An add-on on life insurance policies that pays a portion of the death benefit to insured persons who terminally ill.
This rider typically requires the insured to be diagnosed as terminally ill, provide medical records and physician’s statements, and usually has a fee added on to the monthly/annual premium to pay for this.
The amount paid varies, but is usually as high as 80% of the death benefit.
A policy add-on that will have the Insurance Carrier pay out an additional benefits — up to the full amount of the death benefit — if either the insured’s death is the result of an accident or loses a limb or digit because of an accident.
Unless an insured has a high-risk job or avocation, it’s usually not worth the extra cost, as it’s rarely paid out by insurance carriers.
Also called a mortality table. A table underwriters use that displays the probability a person will die at each age.
The tendency of those with higher risk lifestyles or dangerous professions to obtain life insurance more than those who are are lower risk.
Insurers usually try to reduce their risk in insuring a bad risk by having rigid underwriting guidelines.
A level term life policy that lasts for one year. Also called yearly renewable term, it guarantees coverage for one year, and can be renewed annually at a higher premium or converted to permanent life. Usually, this is purchased for temporary needs as a supplement to existing insurance.
If an underwriter decides it’s necessary to take a closer look at your health, either because of something you disclosed on the application or because of the results of your paramedical exam , then he or she will request a written summary of your medical history from your doctor or hospital. This document is called an APS, or “attending physician statement.”
You don’t pay for the APS, but it’s expensive and time consuming for the insurer, which is why an APS is only requested when the underwriter sees a need for it. An APS can slow down a life insurance application considerably because it may take your physician days to weeks to find the time to complete it, and it requires extra work on the part of the underwriter to go through it.
An APS might be requested during an application for life insurance or long-term disability insurance.
The APS is sent directly from your health care provider to the insurance underwriter. It is private health information protected by HIPAA.
An avocation would be a hobby or minor occupation, like skydiving, snowboarding or knitting.
Certain avocations are considered higher risk, and may result in a rate-up when applying for life insurance. That rate-up is typically determined by how often it’s done or how risky it is.
For example: people who scuba dive may have a rate-up if they typically exceed a certain depth, dive more often than typical vacation/holiday trips, or dive to overhead environments (caves, shipwrecks, etc.)
Avocations that may have a rate-up include, but are not limited to:
- Hang Gliding
- Rock Climbing
- Scuba Diving
- Sky Diving