Paying part of the death benefit while the insured is still living, for example after a terminal diagnosis.

The phase before payments start, when money goes into the annuity and grows.

An insurer authorized by the California Department of Insurance to transact insurance in the state.

The tendency of people with higher-than-average risk to buy and keep insurance more than others do.

A licensed person who sells insurance on behalf of an insurer.

A contract with an unequal exchange that depends on an uncertain event: the premiums paid may be far less or far more than the benefit received.

The person whose life the annuity payments are measured by, and usually the one who receives them.

The phase when the annuity turns its accumulated value into regular income payments.

A contract in which money paid to an insurer is returned as a stream of income payments, often for retirement.

The person who fills out and submits the application for insurance.

The person or entity that receives the death benefit when the insured dies.

A licensed person who arranges insurance with insurers on behalf of the client.

An agreement that the other owners or the business will buy an owner’s share at death or disability, often funded with life insurance.

The state agency that regulates insurance in California: it licenses producers, oversees insurers and protects consumers.

The savings portion that builds up inside a permanent life policy; the owner can borrow against it or take it by surrendering the policy.

In group insurance, the document given to each covered member describing their coverage.

Failing to disclose a material fact that one knows and ought to communicate.

The insurer must pay only if certain conditions are met, such as paying the premium and filing proof of loss.

The beneficiary who receives the death benefit if the primary beneficiary dies before the insured.

A contract written by the insurer alone, which the buyer can only accept or reject. Ambiguous wording is read against the insurer.

The money the insurer pays the beneficiary when the insured dies.

A party whose words or conduct led another to rely on them may not later assert a right that contradicts them.

The share of each annuity payment that is a return of principal and so is not taxed as income.

The amount of insurance stated in the policy, usually what is paid at death.

Someone who holds or handles money for another and must put that person’s interest first. Premiums an agent collects are fiduciary funds.

The time after receiving a policy when the owner may return it for a refund of premium, no reason needed.

The time after a premium is due during which it can still be paid and the policy stays in force.

Life insurance covering the members of a group, such as an employer’s workers, under one policy.

A condition that makes a loss more likely or more severe.

Once the policy has been in force for the stated period, the insurer can no longer deny a claim over misstatements on the application.

A financial stake in the insured person or property: the buyer would suffer a loss if the insured event happened. Without it, insurance cannot be bought.

The elected head of the California Department of Insurance, who enforces the state’s insurance laws.

The person whose life, health or property the policy covers.

The insurance company that takes on the risk and issues the policy.

Life insurance a business buys on an employee it depends on; the business owns the policy and is the beneficiary.

The end of a policy because the premium was not paid by the end of the grace period.

The more similar risks are pooled, the closer actual losses come to expected losses. Insurers rely on it to predict claims and set premiums.

In group insurance, the policy issued to the employer or other group sponsor.

A statement that is not true. If it concerns a material fact, the insurer may rescind the contract.

A life policy funded faster than federal tax law allows; withdrawals and loans from it get less favorable tax treatment.

A hazard that comes from dishonesty, such as causing a loss on purpose to collect.

Carelessness or indifference to loss because insurance is in place.

An insurer not authorized to transact insurance in California.

The ways a policyowner can use the cash value when premiums stop: take the cash, reduced paid-up insurance, or extended term insurance.

A policy whose owner shares in the insurer’s surplus through dividends.

The direct cause of a loss, such as fire, a collision or death.

A physical condition that raises the chance of loss, such as an illness, flammable material or an icy road.

A share of the insurer’s surplus returned to owners of participating policies. Not guaranteed, and treated as a return of excess premium.

The person who owns the policy and holds its rights, such as naming the beneficiary, surrendering it or borrowing from it. Not always the insured.

The money paid to the insurer in exchange for coverage.

The beneficiary first in line to receive the death benefit.

Insurance restores the insured to the financial position held before the loss, and no better.

Anyone licensed to sell insurance; the general word for agents and brokers.

A risk with only two outcomes, loss or no loss, and no chance of gain. Only pure risks are insurable.

Giving the buyer part of the commission or something else of value as an inducement to buy.

Putting a lapsed policy back in force within the allowed time by paying back premiums and proving insurability.

A transaction in which a new life or annuity contract takes the place of an existing one.

A statement the applicant makes on the application, true to the best of their knowledge.

A provision added to a policy to add or change coverage, usually for extra premium.

Swapping one life or annuity contract for another qualifying one under federal tax law, with no tax on the gain at the time.

Ways to receive the death benefit other than a lump sum: interest only, fixed period, fixed amount or life income.

The federal social insurance program that pays retirement, survivor and disability benefits.

A risk that can end in loss or in gain, such as gambling or buying stocks. Not insurable.

If the insured dies by suicide within the stated period after issue, the insurer refunds premiums instead of paying the death benefit.

A fee the insurer deducts for surrendering or withdrawing early, usually shrinking each year.

Life insurance that covers death during a set period only and builds no cash value.

Using false or misleading statements to get someone to drop an existing policy and buy another.

The insurer’s process of evaluating a risk and deciding whether to accept it, on what terms and at what rate.

Only the insurer makes a legally enforceable promise; the policyowner is not obliged to keep paying premiums.

Permanent life insurance with flexible premiums and an adjustable death benefit; cash value earns interest the insurer declares.

Both parties to an insurance contract must be honest and disclose every material fact.

Life insurance whose cash value sits in separate accounts and rises or falls with their investments; the policyowner bears the investment risk.

The sale of a life policy by a terminally or chronically ill owner to a third party for cash, at less than the death benefit.

Voluntarily giving up a known right.

A rider that keeps the policy in force without premiums while the insured is totally disabled.

A statement or promise made part of the policy that must be exactly true or strictly kept.

Life insurance that lasts for life, with level premiums and guaranteed cash value.