insurance

Cumis Counsel

An attorney employed by a defendant in a lawsuit when there is an insurance policy supposedly covering the claim, but there is a conflict of interest between the insurance company and the insured defendant. Such a conflict might arise if the insurance company is denying full or partial coverage. In California, the defendant can demand that the insurance company pay the attorney fees of a selected attorney rather than use an insurance company lawyer. The term is derived from the name of a 1984 California case.

whole life insurance

Definition

Life insurance coverage that runs for the insured’s natural life. Whole life insurance provides both term life insurance and a savings plan (i.e., accumulation of “cash value” or “surrender value”) that allows for the insured, at any time after an initial period but before the insured’s death, to surrender the policy for that value or sometimes to borrow against it without surrendering the policy. Also termed ordinary life insurance; straight life insurance; permanent insurance.

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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.

term life insurance

Definition

A life insurance policy whereby the insured purchases coverage lasting for a specific period of time. The designated beneficiary collects the proceeds only if the insured dies within the specified term. There is no investment component to the policy, so the insured cannot surrender the policy for cash value during his or her lifetime. Usually, as the insured ages and the risk of death increases, either the premium amount increases or the amount of insurance coverage decreases. Also termed term policy.

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