Life Insurance and Annuities

27 Suicide Clause — A policy provision which reduces or eliminates the amount to be paid if the insured dies from suicide within the first two policy years. Standard Risk — The classification of an applicant for a life insurance policy who fulfills the physical, occupational, and other requirements on which most of the company’s policies are issued. Someone whose characteristics are more favorable may be classified as a “Preferred Risk.” When the characteristics are less favorable, the applicant may be characterized as “Rated” or refused coverage altogether. Surrender — To voluntarily terminate or cancel a policy or the act of getting out of your annuity for its cash value or other nonforfeiture options. Usually a fee is applied if you surrender your insurance policy or annuity within the first seven or eight years of owning it. Tax Deferral — The money that accumulates in your annuity grows tax-deferred, meaning you do not pay taxes on it until you begin receiving annuity payments. Term Certain Annuity — An annuity that provides you with income payments for a specific period of time, such as 10 or 20 years, rather than a lifetime. Underwriting — The process of evaluating applicants for insurance and classifying them fairly, so the appropriate premium rate may be charged. This may involve a physical examination of the applicant. Waiver of Premium — A rider added to policy that will waive the premium payments required by an insured during the total disability of the insured.