Agent (Advisor, Broker, Life Insurance Agent) – An individual or corporation that is licensed by provincial regulators to sell life insurance products to consumers.
Applicant – The individual applying for a life insurance policy.
Beneficiary – The individual or party that is designated to receive the proceeds of a life insurance policy in the event of the life insured’s death.
Benefit – The proceeds of a life insurance policy which may include the sum insured of the base policy plus any optional coverage such as term rider.
Carrier (Insurance Carrier) – Another name for an insurance company, the company that holds the contract for life insurance.
Cash Surrender Value (CSV) – A benefit that is included in some permanent life insurance policies that allow a policyholder to take policy loans against it or receive an amount of money if the policy is surrendered.
Claim – A request for payment from a life insurance policy in the event of the life insured’s death.
Coverage Amount – The amount of life insurance benefit.
Exclusions – A condition, activity, or other variables that an insurance company will exclude from an insurance contract such as cancer, climbing, sky diving, or others. It is usually used to reduce the risk to the insurance carrier and therefore reduce the premium for the insured. Insurance companies will always notify the insured about exclusions and the option to have them removed and pay a higher premium is also generally available.
Grace Period – A period following each premium due date during which a missed payment for a life insurance policy may be paid without penalty. The policy remains in effect throughout this period which is usually 30 days.
Group Insurance – Insurance provided under a master contract issued to a group of people such as employees.
Insurance Contract – The legal agreement with an insurance carrier that sets out the terms of the coverage which includes the application, policy, and any subsequent changes to the policy.
Insured (Life Insured) – The individual whose life is covered by the life insurance contract.
Irrevocable Beneficiary – A type of beneficiary designation where it is not possible to change the designation without written permission from the beneficiary.
Medical Information Bureau (MIB) – The Medical Information Bureau (MIB) is a central database for insurance carriers to share information amongst themselves regarding clients’ past insurance history. This database will store all your previous insurance history from any other applications that you may have submitted in the past.
Permanent Insurance – A type of life insurance that is meant to last until the life insured’s death. Typically, more expensive initially but premiums can be paid off like a mortgage on a house. With some permanent insurance, it can also include Cash Surrender Value. See Permanent Life Insurance for more information.
Policy – A physical or electronic document that outlines the insurance contract and contains all the information about the coverages, benefits, owner(s), and beneficiary designations.
Policy Owner – The person or party who owns the insurance policy.
Pre-Authorized Debit (PAD) – Regular electronic withdrawals from a policy owner’s bank account used to pay monthly premiums.
Premium – The monthly amount required to keep your life insurance contract in force.
Term Insurance – A type of life insurance that is meant to temporarily provide coverage for an individual. Typically, cheaper initially but premiums increase as the terms renew and the insured becomes older. See Term Life Insurance for more information.