a written document that contains the terms of the contract agreement between the insurance company and the owner of the policy
Policy owner / Payor
the person who pays for and owns the policy
the person whose life is covered under a life insurance policy or the person who is given the insurance protection
the person named in the life insurance contract who will receive the benefits when the insured dies
the beneficiary/party given the first priority to receive the death proceeds of the policy if the insured dies
the beneficiary/party who receives the death proceeds if the primary beneficiary pre-deceased the insured
the amount payable to the beneficiary, as stated in the life insurance policy, upon the death of the insured
Payment or series of payments, made by the insured to put the policy in force and to keep it in force until maturity
Premium Payment Provision
States that for as long as the insured is paying his premiums, his policy will remain in-force and protection will continue.
a specified length of time, usually 30 days after premium is due, within which a premium may be paid without penalty. During the grace period, the policy remains in-force
Part of the premiums you pay that is set aside as savings under an insurance policy
Policy Loan Provision
Grants the policy owner the right to take a loan agains the cash values of the policy. A policy loan may be repaid anytime, in whole or in part. However, a policy loan interest is charged against the loan and is compounded annually.
the date when the policy coverage matures / ends
are return of excess premiums which are paid to policyholders at the end of each policy year if the company has favorable claims and high earnings from investments. Dividends are not guaranteed because these would depend on the actual experience of the company
Dividend Options Provisions
A provision which allows the policy owner to choose whichever way he wants to utilize his earned dividends. There are five ways:
- Cash Payment Option – the simplest option wherein the insurance company will send the policy owner a check each year (provided that the insurance company has a good experience each year).
- Premium Reduction Option – the dividends earned is applied towards the premium due, thus, reducing the total amount of premium to be paid by the insured for a specific period.
- Interest Option – the dividends are left to the company to accumulate. Accumulated dividends are available for withdrawal at any time.
- Paid-Up Additions Option – the earned dividend are automatically used to purchase additional coverage
- Buy Yearly Renewable Term – the earned dividend are automatically used to purchase a yearly - renewable term insurance – meaning the extra coverage bought by the dividends is good for one year only.
An expertly trained and licensed professional who can recommend products to address customers’ needs based on current income, risk appetite, and future goals
Rider (Additional Benefit)
An amendment to an existing insurance contract that changes the terms of the original policy that can be issued at the time of purchase, mid-term or at renewal time. Insurance premiums may be affected and adjusted as a result
The monetary value of the units of the attached VUL Fund/s determined as the number of units multiplied by the Net Asset Value Per Unit or NAVPU. It has a direct relationship to the insurance charges for the VUL policy
Net Amount at Risk (NAR)
The difference between the death benefit paid out on a life insurance policy and the accrued cash value paid for it by the insured. It is the basis of insurance charges for policies
A specified period of time for which the policyowner is free from the obligation of paying regular policy premiums. The accumulated fund value of the policy is used to cover the necessary monthly policy charges to keep the policy in force