Collateral Borrower
Individual who assigns rights to a benefit. For example, a life insurance policy may be assigned as security for a loan made by the borrower. The policy protects the collateral creditor (assignee) if the borrower does not pay the loan when due. If a loan remains unpaid at the death of an insured, the loan balance is subtracted from the death benefit and paid to the creditor, with the balance going to the insured's beneficiary. On the other hand, if the insured (the borrower) does not pay the loan when due, the creditor can withdraw the amount due from the cash value of the policy. When a loan is repaid, the assignment ends and the policy owner is again vested with all rights to the policy.
Popular Insurance Terms
Computer system established by London trade associations for processing insurance policies. The work of LIMNET involves the notification and settlement of insurance policy claims. ...
Statistical function that displays the probability of determining a stated number of successes in a series of trials in which the probability of success is the same in each trial. In ...
Life insurance policy clause. If at the end of the grace period the premium due has not been paid, a policy loan will automatically be made from the policy's cash value to pay the premium. ...
Component of necessary coverage determined by the "needs approach" to life insurance for a family. It is intended to cover last-minute expenses as well as those that surface after the death ...
Plan whereby adjustments are made in the premium, as the premium increases to reflect the non proportionate increases in expenses. Generally, the expenses of acquisition costs, ...
Coverage under which initial premiums are less than normal for the first few years, then gradually increase for the next several years until they become level for the duration of the policy. ...
Statement in which a life insurance applicant is charged a higher-than-standard premium to reflect a unique impairment, occupation, or hobby, such as a history of heart disease or a circus ...
Type of coverage of property owned by one person at several locations, including merchandise, materials, fixtures, furniture, specified machinery, betterments, and improvements made by ...
Actuarial equivalent method of calculating the premium rate through the development of the following equation: probability that the event insured against occurs x face amount of policy x ...
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