BU413 Chapter Notes - Chapter 10: Disability Insurance, Life Insurance, Income Approach
Document Summary
Life insurance is a means of financing the risk of the premature and untimely death of a family member. The loss of income due to the unanticipated death of a family member is an insupportable risk for most families as it would materially affect the family"s standard of living. Insured the person upon whose death the death benefit of the insurance policy will be paid. Beneficiary the person who receives the death benefit of the policy upon death of the insured. Death benefit (or face value) the dollar amount which will be paid to the beneficiary if insured dies. Premium the dollar amount that must be paid to the insurance company; may be payable in one lump sum, or periodically (monthly, quarterly, annually etc. ) Owner the person who pays the premiums; can be the insured, employer, or beneficiary. Policy term the period during which the insurance is in force (1 year to an entire lifetime)
