A type of permanent life insurance that combines the premium and death benefit flexibility of universal life insurance with the investment flexibility and risk of variable life insurance. As cash value builds, it may be invested in a wide variety of separate accounts, each with its own earning capacity. This causes cash value and death … Read more
A type of insurance policy that protects against premature death by using a variable life insurance savings account. The proceeds of that savings account can then be invested in money market mutual funds, stocks, bonds and other equity or debt securities as you see fit for maximum return. Similar to whole life, variable life insurance … Read more
An amount of money an insurance company holds in reserve against a life insurance policy in case assets or investments prove insufficient or a liability requires more funds than expected. The amount of valuation reserve is determined by the age and sex of the insured person, how long the policy in question has been in … Read more
A flexible, permanent type of policy in which your insurer deposits your premium payments into an interest-bearing account, and it continues to grow. You may borrow against these funds if necessary, cash them in, invest them, or use their accumulated value to cover a payment if you ever need to. As with any other type, … Read more
Covers you when you’re involved in an accident with another driver who has no insurance or lacks sufficient coverage to pay for the damage he or she causes. Though required in most states, some drivers choose to bypass the purchase of auto insurance completely. This creates hardship for both the uninsured driver and anyone he … Read more
An extra layer of coverage purchased as additional protection above the limits of another insurance policy. Whereas most auto and home insurance policies provide less than $1 million in coverage, an umbrella policy can add millions of dollars worth of protection over and above those set policy limits. A relatively affordable type of coverage, an … Read more
Insurance protection that lasts a specific period of time and guarantees full value payment to the beneficiary upon your death, as long as the policy is still in effect. The most popular and affordable type of life plan, term life insurance rates are based on health at the time of application and remain stable during … Read more
A method of comparing the costs of cash value life insurance that takes into account the time value of money. If you’re primarily concerned with cash values and don’t think you’ll keep the policy forever, you’ll want a lower surrender cost index. The surrender cost index ranks all policies for the same period of ti … Read more
The financial cushion an insurance company sets in reserve that’s available to pay customer claims. The surplus is also a measure of the company’s financial strength and sustainability, once liabilities are subtracted from assets. If you file an insurance claim with your carrier for an unexpectedly high amount, the surplus provides a way for your … Read more
The practice by an insurance company of seeking reimbursement from someone legally responsible for an accident after the insurer has already paid damages on behalf of its insured. Subrogation may be against another driver who was negligent, but it may also be against either party’s medical insurance and used to cover treatment. If you’re not … Read more
