A Glossary Of Essential Life And Health Insurance Keywords

Author: Camlife Financial Corp | | Categories: Critical Illness Insurance , Disability Insurance , Financial Advisor , Financial Planning Services , Health Insurance , Life Insurance Broker , Mortgage insurance , New Immigrant Life Insurance , Non Medical Life Insurance , Term Life Insurance , Whole Life Insurance

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Every industry has its own language and terms. These words and phrases can be confusing to anyone who is not part of the daily operations of a specific industry, and the insurance business is no exception.

To help you understand the terms, acronyms, and phrases regularly used in the insurance industry, Camlife Financial Corp has created this handy reference guide. Here you’ll find valuable information allowing you to comprehend and communicate your life and health insurance needs effectively.

Generally, smoking includes any use of cigarettes or e-cigarettes within the past twelve months. If only occasional cigar, chewing tobacco, nicotine patch/gum, a rate between non-smoker and smoker may be given.

Term Life Insurance
A term life insurance is a temporary, low-cost life insurance policy with no cash values. Terms can be ten, fifteen, or twenty years plus. It’s like car insurance in that if you don’t crash (or in this case) die during the term, there will be no payout.

Whole Life Insurance
Whole life insurance is a permanent life insurance policy that also builds cash value. Since we are all going to die at some point, someone is going to get some money out of what’s been paid into it. Either the beneficiary on the death of the insured or the owner by cashing it in.

Critical Illness Insurance
It is like a life insurance policy except that a lump sum payout is triggered by a life-threatening illness. The most common triggers are cancer, heart attack, and stroke.

Disability Insurance
It pays a monthly benefit to the insured if they cannot work due to illness or injury, aka income replacement insurance.

Sometimes, if there is a pre-existing condition, a disability insurance policy will exclude certain conditions from being covered. For example, someone with a history of anxiety or depression would likely have a mental health exclusion. This is most common in disability policies and much less common with life insurance.

This is the person or people who receive the life insurance benefit on the death of the insured.

Waiting Period
Waiting period is like a deductible on disability insurance. The insured must cover the first (usually ninety days) until the disability insurance kicks in.

Underwriting is the process by which an insurance company determines the insurability of an applicant. For the most part, this is medical. But lifestyle and financial underwriting (especially for disability insurance) are also important.

If someone is rated, it means they are being charged more than average due to a higher perceived risk. For example, a rating of 150% means that a person is charged 50% more than the standard rate.

A benefit or sometimes even another life insurance coverage that’s added onto the primary policy. It’s done this way as it’s cheaper than issuing separate policies.

Preferred Rate
Someone who is deemed a better than average risk for life insurance. This is determined by underwriters. Health and family history are the most important factors.

Someone who is rejected for insurance. Usually, this is due to health.

Insurance Medical
For most policies above $500K, the insurance company will want to do a medical on the insured to verify the health. The insurer will pay a nurse to do this. Your own doctor cannot do it for you as it’s not deemed objective.

Grace Period
If you are thirty days or less late on your premium, this is the grace period. Your policy will remain in force for thirty days.

If you’re looking for life insurance brokers in Vancouver, BC, reach out to Camlife Financial Corp. We provide life insurance, living benefits insurance, and employee benefits to clients across Vancouver, Richmond, West Vancouver, North Vancouver, Burnaby, Surrey, White Rock, Langley, Coquitlam, Maple Ridge, and New Westminster BC.

To learn more about our services, visit our website by clicking here. If you have any questions about life and health insurance or want to schedule an appointment, please get in touch with us here.

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