Glossary
Accidental Death and Dismemberment
Coverage that provides a lump-sum payment to you or your survivors if an accident results in the loss of a limb, paralysis or your death.
Accidental Death Benefit (ADB)
Coverage against accidental death usually payable in addition to base amount of coverage.
Lire la suiteAccidental Dismemberment: (Credit Insurance)
Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident.
Lire la suiteActuary
One who uses statistical information to evaluate the probability of future events and prices insurance products.
Lire la suiteAmortization (Credit Insurance)
Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity.
Lire la suiteBeneficiary
The person designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event.
Lire la suiteAssurance vie pour prêt hypothécaire (assurance créances)
Assurance vie temporaire décroissante prévoyant le versement d’une prestation de décès égale au solde décroissant impayé d’un prêt hypothécaire.
Lire la suiteBeneficiary (Credit Insurance)
The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor.
Lire la suiteBenefit
An instruction that pays a cash amount upon the occurrence of a specific event.
Lire la suiteBond
Fixed interest security issued by a corporation or government, having a specific maturity date.
Lire la suiteBook Returns
Book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
Lire la suiteCanada Pension Plan (CPP)
A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).
Lire la suiteCanadian Life and Health Insurance Association (CLHIA)
An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada.
Lire la suiteCash Surrender Value
Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.
Lire la suiteChild Insurance Rider (CIR)
Insurance or insurability provided on current or future children of insured.
Lire la suiteClaimant
Person or party making request for payment of benefits under the terms of an insurance policy.
Lire la suiteCommercial Business Loan (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.
Lire la suiteContingencies
Events that are possible, but may or may not happen. Premium rates and acceptance of certain risk are based on contingencies.
Lire la suiteContribution Principle
This is the principle, which specifies the factors that must be taken into account when calculating dividends. Depending on the insurance companies, the key factors are: interest earnings, mortality, and operating expense.
Lire la suiteConversion
The act of changing from one type of life insurance policy to another, without having to give evidence of insurability.
Lire la suiteCost of Insurance
The cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual.
Creditor (Credit Insurance)
A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.
Lire la suiteCritical Illness Insurance
Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. There are no restrictions on how you use your benefit.
Lire la suiteCritical Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing.
Lire la suiteDaily Interest Accumulation
Account in which interest is accrued daily and credited to the account at the end of a specified time.
Lire la suiteDebt (Credit Insurance)
Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured.
Lire la suiteDeductible
A flat amount that an insured must pay before the insurance company makes any benefit payments under a health insurance policy.
Lire la suiteDisability Insurance (Credit Insurance)
Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.
Lire la suiteDividend
Unlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company’s overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company’s earnings and surplus.
Lire la suiteDividend Policy
This policy governs an insurance company’s actions regarding distribution of dividends to policyholders. It’s goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.
Lire la suiteEquity-based insurance
Life insurance or annuity products in which the cash value and benefit level fluctuate according to the performance of an equity portfolio.
Equity investment
Through equity investment, investors gain part ownership of the corporation. The primary type of equity investment is corporate stock.
Lire la suiteEstate Planning
An insurance program designed to provide funds for insured’s dependents upon death of the insured, and to also conserve, as much as possible, the personal assets that the insured wants to bequeath to heirs.
Lire la suiteEvidence of Insurability
Evidence submitted to an insurance company that is used to determine whether an individual is eligible for the insurance coverage in which the individual has applied for.
Lire la suiteExclusion
A specific condition or circumstance listed in the policy that are not covered by the policy
Lire la suiteGuaranteed Interest Annuity (GIA)
Interest bearing investment with fixed rate and term.
Lire la suiteGuaranteed Interest Certificate (GIC)
Interest bearing investment with fixed rate and term.
Lire la suiteGuaranteed Renewal
A promise that a life insurance policy will be renewed without penalty or medical examination after the term has expired. The renewal rate can also be guaranteed.
Lire la suiteIllustration
An illustration is a computer-generated spreadsheet that takes into account a number of assumptions in order to show how a specific policy might perform for a specific individual.
Lire la suiteIndemnity
A type of contract in which the amount of the benefit to be paid is based on the actual amount of financial loss determined at the time of the loss – for example, hospital expense insurance.
Lire la suiteInsurance Act
In Canada, a general statute that contains most of the insurance law of a common law province, and regulates the conduct of insurers and insurance agents within the province.
Lire la suiteInsurance Policy (Credit Insurance)
A policy under which the insurance company promises to pay a benefit of the person who is insured.
Lire la suiteInsurer
The party in an insurance contract that promises to pay a benefit if a specified loss occurs. It is usually an insurance company.
Lire la suiteInterest Option
One of several investment accounts in which your premiums may be invested within your life insurance policy.
Lire la suiteInterest Rate
Rate charged or paid for the use of money, normally expressed as a percentage
Lire la suiteIssue
When an item is approved and released for sale, or when a policy or sales contract is accepted.
Lire la suiteIssue Age
Age of an insured as at the policy issue date, using “age nearest” next birthday formula.
Lire la suiteJob Loss Insurance (Credit Insurance)
Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing.
Joint Policy Life
One insurance policy that covers two lives, and generally provides for payment at the time of the first insured’s death. It could also be structured to pay on second death basis for estate planning purposes.
Lire la suiteLapse
Termination when a policy has no cash value after all attempts at conservation have failed.
Lire la suiteLapses
Policies which are sold but do not remain in force because the policyholder fails to pay premiums.
Lire la suiteLease (Credit Insurance)
Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lesser and the user the lessee.
Lire la suiteLender (Credit Insurance)
Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers.
Lire la suiteLife Insurance
Insurance that provides protection against an economic loss caused by death of the person insured.
Lire la suiteLife Insurance (Credit Insurance)
Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid.
Lire la suiteMoney Market Fund
A low risk mutual fund that achieves greater liquidity by investing primarily in short-term securities.
Lire la suiteMortgage Life insurance (Credit Insurance)
Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.
Lire la suiteMortgage (Credit Insurance)
An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home.
Lire la suiteMultiple Lives
Two or more death benefits based on one definition with different insured’s.
Lire la suiteNon-participating Policy
A type of insurance policy or annuity in which the owner does not receive dividends.
Lire la suiteOperating Expenses
The amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates.
Lire la suitePaid-Up Additions
A type of insurance policy or annuity in which the owner receives dividends, typically increases the death.
Lire la suiteParticipating Policy
A policy offers the potential of sharing in the success of an insurance company through the receipt of dividends.
Lire la suitePension Fund
Assets used to pay the pensions of retirees. An investment institution established to manage the assets used to pay the pensions of retirees.
Lire la suitePersonal Line of credit (Credit Insurance)
A bank’s commitment to make loans to a borrower up to a specified maximum during a specific period, usually one year.
Lire la suitePolicy
A written document that serves as evidence of insurance coverage and contains pertinent information about the benefits, coverage and owner, as well as its associated directives and obligations.
Lire la suitePolicy Date
Date on which the insurance company assumes responsibilities for the obligations outlined in a policy.
Lire la suitePolicyowner
The person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.
Pre-Authorized Cheque (PAC)
Withdrawals generated by a company (with client’s permission) against a client’s bank account on a predetermined schedule for a predetermined amount.
Lire la suitePre-existing medical condition (Credit Insurance)
A medical condition that existed before you became insured. Most policies exclude benefits if the condition is related to the event that triggers a claim if occurs within a certain period (6-12 months) after you became insured.
Lire la suitePreferred Beneficiary
Used in older contracts to confer the same rights as an irrevocable beneficiary. Applied to family members.
Lire la suitePremium (Credit Insurance)
Annual or monthly amounts payable, by a client, for a selected insurance coverage to insure debt obligations to their creditors are protected.
Lire la suitePremium Mode
Payment schedule of policy premiums, usually selected by the policy owner (monthly, quarterly, annually).
Lire la suitePremium Offset
After premiums have been paid for a number of years, further annual premiums may be paid by the current dividends and the surrender of some of the paid-up additions, which have built up in the policy. In effect, the policy can begin to pay for itself. Whether a policy becomes eligible for premium offset, the date on which it becomes eligible and whether it remains eligible once premium offset begins, will all depend on how the dividend scale changes over the years. Since dividends are not guaranteed, premium offset cannot be guaranteed either.
Lire la suiteQuebec Pension Plan
A plan that primarily provides retirement and long-term disability income benefits for residents of Quebec.
Lire la suiteRefinancing (Credit Insurance)
Extending the maturity date or increasing the amount of existing debt or both. Also, revising a payment schedule, usually to reduce the monthly payments and often to modify interest charges.
Lire la suiteReinsurance
Process in which the risk of potential loss is shared between two or more insurers.
Lire la suiteReinsurer
An insurance company that accepts the risk transferred from another insurance company in a reinsurance transaction.
Lire la suiteRider
An attachment to an insurance policy that becomes part of the insurance contract and expands the benefits payable.
Lire la suiteRisk class
A group of insureds who present similar risk to the insurance company. Risk classes include – standard, preferred, nonsmoker, substandard, uninsurable.
Lire la suiteRRSP
Registered Retirement Savings Plan – A plan enabling Canadian citizens to establish tax-sheltered accounts to accumulate money towards retirement.
Lire la suiteSegregated Fund
A pool of assets held by the insurer, to back a specific liability to a policyholder. Segregated Funds fluctuate in value depending on the market value of a specific group of assets the company must maintain separately.
Strike Insurance (Credit Insurance)
Coverage that can pay down your debt should you become unemployed due to a legal strike in your place of work. The payment is made to your creditors to reduce your debt owing.
Lire la suiteSurrender Charge
Expense charges applied when the owner of a policy surrenders a policy for its cash value.
Lire la suiteTerm
The time period during which a policy is in force, or the time it takes for a policy to reach maturity.
Lire la suiteTerm Life
A product that provides life coverage for a specified duration typically not beyond the age of 75.
Lire la suiteTerminal Illness Insurance (Credit Insurance)
Coverage that provides a lump-sum payment should you become terminally ill. The payment is made to your creditors to pay off your debt owing.
Lire la suiteUnderwriter
Person that uses various types of evidence to evaluate the insurability of a client.
Lire la suiteUniversal Life
An unbundled Life product with a separate investment component. It typically does not participate in companies profits.
Lire la suiteVariable Annuity
A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.
Lire la suiteWaiting Period (Credit Insurance)
A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period).
Lire la suiteWaiver of Premium
A benefit that allows an insurance company to pay premiums on behalf of the insured.
Lire la suite