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Glossary
R-U
- reinstatement (of a policy)
If a policy has lapsed due to nonpayment of premiums after the grace period has expired, it may be reinstated. To reinstate a policy, the insurance company typically requires the insured to show evidence of continued insurability (take a medical exam, for example), to pay all past premiums plus interest due, and to reinstate or repay any outstanding loans.
- settlement
Benefits paid from a life insurance policy.
- split dollar
An arrangement under which an employer and an employee can split the benefits and costs of a permanent life insurance policy.
- sub-account
Accounts in which one may allocate investment dollars. Sub-accounts, whose values fluctuate due to market risk, are offered in "variable" products including life insurance and annuities. There are a variety of sub-accounts to align with an investor's financial goals and willingness to accept risk.
- surrender charge
A fee imposed on a policy-owner when a life insurance policy or annuity is terminated for its cash value. (See: cash value.)
- surrender value
(See: cash value.)
- survivor benefit
(See: death benefit.)
- term life insurance
Life insurance that provides coverage for a specified period of time. It does not accumulate cash values.
- universal life insurance
Permanent life insurance that combines the low-cost protection of term insurance with a savings element that is invested by the insurance company in a tax-deferred account, the cash value of which may be available for a loan or withdrawal to the policyholder. (See: permanent life insurance.)
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