An annuity that commences payment to the annuitant at the end of the first prescribed payment period. If an insured buys an immediate annuity with monthly payments, he will start receiving benefits at the end of the first month after the purchase.

A term used in pension or retirement plans. With immediate vesting an employee’s right to benefits begin as soon as he enters the plan. See also Vesting.

A risk, or subject of insurance, with insurable qualifications below the standard of risks on which the premium for the coverage was based. For example, a Life Insurance prospect with heart disease would be an impaired risk. See Substandard Risk. Contrast with Standard Risk.

Life or Health Insurance for which premiums are being paid, or for which premiums have been fully paid. The term refers to the total face amount of a Life insurer’s portfolio of business. In Health Insurance it refers to the total premium volume of an insurer’s portfolio of business.

Various rights that may be exercised under the policy contract by the policy owner. Some of the incidents of ownership would be: (1) the right to cash in the policy, (2) to receive a loan on the cash value of the policy, and (3) to change the beneficiary.

A Life Insurance contract which provides income on a monthly basis, as opposed to a policy which pays proceeds in a lump sum.

A clause in a policy providing that after a policy has been in effect for a given length of time (two or three years), the insurer shall not be able to contest the statements contained in the application. A Health Insurance provision also states that after that time no claim shall be denied or reduced on the grounds that a condition not excluded by name at the time of issue, existed prior to the effective date. In Life policies, if an insured lied as to the condition of his health at the time the policy was taken out, that lie could not be used to contest payment under the policy if death occurred after the time limit stated in the incontestable clause.

(1)That type of Life Insurance, which usually only covers one insured under a contract; (2) The term used to distinguish this type of Life Insurance from Group Life Insurance.

One of the major classes of insurance. It is generally sold in amounts of less than $1,000 by agents who service insureds on debits. The premiums are collected weekly or monthly at the address of the insured. See also Debit.

Payment of the proceeds of a Life Insurance policy, or its cash value in installments rather than in a lump sum. The term refers to any one of the options in a Life Insurance policy that has this result.

A settlement option under which the proceeds are guaranteed to be paid in equal installments for a specified period of time.

The face amounts of contracts still to be paid out to insureds.

In the calculation of premium, it is the rate of return on the company’s investment of premium dollars over the lifetime of the policy. Insurance company investment experience will affect life insurance cost.

A method of determining the cost of Life Insurance that takes into account the interest that might have been earned on premium money if it had been invested rather than put into premiums.

Provisions in variable and flexible premium policies which guarantee certain interest earnings plus an additional interest percentage should the current interest rate rise above a specified percentage.

A beneficiary that cannot be changed without his consent.

Contracts actually written by an insurer and paid for but not yet delivered to or accepted by the insured.