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Definitions - B

Backdating
A procedure for making the effective date of a policy earlier than the application date. Backdating is often used to make the age of the consumer at policy issue lower than it actually was in order to get a lower premium.

Beneficiary
The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured.

Benefit Period
A period of time typically one to three years during which disability income or long term care benefits are paid after the waiting period is satisfied. When the benefit period ends, the insured must generally then satisfy a new waiting period in order to establish a new benefit period.

Benefits
The sum of money specified in a life insurance contract to be paid to the beneficiary when a loss occurs.

Binder
A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued.

Binding Receipt
A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.

Blended Product
A general term used to describe products structured with both Whole Life and Term components.

Broker
A licensed person or organization paid by you to look for insurance on your behalf.

Burial Insurance
A life insurance policy of minimal face amount intended to provide just enough insurance to cover the burial and funeral expenses.

Business Life Insurance
Life insurance purchased by a business enterprise on the life of a member of the firm. It is often bought by partnerships to protect the surviving partners against loss caused by the death of a partner, or by a corporation to reimburse it for loss caused by the death of a key employee.

Buy-Sell Agreement
An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner's share of the business and the exact terms of the buying-and-selling process are established before death or the beginning of disability.

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.