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Glossary – Terms and Definitions

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A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

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A

Accidental Death Benefit – a benefit in addition to the death benefit paid to the beneficiary, should death occur due to an accident. There can be certain exclusions as well as time and age limits.

Advisor – the person responsible of the investment performance of an investor. He or she provides detailed information and advice on insurance policies and mutual funds

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B

Beneficiary – an individual who is entitled to receive distributions from a trust, will, or life insurance policy

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C

Cash surrender option – Nonforfeiture option that specifies the policy owner can cancel the coverage and receive the entire net cash value in a lump sum.

Cash value – The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company. Also called “cash surrender value.”

Contract – In most cases, an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder.

Cooling off period – a period of time during which the purchaser may cancel the plan he purchased

Contingent Beneficiary – also referred to as a secondary or tertiary beneficiary. An individual or individuals named to receive proceeds in case the primary beneficiary is not alive.

D

Disability benefits – Insurance coverage that pays for lost wages when you are unable to work because of a disability illness or injury.

E

Emergency fund – a separate account of fund built for the purpose of spending on unexpected and unplanned expenses such as unemployment, calamities, and the like

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F

Face value – The initial death benefit amount provided by the insurance plan as shown on its contract. The actual death benefit may be higher or lower depending on the plan conditions, options selected, outstanding policy loans, or premium owed.

G

Grace period – The time during which a policy remains in force after the premium is due but not yet paid. The policy lapses if the premium isn’t paid after the grace period. Sun Life Financial Philippines’ grace period is 31 days.

H

I

Incontestability – A provision that places a time limit on a life insurance company´s right to deny payment of a claim because of suicide or a material misrepresentation on your application. Sun Life Financial Philippines’ incontestability period is 2 years.

Insured – The person or organization covered by an insurance policy.

Insurer – The insurance company.

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Irrevocable Beneficiary – a beneficiary that cannot be changed.

J

K

L

Lapse – The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

Life stage/ life cycle – a specific status in life used to determine an individual’s priorities, goals, and financial standing

M

Mutual Fund – an investment company that pools together money from different investors and invests them in various securities depending on the investment objective fund

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N

O

P

Paid-up – This occurs when a life insurance policy will not require any further premiums to keep the coverage in force.

Paid-up additions – Additional amounts of life insurance purchased using dividends; these insurance amounts require no further premium payments.

Policy – The contract issued by the insurance company to the insured.

Policy loan – An advance made by a life insurance company to a policy owner. The advance is secured by the cash value of the policy.

Policy owner – The person or party who owns an individual insurance policy. This person may be the insured, the beneficiary, or another person. The policy owner usually is the one who pays the premium and is the only person who may make changes to a policy.

Premium – the total cost of payment required periodically for the coverage of a given insurance plan

Q

R

Rated policy – A policy issued at a higher premium to cover a person classified as a greater-than-average risk, usually due to impaired health or a dangerous occupation.

Risk appetite – the amount of risk an investor is willing to take

ROI (Return On Investment) – used to measure the efficiency and benefits of an investment

S

T

U

Underwriter – The person who reviews an application for insurance and decides if the applicant is acceptable and at what premium rate.

Underwriting – The process an insurance company uses to decide whether to accept or reject an application for a policy.

V

VUL (Variable Universal Life) – a policy that offers both life insurance and an investment feature

W

X

Y

Z

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