Definitions - Life Insurance Policy Provisions, Options and Riders (Chapter 4)

Question 1

Activities of daily living (ADLs)

Answer 1

a person’s essential activities that include bathing, dressing, eating, transferring, toileting, continence

Question 2

Assignment

Answer 2

transfer of rights of policy ownership

Question 3

Contingent beneficiary

Answer 3

a beneficiary who has second claim to the policy proceeds after the death of the insured (usually after the death of the primary beneficiary)

Question 4

NAIC

Answer 4

National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 5 U.S. territories, formed to resolve insurance regulatory issues

Question 5

Primary beneficiary

Answer 5

a beneficiary who has the first claim to the policy proceeds after the death of the insured

Question 6

Principal amount

Answer 6

the face value of the policy; the original amount invested before the earnings

Question 7

Trust

Answer 7

an arrangement in which funds or property are held by a person or corporation for the benefits of another person (trust beneficiary