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Here is a list of general terms you can expect to encounter when buying life insurance.

Adjuster
An insurance agency employee who specializes in evaluating losses and settling claims with policy holders.

Agent
A representative of an insurance company, either independently contracted or employed, by the company.

Apportionment
Dividing a loss, or payment to the consumer, by two or more insurance companies.

Appraisal
The process of determining the value of property, or the monetary value of a loss.

Beneficiary
The individual(s) designated to receive benefits from a life insurance policy.

Binder
Temporary insurance coverage valid until a permanent policy is approved.

Cash Value
The monetary value of an insurance policy cancelled before the insured’s death.

Complaint Ratio
A measurement of the number of consumer complaints against an insurance agency in proportion to the amount of premiums the insurance company collects.

Contestable Period
A specific length of time during which an insurance company may choose to revoke an issued policy if the applicant is found to have provided misleading or untruthful information on his or her application.

Deductible
A dollar amount which must be paid against a claim by the insured individual before insurance benefits begin.

Endorsement
A written change to an insurance policy. This is sometimes referred to as a rider.

Fraud
To deceive or hide information from an insurance company so that an otherwise invalid claim will be paid.

Grace Period
Extra time allotted to pay an insurance premium before penalties are incurred, or the policy is canceled.

Indemnify
To pay or compensate a policy holder for losses.

Lapse
Cancellation of an insurance policy due to nonpayment of the premium due.

Mortality Rate
The likelihood of death for individuals in a specified age or gender group.

Risk Class
A classification based on how likely a customer is to file a claim against an insurance company. Individuals posing the lowest risk usually receive the lowest premiums.

Premium
The amount of money paid for insurance coverage.

Rate Regulation
A state government’s way to track rate changes among insurance companies in that state.

Reinstatement
To reactivate insurance coverage after a lapse.

Settlement Options
Choices, other than a lump sum payment, for a beneficiary to receive payouts.

Severity
The level or degree of loss determined by an insurance company.

Twisting
Misrepresenting an insurance policy so that the customer will buy it. Twisting is illegal.

Underinsurance
When a consumer is inadequately insured for a loss incurred.

Underwriting
The process of determining the risk class of a consumer, and setting a premium amount.

Void
When a policy is no longer in effect due to misrepresentation or dishonesty by the consumer.

Waiting Period
A specific amount of time that must pass before an issued policy begins paying benefits.