Install
Beneficiaries and Claims terms
Naming beneficiaries, collecting the death benefit and finding forgotten policies.
Accelerated death benefitA policy feature that pays part of the life insurance payout early if the insured is terminally, chronically or critically ill, reducing what heirs get.Accidental death and dismemberment (AD&D)Coverage that pays only when an accident causes death or the loss of a limb, sight, speech or hearing; illness and most natural causes are not covered.AssignmentA written transfer of some or all rights in a life insurance policy to another person or entity, either permanently or as collateral for a loan.BeneficiaryThe person, trust, charity or estate named to receive a life insurance death benefit or an annuity's remaining value when the insured or owner dies.Beneficiary designationThe signed instruction on file with an insurer naming who receives a policy's proceeds, in what shares and in what order.Chronic illness riderA life insurance add-on that advances part of the payout if the insured can no longer perform basic daily activities or has severe cognitive impairment.ClaimantThe person or entity that files for a policy's benefits, usually a named beneficiary, executor or assignee after the insured's death.Contingent beneficiaryThe person or entity who receives life insurance proceeds only if every primary beneficiary has died or cannot accept the payment.Death benefitThe money a life insurance policy pays to the beneficiaries when the insured dies, usually the face amount adjusted for loans, riders and dividends.Death certificateThe official government record of a person's death, listing the date, place and cause; insurers need a certified copy to process a claim.Death Master FileThe Social Security Administration's database of reported deaths, which insurers check to find deceased policyholders and unpaid benefits.ExclusionA provision listing causes of death or circumstances a policy will not pay for, such as suicide in the first two years or certain aviation deaths.ExecutorThe person named in a will, or appointed by a court, to settle a deceased person's estate: gather assets, pay debts and taxes, and distribute what remains.Incontestability clauseA provision that bars the insurer from voiding coverage over application misstatements once it has been in force for two years during the insured's life.InsuredThe person whose life a policy covers, whose death triggers the payout, whether or not that person also owns the policy or pays its premiums.Interest-only settlement optionA payout choice in which the insurer holds the death benefit and pays the beneficiary only the interest it earns, leaving the principal for later.InterpleaderA lawsuit in which an insurer facing competing claims deposits the death benefit with a court and asks the judge to decide who should receive it.Irrevocable beneficiary designationA beneficiary choice the policy owner can't change or undo without that beneficiary's written consent, giving the beneficiary a vested interest.Life income settlement optionA payout choice that turns a death benefit into guaranteed payments for the rest of the beneficiary's life, sometimes with a minimum number of years.Lump-sum paymentReceiving an entire life insurance death benefit at once in a single payment, the most common way beneficiaries choose to be paid.Misstatement of age clauseA provision that adjusts the death benefit to what the premiums paid would have bought at the correct age or sex, instead of voiding coverage.PayorThe person or entity that pays a policy's premiums, who may be someone other than the owner, the insured or the beneficiary.Per capitaA way of dividing proceeds equally among the named beneficiaries still living at the insured's death, so a deceased one's share goes to the survivors.Per stirpesA way of splitting proceeds by family branch, so if a beneficiary dies before the insured, that person's share passes to their own descendants.Policy ownerThe person or entity that controls a life insurance contract: it names beneficiaries, pays premiums and can borrow against, assign or surrender it.Primary beneficiaryThe person, trust, charity or estate first in line to receive a life insurance death benefit when the insured dies.ProbateThe court-supervised process of validating a will, paying a deceased person's debts and distributing what's left, which life insurance usually avoids.Proof of deathThe documents a life insurer requires before paying a claim, usually a certified death certificate plus a completed claimant's statement.Revocable beneficiaryA beneficiary the policy owner can change or remove at any time without that person's consent, the default for most life policies.Settlement optionsThe ways a beneficiary or policy owner can receive life insurance proceeds: lump sum, installments, interest only or lifetime income.Special needs trustA trust that holds money for a person with a disability without disqualifying them from means-tested benefits such as SSI and Medicaid.Spendthrift clauseA policy or trust provision that keeps a beneficiary's future payments from being assigned, sold or seized by their creditors before they're paid.Suicide clauseA life insurance provision that limits the payout to a refund of premiums if the insured dies by suicide within an early period, usually two years.Unclaimed propertyMoney, including unpaid life insurance benefits, that a company couldn't deliver to its owner and must turn over to a state to hold until claimed.UTMA custodianAn adult who manages money, such as life insurance proceeds, for a minor under a state's Uniform Transfers to Minors Act until the child comes of age.