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Definitions - A

Absolute Beneficiary
A beneficiary that cannot be changed without written consent.

Accelerated Benefits
Benefits available in some life insurance policies before death and usually triggered by long-term, catastrophic or terminal illness.

Accidental Death Benefits (ADB)
A provision added to a life insurance policy for payment of an additional benefit in case of death that results from an accident. This provision is often called "double indemnity."

Account Value or Accumulation Value
The accumulated premiums and interest after expense charges, cost of insurance, and charges for any supplemental benefits or riders in Universal life Insurance policies. Used to determine the policy's amount-at-risk in calculating mortality charges. A surrender charge is applied to it to determine the loan and surrender cash value.

Actual Age
An age calculation based on a person's last birth date (actual age) for premium rate determinations.

Actuary
A mathematician employed by an insurance company to calculate premiums, reserves, dividends, and insurance, pension, and annuity rates, using risk factors obtained from experience tables.

Adjustable Life Insurance
A type of life insurance that allows the policy holder to change the plan of insurance, raise or lower the face amount of the policy, increase or decrease the premium and lengthen or shorten the protection period.

Advanced Premium Deposit
Annual premiums paid in advance at a discount. The interest earned on the amount deposited before the premium due date reduces the cost of the premiums.

Adverse Selection
The tendency of persons with higher risk health expectations to apply for or continue insurance coverage to a greater extent than persons with lesser health expectations.

Age Change
The date on which an insured's age changes. In most life insurance contracts this is the date midway between the insured's birthdays. The date of age change depends on whether the insurer uses a age nearest birthday or age last birthday calculation for determining premium rates.

Age Nearest Birthday
An age calculation based on a person's nearest birth date for premium rate determinations. If the person's birth date is within six months, they are considered the next age.

Age Limits
Ages below and above which an insurance company will not accept applications or renew policies.

Agent
An authorized representative of an insurance company who sells and services insurance contracts.

Amendment
Document changing the provisions of an insurance contract signed jointly by the insurer and the policyholder.

Annual Policy Statement
Individual statements, providing specific policy information and values, which are sent to policyowners on each contract anniversary.

Annuitize
To begin a series of payments from an annuity. This term also refers to the settlement of a life insurance policy under the contract's annuity options.

Annuity: A contract sold by a life insurance company that provides fixed or variable payments to an annuitant, either immediately or at a future date.

Applicant
The person applying for the insurance policy. The applicant is not necessarily the owner or the insured.

Application
A statement of information made by someone applying for life insurance. The information gathered helps the life insurance company assess whether the risk presented by the applicant is acceptable to underwriters.

Application Supplement
A supplement to the application which documents that the non-guaranteed elements of the contract have been disclosed to the applicant during the sales process.

Approval
Signifies the legal acceptance of forms by a state when policy information is filed; Signifies the insurer's acceptance of risks as set forth in an application for insurance (as originally made or modified by the insurer); or Signifies the acceptance of a request from an applicant or policy holder for new insurance, reinstatement of a terminated policy, a policy loan, or other request.

Assignment
The legal transfer of one person's interest in an insurance policy to another person.

Attained Age
The insured's age on a given date. Attained age is one of the factors life insurance companies use to determine the insured's premiums. Some insurance companies round up the insured's age to the next age six months after each birthday.

Attending Physician's Statement (APS)
Information from a proposed insured's physician covering medical history and results of medical examinations. It is used to determine the appropriate underwriting classification for the proposed insured.

Authorization
Permission from the policy owner or proposed insured which allows release of information to a named party.

Aviation Hazard
The extra hazard of death or injury resulting from participation in aeronautics, usually as other than a passenger. This generally requires an extra premium rating or waiver of certain coverage benefits

Some whole life policies let you pay premiums for a shorter period such as 20 years, or until age 65. Premiums for these policies are higher since the premium payments are made during a shorter period.