Terminology

A plan that provides retirement and long term disability income benefits to residents of Canadian provinces (excluding Quebec).

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.

Benefit that entitles a policy owner to an amount of money upon cancellation of a policy.

Insurance or insurability provided on current or future children of insured.

Request for payment of benefits under the terms of an insurance policy.

Person or party making request for payment of benefits under the terms of an insurance policy.

Canadian Life and Health Insurance Association.

Cost of living adjustment.

An agreement between a creditor and a borrower, where the creditor has loaned an amount to the borrower for business purposes.

Events that are possible, but may or may not happen. Premium rates and acceptance of certain risk are based on contingencies.

This is the principle, which specifies the factors that must be taken into account when calculating dividends. Depending on the insurance companies, the key factors are: interest earnings, mortality, and operating expense.

The act of changing from one type of life insurance policy to another, without having to give evidence of insurability.

The 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.

A lender or lending institution that offers financing and loans to a borrower, for the purpose of acquiring a commodity.

Coverage that provides a lump-sum payment should you become seriously ill with a specified illness. There are no restrictions on how you use your benefit.

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.

Account in which interest is accrued daily and credited to the account at the end of a specified time.

Amount paid on death of an insured.

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.

A flat amount that an insured must pay before the insurance company makes any benefit payments under a health insurance policy.

Inability to work due to injury or sickness.

Group Insurance designed to cover monthly obligations due to a borrower being unable to work due to sickness or injury.

Unlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company’s overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company’s earnings and surplus.

This policy governs an insurance company’s actions regarding distribution of dividends to policyholders. It’s goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.

The time it takes for a policy or annuity to reach maturity.

The time when a policy or annuity reaches the end of its span.

A low risk mutual fund that achieves greater liquidity by investing primarily in short-term securities.

The death rates for various age groups of the population.

Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.

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.

Two or more death benefits based on one definition with different insured’s.

A type of insurance policy or annuity in which the owner does not receive dividends.

The amount of money the company must spend on overhead, distribution, taxes, underwriting the risk and servicing the policy. It is a factor in calculating premium rates.

A type of insurance policy or annuity in which the owner receives dividends, typically increases the death.

A policy offers the potential of sharing in the success of an insurance company through the receipt of dividends.

Assets used to pay the pensions of retirees. An investment institution established to manage the assets used to pay the pensions of retirees.

A bank’s commitment to make loans to a borrower up to a specified maximum during a specific period, usually one year.

A written document that serves as evidence of insurance coverage and contains pertinent information about the benefits, coverage and owner, as well as its associated directives and obligations.

Yearly event linked to a policy. Usually the date issued.

Date on which the insurance company assumes responsibilities for the obligations outlined in a policy.

Administrative charge included in a Policy Premium

Period between two policy anniversaries.

The person who owns and holds all rights under the policy, including the power to name and change beneficiaries, make a policy loan, assign the policy to a financial institution as collateral for a loan, withdraw funds or surrender the policy.

Withdrawals generated by a company (with client’s permission) against a client’s bank account on a predetermined schedule for a predetermined amount.

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.

Used in older contracts to confer the same rights as an irrevocable beneficiary. Applied to family members.

Annual amount payable, by a client, for a selected product or service.

Annual or monthly amounts payable, by a client, for a selected insurance coverage to insure debt obligations to their creditors are protected.

Payment schedule of policy premiums, usually selected by the policy owner (monthly, quarterly, annually).

After 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.

Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.

The time period during which a policy is in force, or the time it takes for a policy to reach maturity.

Coverage that provides a lump-sum payment should you become terminally ill. The payment is made to your creditors to pay off your debt owing.

Cease all legal obligations under a contract.

A product that provides life coverage for a specified duration typically not beyond the age of 75.

Person that uses various types of evidence to evaluate the insurability of a client.

Evaluating and classifying potential risk of a client.

Premiums paid for coverage not yet provided.

An unbundled Life product with a separate investment component. It typically does not participate in companies profits.

Estimation of worth.

Date on which valuation occurs.

A form of annuity policy under which the amount of each benefit is not guaranteed or specified. The amounts fluctuate according to the earnings of a separate investment account.

A specific time that must pass following the onset of a covered disability before any benefits will be paid under a creditor disability policy. (Also known as an elimination period).

Removing liability or responsibility regarding a tangible event.

A benefit that allows an insurance company to pay premiums on behalf of the insured.

Component that provides life coverage during the insured’s life.