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Insurance Glossary

Industry jargon and unfamiliar terminology can be confusing.

No insurance resource would be complete without a helpful menu of terms and concepts. This information-rich list will help you make sense of the solutions you are considering.

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0-9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z (ALL)

Refund of Premium Benefit

​A rider available with Long Term Care insurance policies. If a policyholder dies before a specified age with the LTCI policy in place, the beneficiary will receive a refund of premiums (minus any claims paid). The age requirement and refund formula vary among companies.

Reinstatement

The process of placing a previously terminated policy in force again. Typically requires proof of insurability and payment of missed premiums.

Required Minimum Distributions (RMDs)

​Minimum amounts that retirement plan account owners must withdraw annually beginning with the later of: the year he/she reaches age 70½ or the year he/she retires.

Residual Benefit

​A rider available with Disability insurance policies. A partial benefit paid when the insured person suffers a loss of income due to a covered disability or if loss of income persists. The insured receives a percentage of his or her disability benefit based on the percentage of income loss the sickness or injury has caused. It may be paid up to the maximum benefit period.

Restoration Benefit

​A rider available with Long Term Care insurance policies. If the insured has been on claim, then goes off claim and stays off claim for 180 consecutive days, the insurance company will resort the amount of benefits paid.

Revocable Trust

​A type of living trust, and an effective device to transfer assets directly to beneficiaries outside the probate estate, avoiding probate costs in estate settlement. Often considered a better vehicle than wills for ensuring individuals receive specific property. No income, estate, or gift tax savings exist under a revocable trust, and the transfer into the trust does not constitute a completed gift. Therefore, no gift tax is assessed, the trust property will be included in the taxable estate, and trust income is taxable to the grantor. Administration and management charges must also be paid, offsetting the savings generated from the formation of the trust.