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Definitions - S

Saving Age
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 insured at issue lower than it actually was in order to get a lower premium. Most policies can be backdated up to six months. Also referred to as Saving Age.

Scheduled Premiums
Refers to planned premiums that are scheduled at the time of issue.

Secondary Beneficiary
A person(s) designated by the policyowner to receive policy proceeds if the Primary Beneficiary is deceased at the time benefits become payable. Also referred to as Secondary Beneficiary.

Second-To-Die
A type of life insurance policy that insures the lives of two people, typically a husband and wife. The death benefit proceeds are payable upon the second death and used to satisfy the estate tax. Available as either Whole Life or Universal Life, these policies feature premiums that are often less expensive than buying two separate policies. Also referred to as Joint and Last Survivorship Life Insurance or Joint Survivorship Life Insurance.

Section 401(k) Plan
Internal Revenue Code 401(k) is an employer-sponsored, salary-reduction retirement savings program. The employee defers a percentage of current salary on a pre-tax basis and the employer often matches some portion of that amount. There is a cap on the annual contribution, and a 10% penalty is levied on moneys withdrawn before age 59 1/2.

Select Mortality
Descriptive of the mortality experience of newly underwritten insured's. This period of discernibly different (favorable) mortality usually lasts 5 to 15 years.

Settlement Options
The ways in which policy holders or beneficiaries may choose to have benefits paid other than a lump sum.

Short Term
Preliminary Term insurance, not to exceed 11 months, which may be attached to a policy to change the anniversary date for the purpose of more conveniently spacing premium payments.

Simplified Underwriting: An underwriting process that applies a less strict analysis of risk factors. Participants in group plans may qualify for this abbreviated form of underwriting.

Single Premium Life Insurance
A life insurance plan that requires only one premium and is guaranteed to remain paid-up throughout the insured's lifetime.

Split Dollar Plan
An arrangement in which two parties, usually an employer and employee, jointly purchase the policy, pay premiums and share in the policy's benefits.

Spousal Discount
A discount for purchasing coverage together as husband and wife from the same insurance company.

Standard or Standard Plus
An underwriting rate classification for non-smokers who have minor health impairments.

Standard Risk
An average risk, not subject to rate loadings or restrictions because of poor health.

Step-Rate Premium
A rating structure in which the premiums increase periodically at pre-determined times such as policy years or attained ages.

Stock Life Insurance Company
A life insurance company owned by stockholders who elect a board to direct the company's management. Stock companies, in general, issue nonparticipating insurance, but may also issue participating insurance.

Straight Life Insurance
Whole life insurance on which premiums are payable for life.

Sub-Standard Risk
An individual, who, because of health history or physical limitations, does not measure up to the qualification of a standard risk.

Suicide Clause
A policy provision usually stating that if the insured dies by suicide within two years of the date of issue, the amount payable would be limited to the total premiums paid, less any policy debt. The full benefit would only be paid if the suicide occurs after the first two policy years.

Surplus
The amount by which the value of an insurer's assets exceeds its liabilities, i.e., the net worth of an insurance company.

Surrender
To terminate or cancel a life insurance policy before the maturity date. In the case of a cash value policy, the policy holder may exercise one of the non-forfeiture options at the time of surrender.

Surrender Charge
An amount retained by the issuer of a life insurance policy when a policy is canceled, typically assessed only during the first five to ten years of a policy.

Survivorship Life Insurance
A type of life insurance policy that insures the lives of two people, typically a husband and wife. The death benefit proceeds are payable upon the second death and used to satisfy the estate tax. Available as either Whole Life or Universal Life, these policies feature premiums that are often less expensive than buying two separate policies. Also referred to as Joint and Last Survivorship Life Insurance or Joint Survivorship Life Insurance.

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.