When shopping for insurance it is important to understand the definitions and terminology associated with the industry. Click Here to learn more.
Convertible Term Insurance
Term insurance which can be exchanged (converted), at the option of the policyowner
and without evidence of insurability, for a whole life insurance policy or universal
life insurance policy.
Face Amount
The amount stated on the face of the policy that will be paid in case of death.
It does not include additional amounts payable under accidental death or other
special provisions, or acquired through the application of policy dividends.
Insurability
Acceptability to the company of an applicant for insurance.
Binder
In lines other than life and health, a binder is an acknowledgement (usually from the agent) that insurance applied for is in force whether or not premium settlement has yet been made or the policy issued. In life and health insurance, binders are not issued, but if premium settlement is made with the application, what is often erroneously referred to as a 'binder' is issued. Actually this is a conditional binding receipt.
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