III IC-83 key terms

A written contract in which an insurer promises to pay specified benefits or cover specified losses in exchange for the premium paid by the policyholder.

The company that assumes risk under an insurance contract and is legally obliged to pay valid claims according to the policy terms and conditions.

The person or entity that owns an insurance policy and is responsible for paying the premium, whether or not they are the insured life or covered person.

The person whose life, health, or property is covered by the policy and whose death or loss triggers the benefit payment.

The person or entity named in the policy to receive the death benefit or other proceeds when the insured event occurs.

The amount the policyholder pays, usually at regular intervals, to keep an insurance policy in force and fund the insurer's obligations.

The sum paid to the beneficiary when the insured dies, typically the face amount of the policy plus any additional riders or accumulated value.

The base sum insured stated on the policy schedule, before adjustments such as riders, dividends, or outstanding policy loans are applied.

An optional provision attached to a policy that adds, limits, or modifies coverage, often for an extra premium and usually with its own conditions.

A formal request by a beneficiary or insured for payment under the policy, supported by evidence such as proof of death or medical records.

The insurer's process of assessing an applicant's risk profile, using health, financial, and lifestyle information, to decide whether and on what terms to issue cover.

The grouping of applicants into standard, preferred, or substandard categories based on assessed risk, which determines the premium rate charged.

A specified event, condition, or circumstance for which the insurer will not pay benefits, such as certain pre-existing conditions or high-risk activities.

The time that must pass after policy issue or a claim event before specified benefits become payable, often used for illness-related coverage.

A set period after a premium due date during which the policy remains in force even though the premium has not yet been paid.

The termination of a policy because required premiums were not paid within the grace period, ending the insurer's obligation to pay benefits.

The restoration of a lapsed policy to active status, usually requiring payment of overdue premiums plus interest and satisfactory evidence of continued insurability.

The quality of a risk being acceptable to an insurer under its underwriting standards, based on health, age, occupation, and other factors.

A short period after policy delivery during which the policyholder may cancel the policy for a full refund of premiums paid.

The savings component accumulated in a permanent life policy that the policyholder may access through surrender, withdrawal, or a policy loan.

A loan made by the insurer to the policyholder, secured by the policy's cash value, with unpaid balances and interest deducted from proceeds.

The amount the policyholder receives if they voluntarily terminate a policy with cash value before maturity or death.

Coverage that pays a death benefit only if the insured dies within a specified period, with no cash value and typically lower premiums.

Permanent coverage that remains in force for the insured's lifetime, provided premiums are paid, and builds cash value at a guaranteed rate.

A contract in which the insurer pays a series of income payments to the annuitant, often used to convert savings into retirement income.

The person whose life expectancy determines the amount and duration of annuity payments, who may or may not be the contract owner.

A fee deducted from the cash value or account value when a policy or annuity is cancelled during an early specified period.

The duty to provide clear, accurate information about product features, costs, and risks so the customer can make an informed decision.

The requirement that a recommended product matches the customer's financial situation, objectives, needs, and risk tolerance at the time of sale.

The process of collecting and verifying information about a client's identity, finances, and objectives before advising or selling a product.

Controls and procedures, including identity checks and suspicious transaction reporting, intended to prevent criminals from disguising the origin of illegal funds.

A false or misleading statement made about a policy, product, or its terms, which may give the customer grounds for complaint or redress.

A situation in which an adviser's personal or financial interest could improperly influence recommendations made to a customer.

Remuneration paid to an intermediary, usually calculated as a percentage of the premium, for selling or servicing an insurance or annuity product.

A licensed person or firm that arranges, advises on, or sells insurance products on behalf of customers and insurers.

A statutory or contractual window after purchase in which the customer may cancel the contract without penalty, distinct from insurer-specific free-look rights.

The documented process by which a firm receives, investigates, and responds to customer grievances within regulatory time limits.