Beneficiary - A person named in a life insurance policy, annuity, will, trust, or other agreement to receive a financial benefit upon the death of the owner. A beneficiary can be an individual, company, organization, and so on.
Cash Surrender Value - The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage. Policyholders are usually able to borrow against the surrender value of a policy from the insurance company. Loans that are not repaid will reduce the policy's death benefit.
Chartered Life Underwriter (CLU) - A professional designation granted by The American College to individuals who complete a comprehensive curriculum focused primarily on risk management. Prerequisites include passing a series of written examinations, meeting specified experience requirements, and maintaining ethical standards. The curriculum encompasses insurance and financial planning, income taxation, individual life insurance, life insurance law, estate and succession planning, and planning for business owners and professionals.
Estate Conservation - Activities coordinated to provide for the orderly and cost-effective distribution of an individual's assets at the time of his or her death. Estate conservation often includes wills and trusts.
Estate Tax - Upon the death of a decedent, federal and state governments impose taxes on the value of the estate left to others (with limitations).
Executor - A person named by the probate courts or the will to carry out the directions and requests of the decedent.
Intestate - The condition of an estate left by a decedent without a valid will. State law then determines who inherits the property or serves as guardian for any minor children.
Living Trust - A trust created by a person during his or her lifetime.
Probate - The court-supervised process in which a decedent's estate is settled and distributed.
Term Insurance - Term life insurance provides a death benefit if the insured dies. Term insurance does not accumulate cash value and ends after a certain number of years, or at a certain age.
Testator - One who has made a will, or who dies having left a will.
Universal Life Insurance - A type of life insurance that combines a death benefit with a savings element accumulating tax deferred at current interest rates. Under a universal life insurance policy, the policyholder can increase or decrease his or her coverage, with limitations, without purchasing a new policy.
Variable Universal Life Insurance - A type of life insurance that combines a death benefit with a savings element accumulating tax deferred at current interest rates. Under a variable universal life insurance policy, the cash value in the policy can be placed in a variety of subaccounts with different investment objectives. The policyholder can transfer funds among the subaccounts as he or she wishes. Fees are charged after a certain number of transfers.
Whole Life Insurance - A type of life insurance that offers a death benefit and also accumulates cash value, tax deferred at fixed interest rates. Whole life insurance policies generally have a fixed annual premium that does not rise over the duration of the policy. Whole life insurance is also referred to as "ordinary" or "straight" life insurance.
Will - A legal document that declares a person's wishes concerning the disposition of property, the guardianship of his or her children, and the administration of the estate after his or her death.
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