Life Insurance and Life Settlement Terms - B
Back-dating
Making the effectual date of a term life insurance policy prior than the date of the application so that the premium rate will be lesser. State law normally limits back-dating to not more than six months.
Basic Death Benefit
The basic death benefit does not comprise the benefit for any supplementary riders like an accidental death benefit (ADB) rider. For policies in which the death benefit remains steady, the basic death benefit is equivalent to the face amount.
Balance Sheet
It shows assets, including investments and reinsurance, and liabilities, like loss reserves to pay claims in the future, as of a certain date. It also states a company’s equity, called policyholder surplus. Changes in that surplus are one pointer of an insurer’s financial standing.
Basis Point
0.01 % of the yield of a mortgage bond or note. The least measure used.
Beneficiary
The person or party the possessor of a term life insurance policy names to get the policy benefit if the event insured against occurs.
Benefit
The sum of money paid when a term life insurance claim is approved.
Benefit Period
The time through which periodic income benefits will be paid under a disability income insurance policy.
Binding Premium Receipt
A kind of premium receipt that provides a potential insured with temporary word life insurance coverage from the time the applicant gets the receipt until the insurer declines the application or issues and delivers a policy.
Binder
Temporary authorization of coverage given prior to the actual insurance policy.
Blanket Insurance
Coverage for more than one kind of property at one location or one kind of property at more than one location. Instance: chain store.
Blackout Period
The period of time in which a surviving spouse no longer receives survivors benefits and before he or she is entitled for retirement benefits.
Bodily Injury Liability Coverage
Segment of an auto insurance policy that covers injuries the policyholder causes to someone else.
Boiler and Machinery Insurance
Frequently called Equipment Breakdown, or Systems Breakdown insurance. Commercial insurance that covers damage caused by the malfunction or breakdown of boilers, and a huge array of other equipment including air conditioners, heating, electrical, telephone and computer systems.
Bond
A security that obligates the issuer to disburse interest at specified intervals and to reimburse the principal amount of the loan at maturity. In insurance, a type of suretyship. Bonds of different types guarantee a payment or a reimbursement for financial losses resulting from dishonesty, failure to carry out and other acts.
Bond rating
An evaluation of a bond’s financial strength, conducted by such main ratings agencies as Standard & Poor’s and Moody’s Investors Service.
Book Of business
Total amount of insurance on an insurer’s books at a meticulous point in time.
Broker
An individual or concern who acts on behalf of the seller of a life insurance policy. This intermediary owes a fiduciary duty to the vendor of the policy, not to the life settlement provider or any other party connected with a life settlement transaction.
Broker-dealer
An individual or concern whose primary business activity is the purchasing, selling or management of securities. Broker-deals are essential to be registered with the NASD and licensed pursuant to SEC regulations.
Bundled Insurance Product
A life insurance product in which the mortality, investment, and expense factors used to compute premium rates and cash values are not identified separately in the policy. Traditional whole life insurance is an instance of a bundled insurance product.
Business Insurance
Life insurance that is planned to serve the term life insurance wants of a business rather than the needs of an individual.
Business-Continuation Insurance
A word life insurance plan that enables the owner(s) of a business to offer for the continued operation of the business if the owner or a key person dies.
Buyer’s Guide
In the United States, a publication that several states require insurance companies to give to an applicant for term life insurance. The Buyer’s Guide assists the applicant make an informed choice among policies.
Burglary & theft Insurance
Insurance for the loss of property due to theft, robbery or larceny. It is provided in a standard homeowner’s policy and in a business manifold peril policy.
Business Income & Extra Expense Insurance
Commercial coverage that repay a business owner for lost profits and continuing fixed expenses during the time that a business ought to stay closed while the premises are being restored because of physical damage from a covered peril, like a fire. It also might cover financial losses that may occur if civil authorities limit access to an area after a disaster and their actions avert customers from reaching the business premises. Depending on the policy, civil authorities coverage may begin after a waiting period and last for two or more weeks.
Business Owners Policy/BOP
A policy that combines property, liability and business disruption coverages for small- to medium-sized businesses. Coverage is usually cheaper than if bought through separate insurance policies.
Buyer
A life insurance policy buyer, also known as a life settlement buyer, or life settlement broker, is an unit with the purpose of purchasing life insurance policies.
Buy-Sell Agreement
An agreement established among business partners in whom each agrees to vend their share to the other in event of death, disability or departure.
