Generally, added as a rider to a health or life insurance policy. It covers the unintentional death or dismemberment of the insured.
A sampling of helpful terms
Accidental death and dismemberment
Additional indemnity
Extra money payable to the beneficiary of a life insurance policy in the event of the insured’s death by accidental means.
Administrator
The person, bank or trust company appointed by the court to settle the estate of a person who did not leave a valid will or trust.
Advance health directive
An advance health directive, e.g., a living will, personal directive, advance health care or an advance decision, is a legal document in which a person specifies what actions should be taken for their health if they’re no longer able to make decisions for themselves because of illness or incapacity.
Annuity
A series of periodic payments.
A policy where an insurance company promises to make a series of periodic payments to a named individual in exchange for a premium or series of premiums.
Beneficiary
The person that the owner of an insurance policy names to receive the policy benefit.
Buy-sell agreement
A written agreement between the owner of a business and someone who has agreed to buy the business upon the owner’s death.
Claim
A request for payment under the terms of an insurance policy.
Covered worker
Under Social Security, a person who has worked long enough to be eligible for Social Security benefits.
Credit life insurance
Term life insurance that pays the balance due on a loan if the borrower dies before the loan is repaid.
Decedent
A person who has died. It’s typically the owner of the will, trust, policy, plan or account.
Estate taxes
Taxes imposed by the federal government and some state governments on the property of a person who has died.
Executor
The individual, bank or trust company appointed by the court to settle the estate of a person who left a valid will.
Face amount
The amount payable under a life insurance policy if the insured person dies while the policy is in force
Fixed installments
The insurer pays the beneficiary a fixed dollar amount in periodic installments for a specific number of years or until the principal and interest are paid out.
FTC Funeral Rule
A rule designed to allow people to compare prices of funeral providers over the phone.
Group insurance policy
An insurance policy issued to an organization that is purchasing insurance coverage for a specific group of people.
Individual insurance policy
An insurance policy issued to insure the life or health of a named person or persons.
Inheritance taxes
Taxes imposed by the state upon property distributed by a deceased person’s estate to the heirs.
Intestate
Dying without a valid will. There’s no valid will or trust to guide the distribution of an estate.
Joint and survivor
An annuity arrangement in which benefits can pass to another person after the policyholder’s death.
Life income option or annuity
The insurer pays the beneficiary a stipulated amount on a set date throughout the beneficiary’s life.
Long-term care insurance
Policies that reimburse policyholders a daily amount (up to a preselected limit) for services to assist them with activities of daily living, such as bathing, dressing or eating.
Lump sum payout
The beneficiary of a life insurance policy receives the entire death benefit in one single payment.
Medicaid
A federal-state public welfare medical assistance program administered by each state.
Medicare
A federal health insurance program for people with a disability or people age 65 or older.
Mortgage redemption insurance
Decreasing term life insurance that provides a death benefit amount corresponding to the decreasing amount owed on a mortgage.
Payout period
The period during which annuity benefit payments are made.
Pension
A lifetime monthly income benefit paid to an individual who has retired.
Probate
The court process by which a Will is proved valid or invalid. When an individual’s death occurs, the estate must go through probate, which is a process overseen by a probate court. If the individual leaves a will directing how their property should be distributed after death, the probate court must determine if it should be admitted to probate and given legal effect. If the decedent dies without leaving a will, the court appoints a Personal Representative to distribute the decedent’s property according to the law.
Proceeds
In a life insurance policy, the amount payable upon the death of the insured.
Security
A financial instrument that represents an ownership position in a publicly traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.
Settlement options
Ways a life insurance policy can be paid to the beneficiary.
Term life insurance
A type of life insurance that provides a death benefit if the insured dies during a specified period.
Travel accident insurance
A policy that provides financial protection against accidents or deaths that occur while traveling, whether domestically or internationally.
Trust
A relationship in which one person holds title to property, subject to an obligation to keep or use the property for the benefit of another. Trusts fall under state law.
Variable life insurance
Policies that reimburse policyholders a daily amount (up to a preselected limit) for services to assist them with activities of daily living, such as bathing, dressing or eating.
W-2 form
An annual report prepared by an employer for each employee showing gross earnings as well as taxes deducted during the year.
Whole life insurance
Life insurance that provides lifetime insurance coverage at a level premium rate that doesn’t increase as the insured person ages.
Worker's compensation
A form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue their employer for negligence.
Please note that this site is intended for reference only and does not provide a complete list of all resources or cover every possible situation you may encounter.
Provided content is for overview and informational purposes only and is not intended as tax, legal, fiduciary or investment advice.