Life Insurance Glossary and Terms | HSBC

 

Life insurance glossary

A

Accidental Death Benefit Rider
- An optional addition to your life insurance policy that pays a benefit to the beneficiary of a life insurance policy in addition to the death benefit should death be due to an accident.

Annuity
- A contract in which you pay premiums for a set period of time or until the annuity "matures", i.e., gains cash value, when you may then take distributions from the value either over a set length of time or until you pass on.



B

Beneficiary
- In a life insurance policy, the person or entity named to receive the death benefit.



C

Child Rider
- An optional addition to your life insurance policy that covers dependent children.

Claim
- A request for payment of the benefit of an insurance policy made by the policyholder or beneficiary.

Contestable Period
- A period of time where the insurance company can rescind a policy if it was obtained through misrepresentation or omission of information, or other similar situations, or deny a claim if excluded by the policy.

Contingent Beneficiary
- An alternate beneficiary listed on an insurance policy who will receive the benefit if the primary beneficiary is deceased. This is sometimes referred to as a "Secondary Beneficiary."

Coverage
- The total amount of protection provided by the policy including any optional riders for anyone insured under the policy.



D

Death benefit
- The amount of money to be paid to a beneficiary when the insured dies.

Dependent
- A person who relies on you for support.



E

Estate Fees
- Payments made to advisors, usually attorneys, to administer the transition of real property and assets from a decedent to an heir.

Examiner
- An employee of an insurance company responsible for reviewing and processing claims.



F

Funeral Costs
- Fees associated with the death and burial ceremonies of a person including things like a casket, grave stone, cemetery space, funeral home, religious official, flowers and other items.



I

Inheritance Tax
- A tax on a decedent's net estate that is levied after the estate is transmitted to the inheritors. This is sometimes referred to as the "Death Tax."

Insurance
- Coverage by contract whereby one party indemnifies another against a specified type of loss.



L

Lump Sum Payment
- A single payment - either payment for the total amount due to the beneficiary or a single premium paid to fully fund an insurance policy.



P

Permanent Insurance
- Life insurance that does not expire after a certain time limit - provides coverage for the entire lifetime of the insured.

Policy
- The contract between the insurance company and the insured which contains all the terms and conditions of the insurance arrangement.

Premium
- The price of an insurance policy, typically quoted on an annual, semi-annual, quarterly or monthly basis.



R

Rider
- An optional addendum to the insurance policy which can provide additional benefits under certain conditions.



S

Secondary Beneficiary
- An alternate beneficiary, listed on an insurance policy who will receive the benefit, if the primary beneficiary is deceased. This is sometimes referred to as a "Contingent Beneficiary."

Single Premium Life
- A type of permanent life insurance that requires only one premium payment and may earn cash value as long as the policy is in effect.



T

Term
- The length of time for which an insurance policy remains effective.

Term Life
- A type of life insurance that covers the insured for a specified period of time.



U

Universal Life
- A type of permanent life insurance where the premium and benefits are adjustable.



V

Variable Life
- A type of life insurance where the premium and benefits are adjustable and the policy holder may assign the premium payments to a specific and separate investment account, similar to a mutual fund.



W

Waiver of Premium (total disability) Rider
- A rider to an insurance policy providing that the policy and coverage will remain in effect for a specified period of time. In the event the insured becomes totally disabled during that time, the insured does not have to make premium payments.

Whole Life
- Life insurance which provides coverage for an individual's whole life, rather than a specified term. It includes a savings component, called cash value that builds over time and can be used for wealth accumulation.



Investment and certain insurance products, including annuities, are offered by HSBC Securities (USA) Inc. (HSI), member NYSE/FINRA/SIPC. In California, HSI conducts insurance business as HSBC Securities Insurance Services. License #: OE67746. HSI is an affiliate of HSBC Bank USA, N.A. Third party whole life, universal life and term life insurance products are offered through Insurance Agents of HSBC Insurance Agency (USA) Inc., which is a wholly-owned subsidiary of HSBC Bank USA, N.A. Products and services may vary by state and are not available in all states. California license #: OD36843.


Investment, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE

All decisions regarding the tax implications of your investment(s) should be made in connection with your independent tax advisor.

†† Investments, Annuity and Insurance Products:
ARE NOT A BANK DEPOSIT OR OBLIGATION OF THE BANK OR ANY OF ITS AFFILIATES ARE NOT FDIC INSURED ARE NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY ARE NOT GUARANTEED BY THE BANK OR ANY OF ITS AFFILIATES MAY LOSE VALUE
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