Defintions and Key Terms
Underwriting: The process of insurance underwriters evaluating the risk and exposures of potential clients. They will decide how much coverage the client should receive, how much they should pay for it, and whether to accept the risk and insure them. Each company has a different set of guidelines that help them determine whether or not to take the risk.
Permanent Life Insurance: Typically, Whole Life or Universal Life Insurance where the policy accures a cash value and a lump sum is paid out at the end of the policy. Some policies may offer income at select policy years.
Annuity: Financial contract in the form of an insurance product in which the life insurance company makes a series of future payments to the annuitant in exchange for the immediate payment of a lump sum or series of regular payments, prior to the onset of the annuity.