INSURANCE

universal life insurance

Definition

A form of life insurance that offers flexible premiums, adjustable death benefits, and the ability of the insured to make partial withdrawals from the cash value. Universal life insurance policies generate cash value as the insured’s premium payments are invested into the insurer’s investment fund. The insurer pays the interest at a rate that is competitive with other investments, such as treasury bills, and the insured may use that interest to pay for his or her life insurance premiums.

 

insurer

Definition

A party, usually an insurance company, that contractually agrees to assume the risk of another party’s (the insured’s) losses and compensate for those losses. Also termed underwriter; insurance underwriter; carrier; assurer (for life insurance).

 

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insured

Definition

A party, usually an insurance policyholder, whose loss gives rise to the insurer’s duty to pay the proceeds of an insurance policy.

 

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Coinsurance

Definition

A risk-sharing agreement between the insurer and the insured under a particular insurance policy.  The insured agrees to cover a percentage of the losses up to a certain threshold level, rather than paying a fixed amount as with co-pay arrangements.

 

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