OK Life & Health key terms

A financial or love-and-affection stake in a person's continued life or health that must exist when a policy is applied for, otherwise the contract is void.

The person or entity named in a policy to receive death benefits. A primary beneficiary is first in line; a contingent beneficiary receives the money if the primary dies first.

A beneficiary distribution method that divides a deceased heir's share among that heir's own descendants, rather than among all surviving heirs equally.

A state-mandated window, commonly 10 to 30 days after delivery, during which a policyowner may cancel a new policy for a full premium refund.

The time after a premium due date, typically 30 or 31 days, during which coverage stays in force before a policy can lapse for nonpayment.

The savings component inside permanent life insurance that builds over time and belongs to the policyowner, who may borrow against it or withdraw it.

Choices guaranteed by permanent policies for using accumulated cash value if premiums stop: cash surrender, reduced paid-up insurance, or extended term insurance.

A nonforfeiture choice that uses existing cash value to buy a term policy of the same face amount for whatever period that money will purchase.

A nonforfeiture choice that converts cash value into a smaller face-amount permanent policy that requires no further premiums and stays in force for life.

Money borrowed from an insurer against a permanent policy's cash value. Interest accrues, and any unpaid balance reduces the death benefit.

Coverage that pays a death benefit only if the insured dies during a set period, with no cash value and generally the lowest premium for a given face amount.

A term policy feature letting the owner continue coverage at the end of the term without new evidence of insurability, though the premium rises with attained age.

A term policy feature allowing the owner to exchange coverage for a permanent policy without proving insurability, usually at a premium based on attained age.

Permanent coverage with level premiums, guaranteed cash value, and a death benefit payable whenever death occurs, provided premiums are maintained.

Permanent coverage with flexible premiums and an adjustable death benefit, where cash value grows at a declared interest rate and costs are deducted monthly.

Universal life whose cash value interest is tied to an external market index, subject to a floor that limits loss and a cap that limits gain.

Permanent coverage whose cash value is invested in separate accounts chosen by the owner, so value fluctuates with market performance and is not guaranteed.

Small additional amounts of permanent coverage bought with policy dividends or extra premium payments, increasing both death benefit and cash value.

A return of surplus paid to owners of participating policies. It is not guaranteed and is generally received income-tax free as long as it does not exceed premiums paid.

A rider that lets a terminally or chronically ill insured collect part of the death benefit early, which reduces the amount later paid to beneficiaries.

A rider that keeps a policy in force without premium payments while the insured is totally disabled, usually after a waiting period of several months.

The insurer's process of evaluating an applicant's health, habits, occupation, and finances to classify risk and decide whether and at what price to issue coverage.

A medical report requested by an underwriter from an applicant's own doctor to clarify health history, treatment, or prognosis before a coverage decision.

An error in the insured's stated age; insurers adjust the death benefit to what the premium paid would have bought at the correct age rather than voiding the policy.

A provision barring the insurer from contesting a policy for misrepresentation after it has been in force for a set period, commonly two years.

A provision limiting the death benefit to a refund of premiums if the insured dies by suicide within a stated period, typically two years from issue.

Restoring a lapsed policy by paying overdue premiums with interest and providing proof of insurability, usually available within a limited window after lapse.

A contract that pays a stream of income, either for a set period or for life, funded by premiums that accumulate and are then annuitized.

An annuity whose contract value is invested in separate accounts, so payments vary with market results; it must be sold with a prospectus.

A fee deducted when an annuity or cash-value policy is canceled early, used to recover the insurer's upfront sales costs and declining over time.

Coverage that pays a stated amount when an accident causes death or the loss of a limb or sight, typically paying less for dismemberment than for death.

The amount an accidental death and dismemberment policy pays for accidental death or loss of two limbs or sight, as distinct from the smaller capital sum.

The portion of an accidental death and dismemberment benefit paid for loss of one limb or sight of one eye, usually a fraction of the principal sum.

Rules that prevent double payment when a person is covered by two health plans, naming one plan primary and letting the other pay only remaining costs.

The amount an insured must pay out of pocket for covered services each period before the health plan begins paying its share of the cost.

The percentage split of covered costs shared between insurer and insured after the deductible, such as the plan paying 80 percent and the member 20 percent.

The most an insured pays in a period for covered in-network care, including deductibles and coinsurance, after which the plan pays 100 percent.

A health problem diagnosed or treated before coverage began, which a policy may exclude or delay covering for a stated period.

The waiting time after a disability or illness begins before benefits become payable, functioning like a time deductible on disability income policies.

A partial disability benefit that pays a portion of the full monthly amount when the insured can work but earns less than before the disability.

A disability definition that pays benefits when the insured cannot perform the duties of their own specific job, even if able to work elsewhere.

A stricter disability definition that pays only when the insured cannot perform the duties of any job for which they are reasonably suited by training or experience.