Categories: Life Insurance | Long Term Care | Money/Divorce | Retirement Planning

Life Insurance Definitions
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Beneficiary
The person(s) named in the policy to receive the life insurance proceeds upon the death of the insured.
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Cash (Surrender) Value
The amount that is available in cash for loans and that may be available for withdrawals. Accessing Cash Surrender Value may reduce the death benefit and may increase the risk of lapse.
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Convertible Term Insurance
Term insurance which can be exchanged (converted), at the option of the policyowner and without evidence of insurability, for a permanent insurance policy.
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Face Amount
The amount stated on the face of the policy that will be paid in case of death. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.
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Insurability
Acceptability to the company of an applicant for insurance.
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Insured or Insured Life
The person on whose life the policy is issued.
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Level Premium (Life Insurance)
Life insurance for which the premium remains the same from year to year. The premium is normally more than the actual cost of protection during the earlier years of the policy and less than the actual cost in the later years. The building of a reserve is a natural result of level premiums. The payments in the early years, together with the interest that is to be earned, serves to balance out the underpayment of the later years.
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Loan (Policy Loan)
A loan made by a life insurance company from its general funds to a policyowner on the security of the cash value of a policy.
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Paid-up Insurance
Insurance that will remain in force with no need to pay additional premiums.
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Permanent (Life Insurance)
Any form of life insurance except term; generally insurance that builds up a cash value, such as Whole Life, Universal Life, Variable Life, Indexed Equity Life.
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Policyowner
The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.
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Premiums
Payments to the insurance company to buy a policy and to keep it in force.
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Renewable Term Insurance
Term insurance which can be renewed at the end of the term, at the option of the policyowner and without evidence of insurability, for a limited number of successive terms. The rates generally increase at each renewal as the age of the insured increases.
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Term Life Insurance
Life insurance that does not build up cash value and where the premium normally increases as the insured gets older.
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Universal Life Insurance
A flexible premium life insurance policy under which the policyowner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates which may change from time to time.
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Whole Life Insurance
A basic type of permanent life insurance which can provide lifetime protection at a level premium. Premiums must generally be paid for as long as the policy is in force.
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Long Term Care Definitions
Care | Facilities | Benefit Triggers | Policy Benefits | Government Assistance Programs

Types of Care
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Skilled Care
Provided for medical conditions and by skilled medical personnel, such as registered nurses or professional therapists. Skilled care is usually provided 24 hours a day, is ordered by a physician, and involves a treatment plan.

Intermediate Care
Same activities as skilled care, but not administered on a daily basis.

Custodial Care
Assistance for people who can no longer take basic care of themselves, including assistance with bathing, eating, dressing, toileting, continence and transferring.

Home Health Care
Provides skilled or unskilled services at home.

Types of Facilities
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Nursing Home
Provides full-time care in a dedicated facility.

Assisted Living Facility
Residential facility that provides a home like atmosphere which provides continued care for those unable to perform simple activities of daily living.

Adult Day Care
Community-based, daytime supervision providing social, recreational, or health assistance at home or at a day care facility during work hours.

Benefit Triggers
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Receiving Benefits
Benefits are paid when one is “unable to perform two of the six activities for daily living”.

6 Activities for Daily Living
Continence, Toileting, Transferrence, Dressing, Eating, Bathing, Cognitive Impairment.

Continence
Ability to control ones bladder and bowel movements.

Toileting
Ability to use a toilet and perform associated personal hygiene.

Transference
Ability to move oneself into or out of a bed or chair.

Dressing
Clothe oneself.

Eating
Feed oneself.

Bathing
Bathe oneself.

Cognitive Impairment
Any mental condition requiring substantial supervision to protect the individual's health and safety (e.g., Alzheimer's)

Policy Benefits and Triggers
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Daily Benefit
The maximum daily amount your insurance coverage will provide toward the cost of long-term care.

Benefit Cap
Maximum benefit amount available under a policy, calculated by multiplying the maximum daily benefit by the total length of coverage.

Elimination Period
A waiting period between acceptance of a claim and the commencement of benefits. A longer elimination period will result in lower premiums.

Free-Look Period
10 days for individuals under age 65 and a 30 day period for individuals over 65 after purchasing insurance during which you may cancel for a full refund of your premium.

Inflation Adjustment
Helps benefits keep pace with inflation by increasing them annually by five percent on a simple or compounded basis.

Non-forfeiture Provision
Provides reduced benefits if premium payments are stopped after three years.

* Note – Definitions will vary slightly among providers. Consult with an insurance agent or financial advisor before purchasing long-term care insurance.

Government Assistance Programs
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Medicaid
Pays for long-term maintenance care but there are strict financial qualifications that must be met to receive this aide.

Medicare
Provides skilled care for periods of up to 100 days if certain medical requirements are met.

Money/Divorce Definitions
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Alimony
Financial support paid to one spouse from the other. May be paid in one lump sum or in installments. It can be temporary or permanent. (see spousal support section)
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Assets
Cash, property and investments along with anything else that may be of value to a individual or business.
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Award
A decision made by a court to compensate a person for something.
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Child Support
The money the non - custodial parent pays to the custodial parent to help pay for the needs of the child.
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Child Support Guidelines
A series of mathematical formulas that help derive the proper amount of child support that should be awarded.
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Child Support Worksheet
A court form devised to calculate the child support guidelines.
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Community Property
All income or property that was acquired during the marriage, with exception to gifts or inheritances.
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Equity
The net proceeds from the sale of a home, minus the fees of the solicitor and the real estate agent and the satisfying of the mortgage.
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Health Insurance Order
A court order that instructs the non - custodial parent to purchase health and dental insurance for the children and to add them to the policy.
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Income and Expense Declaration
The form completed by a parent under oath stating that parent's income, assets, expenses and liabilities. the document is used to help determine child support to be paid by the non - custodial parent.
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Joint Legal Custody
A form of custody of minor children in which the parents share the responsibilities and major decision-making related to the child. (see child custody section).
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Joint Physical Custody
A form of custody of minor children in which the parents share the actual physical custody of the child. (see child custody section in your state).
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Joint Property
Property that is held in the name of more than one person.
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Liquidation Value
The price that an owner is compelled to accept when a property must be sold without reasonable market exposure.
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Lump - Sum Alimony
A spousal support that is ordered to be paid in a fixed amount.
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Marital Property
Property that is acquired by the spouses during the marriage. It typically does not include any property owned prior to marriage.
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Marital Settlement Agreement
A written agreement entered into by the spouses getting divorced stating their rights and agreements pertaining to property, support and custody.
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Military Allotment
A deduction of child support from the salary of a noncustodial parent on active duty in the united states military.
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Palimony
Support paid from one person to another even though they were never married.
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Postnuptial
A written contract between husband and wife that states all of their present and future rights in view of their impending divorce.
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Prenuptial Agreement
A legal contract signed by two people before they get married. It typically involves limitations on a spouse's rights to property, support, and inheritance upon divorce.
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Present Value
The value of a future payment or series of future payments discounted to the current date or to time period zero.
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Qualified Domestic Relations Order
(QDRO) a court ruling stating that a portion of one spouse's pension be awarded to the other spouse as part of the equitable distribution of the marital assets. ( see QDRO rules in your state).
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Quit claim
To release legal claim. Iit is a document relinquishing claim, as in a quit claim to the deed to the marital house.
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Real Estate
Physical land and appurtenances affixed to the land.
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Real Property
All interests, benefits, and rights inherent in the ownership of physical real estate.
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Registry
The entity through which the court receives and disburses money, as in child support payments.
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Rehabilitative Alimony
Alimony intended to help the exspouse become financial self sufficient.
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Separate Property
Property considered to be owned by one spouse prior to marriage, which in most states in not up for distribution upon divorce.
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Setoff
A debt or financial obligation of one spouse that the court weighs against a debt or financial obligation of the other spouse.
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Spousal Support
Money paid from one spouse to the other in one lump sum or in installments for a period of time. there are many factors considered. (see spousal support section in your state).
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Support
Payment for housing, food, clothing etc.
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Tax Intercept
The process by which a child support judgment debtor's federal and state income tax refunds are diverted to pay a support arrearage.
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URESA (uniform reciprocal enforcement of support act)
The statute which enables one state to request assistance from another state in establishing or enforcing a child support order against a parent located in the other state.
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Wage Assignment or Wage Withholding
A court order requiring the employer of a noncustodial parent to deduct a specific amount of money for child support from the wages of the noncustodial parent (also known as garnishment).
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Retirement Planning Definitions

Annuity
A contract between a person and an insurance company where the person invests a specified amount for the annuity. In return, the person will receive payments in the future for the stated period of time in the annuity contract. There are several types of annuities and they are meant to insure that an investor never outlives their income.
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401k
A retirement plan that allows employees to make contributions of pre-tax dollars to a company plan that is then invested in money markets or mutual funds.
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403B
A retirement plan available to employees of public schools, non-profit organizations, and educational institutions.
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Capital Gain
There are two types: long term and short term.
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Estate Plan
A plan whereby an individual analyzes his/her assets and liabilities, manages them effectively, and arranges for their disposal at death to best serve the needs of the beneficiaries.
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Equity
The dollar value of property owned by an individual less any mortgage on the property. It is also the difference between fair market value and current indebtedness.
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Investment
Any asset or item with value that is purchased for the purpose of generating income or capital appreciation.
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IRA
A retirement investing tool for employed individuals and their non-working spouses that allows annual contributions up to a specified maximum amount. Whether or not a tax deduction is allowed depends on the individuals income and whether or not they participate in an employer-sponsored retirement plan.
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Irrevocable Life Insurance Trust (ILIT)
An irrevocable trust can be structured to purchase life insurance on your life and provide estate tax-free funds for heirs at your death. Your family may use these life insurance proceeds to purchase assets from your estate (perhaps to transfer a family business under a prearranged buy-sell agreement) or to simply provide liquidity to pay estate taxes. This ensures that the life insurance proceeds are not included in your taxable estate.
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Mutual Fund
An investment tool that allows investors to participate in a diversified portfolio with other investors. A company collects the funds of several investors and then uses the funds in a variety of investments. Each investor shares in the gains and/or losses.
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Rollover
When you are moving funds from one qualified plan to another without taking posession of the money.
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Roth IRA
A tax-deferred retirement account where the contributions are not tax deductible. Growth is tax deferred and there is also no tax on the withdrawals as long as the taxpayer is over 59 1/2 and the account has been open for five years.
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SEP
A Simplified Employee Pension plan is a retirement plan for self-employed or small business owners. A SEP allows taxes to be deferred on investments intended for retirement.
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Social Security
Social Security is a US federal benefits program that includes retirement benefits, disability income, veteran's pension plus other benefits. Employees and employers contribute to this fund through taxes equally levied.
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Stocks
Instruments that signify an ownership or equity in a company. These are purchased as shares whose value can increase or decrease as the value of the company's assets increase or decrease.
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Tax Deferred
Income whose taxes can be posponed until a later date. Traditional IRAs, 401(k), annuities, real estate investment trust (REIT) and equipment leasing are all examples of investments that can be tax-deferred.
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Traditional IRA
A traditional IRA is an Individual Retirement Account where the income generated is tax-deferred until withdrawn. Your original contribution may or may not be tax deductible, depending upon your specific circumstances.
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Trust
A legal relationship where one person holds title to property or assets for the benefit of another person. The owner of the property for the purpose of administering or distributing such property creates this trust.
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Will
A legal document describing how a person wants his/her property distributed after death. This document also designates and executor and may include funeral and burial instructions.
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College Funding Definitions
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Coverdell ESA
A tax-advantaged savings vehicle that lets you save money for the qualified education expenses of a named beneficiary, such as a child or grandchild. Qualified education expenses include college expenses and certain elementary and secondary school expenses.
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529 plans
Tax-advantaged savings vehicles that let you save money for the college expenses of a named beneficiary, such as a child or grandchild. There are two types of 529 plans--state savings plans and prepaid tuition plans. A state savings plan lets you save money in an individual investment account. A prepaid tuition plan pools your contributions with those of other investors and allows you to prepay the cost of college at today's prices for use in the future.
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