Life insurance

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Life insurance

An insurance policy that pays a monetary benefit to the insured person's survivors after death.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Life Insurance

An insurance policy where, in exchange for a premium, the insurance company pays a certain benefit to the survivors of the policyholder upon his/her death. Life insurance can help defray costs of the funeral, pay off the estate's debts, and may provide for the survivors' (notably a widow or widower) future. There are two main types of life insurance. Term life insurance lasts only for a certain period of time and pays the death benefit only if the policyholder dies during that time. Whole life insurance lasts as long as the policyholder remains alive and provides a savings component against which the policyholder can borrow under most circumstances.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Life insurance.

Life insurance is a contract you sign with an insurance company, obligating it to pay a death benefit of a certain value to the beneficiaries you name.

In most cases, the payment is made at the time of your death, but certain policies allow you to take a portion of the death benefit if you are terminally ill and need the money to pay for healthcare.

You may select either term or permanent insurance. With a term policy, you are insured for a specific period of time. When the term ends, you must renew the policy for another term or change your coverage. Otherwise, you're no longer insured. With a permanent policy, you can buy coverage for your lifetime.

You pay an annual premium, typically billed monthly or quarterly, for the coverage. The insurer sets the cost, based on your age, health, lifestyle, and other factors. With a permanent policy, your premium is fixed, but with a term policy it typically increases when you renew your coverage to reflect the fact that you're older.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
There are four parties to the life insurance contract:
Most recently, in 2009, the Service issued Revenue Ruling 2009-13 (below), which provides definitive guidance to policyholders who surrender or sell their life insurance contracts in life settlement transactions.
"Although you can ' 1035' life insurance proceeds into an annuity [with an LTCI rider], you can't swim upstream and '1035' an annuity into a life insurance contract," Burkle said.
2009-14 (IRB 2009-21, May 26, 2009 answers this question: What are B's tax consequences upon receiving death benefits or sales proceeds regarding a term life insurance contract that B purchased for profit in three situations described below.
An alternate limit in IRS Revenue Ruling 74-307 permits life insurance to the extent that less than half of the contributions are paid into the plan for a life insurance contract. Whole life insurance does not need to be part of a 412(i) plan (it may be funded entirely with an annuity), although life insurance can provide significant additional benefits.
IRAs are prohibited from investing in life insurance contracts [4080)(3)].
- The term "Viatical settlement provider" means any person regularly engaged in the trade or business of purchasing, or taking assignments of, life insurance contracts on the lives of insureds described in paragraph (1) if - (I) such person is licensed for such purposes (with respect to insureds described in the same subparagraph of paragraph (1) as the insured) in the State in which the insured resides, or (II) in the case of an insured who resides in a State not requiring the licensing of such persons for such purposes with respect to such insured, such person meets the requirements of clause (ii) or (iii), whichever applies to such insured.
Also, Fuller would have to set up the VEBA in a state that allowed a trust to be the named beneficiary of individual life insurance contracts. As of 1991, such an allowance could only be found in the state of Georgia's insurance code.
The criteria matrices for the decision-maker offered seven different life insurance contracts are contained in Table 4.
In 1984 the tax policies of certain investment-oriented life insurance contracts were modified.
Such items would include tax-exempt interest income (net of allocable carrying costs) and the "inside build-up" of income in life insurance contracts (net of attributable premiums).

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