or on a legal reserve basis.

Free Look. A period of time (usually 10, 20 or 30 days) during which a policyholder may examine a newly issued individual policy of life or health insurance, and surrender it in exchange for a full refund of premium if not satisfied for any reason.

Fully Paid Policy. A limited payment Life Insurance contract on which all required payments have been made. For instance, a 20-Pay Life policy would be fully paid after the insured has paid premiums for 20 years.

General Agent (GA). An individual appointed by a Life or Health insurer to administer its business in a given territory. He is responsible for building his own agency and service force and is compensated on a commission basis, although he possibly has some additional expense allowances.

Grace Period. A prescribed period, usually 30 to 31 days from the premium due date, during which an insurance contract is in force and the premium may be paid.
Graded Death Benefits. A provision in Life Insurance contracts for death benefits that, in the early years of the contract, are less than the face amount of the policy but that increase with the passage of time. Most commonly found in juvenile policies issued at or near age zero.
Graded Premium. A modified Life Insurance policy for which the initial premium is low, and then increases in steps over a period of time (usually five years), after which it becomes a level premium.
Group Life Insurance. Life Insurance provided for members of a group. It is most often issued to a group of employees but may be issued to any group provided it is not formed for the purpose of buying insurance. The cost is lower than for individual policies because administrative expenses per life are decreased, there are certain tax advantages, and measures taken against adverse selection are effective. See also Franchise Insurance, True Group, and the first definition of Master Policy.

Guaranteed Insurability. An option in Life and Health Insurance contracts that permits the insured to buy additional prescribed amounts of insurance at prescribed future time intervals without evidence of insurability.
Guaranteed Renewable. A contract that the insured has the right to continue in force by the timely payment of premiums for a substantial period of time as set forth in the contract. During that period of time, the insurer has no right to make any change in any provision of the contract other than a change in the premium rate for all insureds in the same class. Contrast with Noncancellable, from which Guaranteed Renewable should be distinguished.
Guideline Premium. A Universal Life insurance term used to describe the maximum premium that may be paid while still qualifying as life insurance under the federal Internal Revenue Code.