Life Glossary Set B-C

Front 1

Basic Illustration

Back 1

A ledger or proposal used in the sale of a life insurance policy that shows both guaranteed and nonguaranteed elements.

Front 2

Beneficiary

Back 2

The person who receives the proceeds from the policy when the insured dies.

Front 3

Birthday Rule

Back 3

The method of determining primary coverage for a dependent child, under which the plan of the parent whose birthday occurs first in the calendar year is designated as primary.

Front 4

Broker

Back 4

An individual who represents an insured in the process of purchasing and negotiating a contract of insurance.

Front 5

Buy-Sell Agreement

Back 5

A legal contract that determines what will be done with a business in the event that an owner dies or becomes disabled.

Front 6

Buyer's Guide

Back 6

A booklet that describes insurance policies and concepts, and provides general information to help an applicant make an informed decision.

Front 7

Cash Value

Back 7

The amount to which a policy owner is entitled if the policy is surrendered before maturity.

Front 8

Certificate

Back 8

A statement or booklet that confirms that a policy has been written and that describes the coverage in general.

Front 9

Certificate of Authority

Back 9

A document that authorizes a company to start conducting business and specifies the kind(s) of insurance a company can transact. It is illegal for an insurance company to transaction insurance without this certificate.

Front 10

Certificate of insurance

Back 10

A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.

Front 11

Claim

Back 11

A request for payment of the benefits provided by an insurance company.

Front 12

Coercion

Back 12

An unfair trade practice in which an agent uses physical or mental force with the intent of inducing an applicant to purchase insurance.

Front 13

Coinsurance Clause

Back 13

A provision that states that the insurer and the insured will share the losses covered by policy in a proportion agreed upon in advance.

Front 14

Commingling

Back 14

A practice in which a person in a fiduciary capacity illegally mixes his/her personal funds with the funds he/she is holding in trust.

Front 15

Commission

Back 15

The payment made by insurers to agents or brokers for the sale and service of policies.

Front 16

Commissioner

Back 16

The chief executive and administrative officer of a state insurance department (in some states, known as Director or Superintendent).

Front 17

Concealment

Back 17

The withholding of known facts that, if material, can void a contract.

Front 18

Conditional Contract

Back 18

A type of an agreement in which both parties must perform certain duties and follow rules of conduct to make the contract enforceable

Front 19

Consideration

Back 19

The binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss.

Front 20

Consumer Report

Back 20

A written and/or oral statement regarding a consumer’s credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports and other public sources.

Front 21

Contract

Back 21

An agreement between two or more parties enforceable by law.

Front 22

Contributory

Back 22

A group insurance plan that requires the employees to pay part of the premium.

Front 23

Controlled Business

Back 23

An entity that obtains and possesses a license solely for the purpose of writing business on the owner, immediate family, relatives, employer or employees.

Front 24

Convertible

Back 24

A policy that may be exchanged for another type of policy by contractual provision, at the option of the policy owner, and without evidence of insurability (i.e. term life changed to a form of permanent life).

Front 25

Countersignature

Back 25

The act of singning an insurance policy by a licensed resident agent.

Front 26

Coverage

Back 26

The inclusion of causes of loss (perils) which are covered within a scope of a policy.

Front 27

Credit Life Insurance

Back 27

A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor.