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Insurance Terms
You'll find everything you need to know about life insurance here. Our Research Center is different
because we only offer material which is explained in "Plain English".
To get started, let's take a look at common Insurance terms, and make it easy to understand what they mean:
These definitions are courtesy of the American Council of Life Insurers
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Declination Rejection by an insurance company of an application for insurance coverage, usually due to the applicant's health or occupation.
Deferred annuity A contract in which annuity payouts begin at a future date.
Defined benefit plan A pension plan that specifies the benefits an employee will receive after retirement. Benefits typically are based on length of service and salary, and usually are funded by the employer on behalf of each plan participant.
Defined contribution plan A pension plan that specifies the contributions made by employees, and in many cases the employer, on behalf of each plan participant. These funds accumulate for each participant until retirement, when they are distributed as a lump sum or monthly annuity. Benefits are based on the amount of contributions plus earnings.
Deposit term insurance A form of term insurance in which the first-year premium is larger than subsequent premiums. A partial endowment typically is paid at the end of the term period. In many cases, the partial endowment can be applied toward the purchase of a new term or whole life policy.
Disability A physical or mental condition that makes an insured person incapable of working.
Disability benefit The benefit paid under a disability income insurance policy; also a feature added to some life insurance policies providing for waiver of premium, and sometimes payment of monthly income, if the policyholder becomes totally and permanently disabled.
Disability income insurance Insurance that provides periodic payments, or in some cases a lump-sum payment, when the insured is unable to work due to illness or injury.
Dividend An amount of money returned to the holder of a participating life insurance policy. The money results from actual mortality, interest, and expenses that were more favorable than expected when the premiums were set. The amount of any dividend is set by the insurer based on the insurer's standards.
Dividend addition An amount of paid-up insurance purchased with a policy dividend and added to the policy's face amount.
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