Term

Definition

Annuity:

A policy, which pays an income for life or a specified period to the insured or their estate.

IRA:

Individual Retirement Account – A policy which pays income to the insured after age 59 ˝.

Life Insurance:

A policy, which pays a stated amount to a beneficiary upon death of the insured.

Types of Life Insurance

Term Life:

A policy that does not build cash value, and is issued for a specific period of time. If the insured dies within the specified term, the beneficiary receives a stated amount.

Whole Life:

A policy that builds cash value at a fixed interest rate, and is issued to age 100. If insured lives to age 100, they will receive the specified amount.

Universal Life:

A policy that builds Cash Value at a variable interest rate. Insured can borrow money against this policy. If insured lives to age 95, they will receive the specified amount.

Health Insurance:

A policy that pays hospital and doctor expenses if sick or injured.

Deductible:

A set amount that the insured must pay before the Health Insurance policy will begin to pay hospital and/or doctor’s bills.

Co-Insurance:

The insurance company and the policy-owner share covered expenses in agreed proportions. And 80/20 co-insurance policy is typical. The insurance company pays 80%, and you pay 20%.

Stop Loss:

A provision found in major medical health policies which states that once the costs have exceeded a specific amount, the insurance company then pays 100% of the eligible expenses above that amount, in a calendar year.

Disability Insurance:

A policy that helps to replace income when an insured is sick or injured and unable to work.

Long Term Care Insurance:

A policy that pays a specific portion of the expenses toward home health care, assisted living facilities, or nursing home care for an insured.


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