![]() |
|
Financial Terms | |
Level Premium Life Insurance |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
Main Page: tax advisor, investment, financial, financial advisor, payroll, inventory, money, accounting, |
Definition of Level Premium Life InsuranceLevel Premium Life InsuranceThis is a type of insurance for which the cost is distributed evenly over the premium payment period. The premium remains the same from year to year and is more than actual cost of protection in the earlier years of the policy and less than the actual cost of protection in the later years. The excess paid in the early years builds up a reserve to cover the higher cost in the later years.
Related Terms:accepted quality level (AQL)the maximum limit for the number of defects or errors in a process Accidental Dismemberment: (Credit Insurance)Provides additional financial security should an insured person be dismembered or lose the use of a limb as the result of an accident. Amortization (Credit Insurance)Refers to the reduction of debt by regular payments of interest and principal in order to pay off a loan by maturity. Annual PremiumYearly amount payable by a client for a policy or component. Automatic Waiver of PremiumA benefit that automatically forfeits premium payments. Average lifeAlso referred to as the weighted-average life (WAL). The average number of years that each batch-level costa cost that is caused by a group of things ![]() Beneficiary (Credit Insurance)The person or party designated to receive proceeds entitled by a benefit. Payment of a benefit is triggered by an event. In the case of credit insurance, the beneficiary will always be the creditor. Borrower (Credit Insurance)A consumer who borrows money from a lender. Canadian Deposit Insurance CorporationBetter known as CDIC, this is an organization which insures qualifying deposits and GICs at savings institutions, mainly banks and trust companys, which belong to the CDIC for amounts up to $60,000 and for terms of up to five years. Many types of deposits are not insured, such as mortgage-backed deposits, annuities of duration of more than five years, and mutual funds. Canadian Life and Health Insurance Association (CLHIA)An association of most of the life and health insurance companies in Canada that conducts research and compiles information about the life and health insurance industry in Canada. Child Insurance Rider (CIR)insurance or insurability provided on current or future children of insured. Co-insuranceIn medical insurance, the insured person and the insurer sometimes share the cost of services under a policy in a specified ratio, for example 80% by the insurer and 20% by the insured. By this means, the cost of coverage to the insured is reduced. Coinsurance effectRefers to the fact that the merger of two firms decreases the probability of default on Commercial Business Loan (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes. Confidence levelThe degree of assurance that a specified failure rate is not exceeded. control premiumthe additional value inherent in the control interest as contrasted to a minority interest, which reflects its power of control Conversion premiumThe percentage by which the conversion price in a convertible security exceeds the Cost of InsuranceThe cost of insuring a particular individual under the policy. It is based on the amount of coverage, as well as the underwriting class, age, sex and tobacco consumption of that individual. Creditor (Credit Insurance)A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity. Critical Illness InsuranceCoverage that provides a lump-sum payment should you be diagnosed with a critical illness and survive a pre-determined period of time. There are no restrictions on how you use your benefit. Critical Illness Insurance (Credit Insurance)Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. The payment is made to your creditors to pay off your debt owing. Dead Peasants InsuranceAlso known as "Dead Janitors insurance", this is the practice, where allowed, in several U.S. states, of numerous well known large American Corporations taking out corporate owned life insurance policies on millions of their regular employees, often without the knowledge or consent of those employees. Corporations profiting from the deaths of their employees [and sometimes ex-employees] have attracted adverse publicity because ultimate death benefits are seldom, even partially passed down to surviving families. Debt (Credit Insurance)Money, goods or services that someone is obligated to pay someone else in accordance with an expressed or implied agreement. Debt may or may not be secured. Default premiumA differential in promised yield that compensates the investor for the risk inherent in default premiumDifference in promised yields between a default-free bond and a riskier bond. Deferred nominal life annuityA monthly fixed-dollar payment beginning at retirement age. It is nominal Disability Insuranceinsurance that pays you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60 or 90 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period. Disability Insurance (Credit Insurance)Group insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury. Economic lifeThe period over which a company expects to be able to use an asset. Equity-based insurancelife insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of an equity portfolio. Errors and Omissions Insuranceinsurance coverage purchased by the agent/broker which provides protection against loss incurred by a client because of some negligent act, error, oversight, or omission by the agent/broker. Export Credit InsuranceThe granting of insurance to cover the commercial and political risks of selling in foreign markets. Federal Deposit Insurance Corporation (FDIC)A federal institution that insures bank deposits. Federal Insurance Contributions Act of 1935 (FICA)A federal Act authorizing the government to collect Social Security and Medicare payroll taxes. Forward premiumA currency trades at a forward premium when its forward price is higher than its spot price. Group Life InsuranceThis is a very common form of life insurance which is found in employee benefit plans and bank mortgage insurance. In employee benefit plans the form of this insurance is usually one year renewable term insurance. The cost of this coverage is based on the average age of everyone in the group. Therefore a group of young people would have inexpensive rates and an older group would have more expensive rates. Guaranteed insurance contractA contract promising a stated nominal interest rate over some specific time Health Insurance Portability and Accountability Act of 1996 (HIPAA)A federal Act expanding upon many of the insurance reforms created by Individual Insuranceinsurance that is offered to individuals rather than groups. Insurance ActIn Canada, a general statute that contains most of the insurance law of a common law province, and regulates the conduct of insurers and insurance agents within the province. Insurance CompanyA firm licensed to sell insurance to the public. Insurance Policy (Credit Insurance)A policy under which the insurance company promises to pay a benefit of the person who is insured. Insurance principleThe law of averages. The average outcome for many independent trials of an experiment Job Loss Insurance (Credit Insurance)Coverage that can pay down your debt should you become involuntarily unemployed. The payment is made to your creditors to reduce your debt owing. Joint Policy LifeOne insurance policy that covers two lives, and generally provides for payment at the time of the first insured's death. It could also be structured to pay on second death basis for estate planning purposes. Lease (Credit Insurance)Contract granting use of real estate, equipment or other fixed assets for a specified period of time in exchange for payment. The owner or a leased property is the lessor and the user the lessee. Lender (Credit Insurance)Individual or firm that extends money to a borrower with the expectation of being repaid, usually with interest. Lenders create debt in the form of loans. Lenders include financial institutions, leasing companies government lending agencies and automobile dealers. Level-coupon bondBond with a stream of coupon payments that are the same throughout the life of the bond. Level payThe characteristic of the scheduled principal and interest payments due under a mortgage such that Level PremiumA premium that remains unchanged throughout the life of a policy life cycle costingthe accumulation of costs for activities that Life ExpectancyThe average number of years of life remaining for a group of people of a given age and gender according to a particular mortality table. Life Income FundCommonly known as a LIF, this is one of the options available to locked in Registered Pension Plan (RPP) holders for income payout as opposed to Registered Retirement Savings Plan (RRSP) holders choice of payout through Registered Retirement Income Funds (RRIF). A LIF must be converted to a unisex annuity by the time the holder reaches age 80. Life Insuranceinsurance that provides protection against an economic loss caused by death of the person insured. Life Insurance (Credit Insurance)Group Term life insurance that pays or reduces the balance due on a loan if the borrower dies before the loan is repaid. Life InsuredThe person who's life is protected by an individual policy. Life Underwriterinsurance Agent. Lifecycle costingAn approach to costing that estimates and accumulates the costs of a product/service over Liquidity premiumForward rate minus expected future short-term interest rate. market risk premiumRisk premium of market portfolio. Difference between market return and return on risk-free Treasury bills. maturity premiumExtra average return from investing in longversus short-term Treasury securities. Mortgage (Credit Insurance)An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for purposes of purchasing a loan secured by a home. Mortgage InsuranceCommonly sold in the form of reducing term life insurance by lending institutions, this is life insurance with a death benefit reducing to zero over a specific period of time, usually 20 to 25 years. In most instances, the cost of coverage remains level, while the death benefit continues to decline. Re-stated, the cost of this kind of insurance is actually increasing since less death benefit is paid as the outstanding mortgage balance decreases while the cost remains the same. Lending institutions are the most popular sources for this kind of coverage because it is usually sold during the purchase of a new mortgage. The untrained institution mortgage sales person often gives the impression that this is the only place mortgage insurance can be purchased but it is more efficiently purchased at a lower cost and with more flexibility, directly from traditional life insurance companies. No matter where it is purchased, the reducing term insurance death benefit reduces over a set period of years. Most consumers are up-sizing their residences, not down-sizing, so it is likely that more coverage is required as years pass, rather than less coverage. Mortgage Life insurance (Credit Insurance)Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage. Multilevel bill of materialAn itemization of all bill of material components, including Option premiumThe option price. organizational-level costa cost incurred to support the ongoing Personal Line of credit (Credit Insurance)A bank's commitment to make loans to a borrower up to a specified maximum during a specific period, usually one year. Portfolio insuranceA strategy using a leveraged portfolio in the underlying stock to create a synthetic put Pre-existing medical condition (Credit Insurance)A medical condition that existed before you became insured. Most policies exclude benefits if the condition is related to the event that triggers a claim if occurs within a certain period (6-12 months) after you became insured. Premium1) Amount paid for a bond above the par value. PremiumThis is your payment for the cost of insurance. You may pay annually, semi-annually, quarterly or monthly. The least expensive method is annually. Using any of the other payment modes will cost you more money. For example, paying monthly will cost about 17% more. If you pay annually and terminate your coverage part way through the year, you may not receive a refund for the remaining months to the annual renewal date. PremiumAnnual amount payable, by a client, for selected product or service. Premium bondA bond that is selling for more than its par value. Premium (Credit Insurance)Annual or monthly amounts payable, by a client, for a selected insurance coverage to insure debt obligations to their creditors are protected. Premium GrantA nonqualified stock option whose option price is set substantially Premium ModePayment schedule of policy premiums, usually selected by the policy owner (monthly, quarterly, annually). Premium OffsetAfter premiums have been paid for a number of years, further annual premiums may be paid by the current dividends and the surrender of some of the paid-up additions which have built up in the policy. In effect, the policy can begin to pay for itself. Whether a policy becomes eligible for premium offset, the date on which it becomes eligible and whether it remains eligible once premium offset begins, will all depend on how the dividend scale changes over the years. Since dividends are not guaranteed, premium offset cannot be guaranteed either. Price LevelA weighted average of prices of all goods and services where the weights are given by total spending on each good or service. Measured by a price index. product life cyclea model depicting the stages through product- (or process-) level costa cost that is caused by the development, production, or acquisition of specific products or services Refinancing (Credit Insurance)Extending the maturity date or increasing the amount of existing debt or both. Also, revising a payment schedule, usually to reduce the monthly payments and often to modify interest charges. ReinsuranceProcess in which the risk of potential loss is shared between two or more insurers. Resistance levelA price level above which it is supposedly difficult for a security or market to rise. Risk premiumThe reward for holding the risky market portfolio rather than the risk-free asset. The spread Risk PremiumThe additional rate of return required on a risky project risk premiumExpected return in excess of risk-free return as compensation for risk. Risk PremiumThe difference between the yields of two bonds because of differences in their risk. Risk PremiumThe difference between the required rate of return on a riskless asset with the same expected life. Risk premium approachThe most common approach for tactical asset allocation to determine the relative Shelf lifeThe time period during which inventory can be retained in stock and beyond Shelf life controlDeliberate usage of the oldest items first, in order to avoid exceeding Single-level bill of materialA list of all components used in a parent item. Single-premium deferred annuityAn insurance policy bought by the sponsor of a pension plan for a single Split Dollar Life InsuranceThe split dollar concept is usually associated with cash value life insurance where there is a death benefit and an accumulation of cash value. The basic premise is the sharing of the costs and benefits of a life insurance policy by two or more parties. Usually one party owns and pays for the insurance protection and the other owns and pays for the cash accumulation. There is no single way to structure a split dollar arrangement. The possible structures are limited only by the imagination of the parties involved. Strike Insurance (Credit Insurance)Coverage that can pay down your debt should you become unemployed due to a legal strike in your place of work. The payment is made to your creditors to reduce your debt owing. Support levelA price level below which it is supposedly difficult for a security or market to fall. Temporary Life InsuranceTemporary insurance coverage is available at time of application for a life insurance policy if certain conditions are met. Normally, temporary coverage relates to free coverage while the insurance company which is underwriting the risk, goes through the process of deciding whether or not they will grant a contract of coverage. The qualifications for temporary coverage vary from insurance company to insurance company but generally applicants will qualify if they are between the ages of 18 and 65, have no knowledge or suspicions of ill health, have not been absent from work for more than 7 days within the prior 6 months because of sickness or injury and total coverage applied for from all sources does not exceed $500,000. Normally a cheque covering a minimum of one months premium is required to complete the conditions for this kind of coverage. The insurance company applies this deposit towards the cost of a policy at its issue date, which may be several weeks in the future. Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |