LIFE INSURANCE

life insurance.An agreement between an insurance company and the policyholder to pay a specified amount to a designated beneficiary on the insured’s death. — Also termed (in Britain) assurance. See ASSURANCE(2). [Cases: Insurance  1011. C.J.S. Insurance §§ 10–14.]

“Life and accident insurance has been defined as a contract whereby one party, for a stipulated consideration, agrees to indemnify another against injury by accident or death from any cause not excepted in the contract. Strictly speaking, however, a contract of life insurance is not one of indemnity, but is an absolute engagement to pay a certain sum at the end of a definite or indefinite time.” 43 Am. Jur. 2d Insurance § 3 (1982).

corporate-owned life insurance.A life-insurance policy bought by a company on an employee’s life, naming the company as beneficiary. — Abbr. COLI.

credit life insurance.Life insurance on a borrower, usu. in a consumer installment loan, in which the amount due is paid if the borrower dies.

decreasing-term life insurance.See decreasing term insurance under INSURANCE.

endowment life insurance.A type of life insurance that is payable either to the insured at the end of the policy period or to the insured’s beneficiary if the insured dies before the period ends. — Also termed endowment insurance.

industrial life insurance.Life insurance characterized by (1) a small death benefit (usu. $2,000 or less), (2) premium payments that are due weekly, biweekly, or monthly and that are collected at home by the insurer’s representative, and (3) no required medical examination of the insured. — Sometimes shortened to industrial insurance. joint life insurance.Life insurance on two or more persons, payable to the survivor or survivors when one of the policyholders dies.

key-employee life insurance.Life insurance taken out by a company on an essential or valuable employee, with the company as beneficiary. — Also termed key-employee insurance; key-man insurance; key-person insurance; key-executive insurance.

last-survivor life insurance.Life insurance on two or more persons, payable after all the insureds have died. — Also termed last-survivor insurance.

limited-payment life insurance.Life insurance that requires premium payments for less than the life of the agreement.

national-service life insurance.Life insurance available to a person in active U.S. military service on or after October 8, 1940, and issuable at favorable rates. • This insurance was established by the National Service Life Insurance Act of 1940, and is regulated by the Administrator of Veterans Affairs. 38 USCA §§ 1901–1929. [Cases: Armed Services  55. C.J.S. Armed Services § 192.]

ordinary life insurance. 1. Life insurance having an investment-sensitive cash value, such as whole life insurance or universal life insurance. • Ordinary insurance is one of three main categories

of life insurance. — Often shortened to ordinary insurance. Cf. group insurance; industrial life insurance. 2. See whole life insurance.

partnership life insurance.See partnership insurance (1) under INSURANCE.

single-premium life insurance.Life insurance that is paid for in one installment rather than a

series of premiums over time. — Also termed single-premium insurance.

split-dollar life insurance.An arrangement between two people (often an employer and employee) by which life insurance is written on the life of one, though both share the premium payments. • On the insured’s death or other event terminating the plan, the noninsured person receives the cash value of the insurance as reimbursement, and the beneficiary named by the insured is entitled to the remainder. — Also termed split-dollar insurance.

straight life insurance.See whole life insurance.

term life insurance.Life insurance that covers the insured for only a specified period. • It pays a fixed benefit to a named beneficiary upon the insured’s death but is not redeemable for a cash value during the insured’s life. Cf. whole life insurance. universal life insurance.A form of term life insurance in which the premiums are paid from the insured’s earnings from a money-market fund.

variable life insurance.A form of life insurance in which the premiums are invested in securities and whose death benefits thus depend on the securities’ performance, though there is a minimum guaranteed death benefit.

whole life insurance.Life insurance that covers an insured for life, during which the insured pays fixed premiums, accumulates savings from an invested portion of the premiums, and receives a guaranteed benefit upon death, to be paid to a named beneficiary. • Such a policy may provide that at a stated time, premiums will end or benefits will increase. — Also termed ordinary life insurance; straight life insurance. Cf. term life insurance.
[Blacks Law 8th]