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Glossary of terms

Understanding the language of financial services

When exploring Securian’s website or talking with your financial advisor, you may come across terms or phrases that are unfamiliar. We’ve provided some definitions to help as you learn and prepare to create your financial strategy.

  • 401(k): A retirement savings plan that employees contribute to either before or after paying income taxes.
  • Agreements: Optional benefits that can be added to a life insurance policy or annuity, also called riders. Agreements may be subject to additional costs and restrictions.
  • Annuitant: The person who receives annuity payment(s).
  • Annuity: An insurance product that provides guaranteed retirement income for a specified period of time, or until death.
  • Annuity owner: The person who owns an annuity contract, often the same person as the annuitant.
  • Beneficiary: A person or entity who receives the death proceeds of an insurance policy or annuity. Most insurance policies and annuities allow the owner to choose one or more beneficiaries.
  • Cap: The maximum growth – or upper limit – that may be credited to a life insurance indexed account.
  • Cash value: A portion of a premium payment that can grow tax-deferred and can be withdrawn or made available as a loan against a policy.
  • Claim: A request for payment of benefits based on the terms of an insurance policy.
  • Credit: The ability to obtain goods or services before payment, based on trust payment will be made in the future.
  • Death benefit: The money beneficiaries receive upon death of the insured.
  • Debt: Money that is owed or due.
  • Defined benefit plan: An employer-sponsored retirement plan in which benefits are based on factors such as employee length of service and salary earned at time of retirement.
  • Death benefit amount/face amount: The total amount of a life insurance policy’s benefits that would be paid to a beneficiary, designated in dollars. This amount may change based on the type of insurance and other factors.
  • Floor: The minimum growth rate or bottom limit that may be credited to a life insurance indexed account.
  • Guaranteed coverage/guaranteed issue: Insurance coverage that does not require health information; guaranteed approval for coverage.
  • Indexed accounts: Accounts that make up all or a portion of a life insurance policy’s cash value. Interest may be credited based on changes in the underlying indices.
  • Insured: The person, property or entity covered by an insurance policy.
  • Loan: Money that is borrowed and required to be paid back with interest.
  • Life insurance: A contract between and insurance policy holder and insurance company where the insurer promises to pay a designated beneficiary a sum of money in exchange for a premium upon the death of an insured person or when the insured reaches a specified age.
  • Policy: The written contract of insurance.
  • Policy loan: An amount you may borrow against a life insurance policy’s cash value. If the insured dies while there is a loan against the policy, the death benefit amount will be reduced by the amount of the loan and any unpaid policy loan interest.
  • Policyholder: A person or group who owns an insurance policy.
  • Premium: The payment(s) made to an insurance company in exchange for insurance coverage or an annuity.
  • Subaccounts: When you buy a variable insurance product, you allocate your premium payments to a separate account, which is made up of sub-accounts. A portion of your premium dollars are invested in the sub-accounts of your choosing. Sub-accounts are funds that may be comprised of stocks, bonds or money market instruments. Your cash value will fluctuate based on the investment performance of these funds. Variable subaccounts are subject to market risk, investment risk and loss of principal.
  • Trust: An arrangement in which property is held by one party for the benefit of another.
  • Underwriting: The process used by an insurance company to determine if an individual or entity meets the company’s risk acceptance and eligibility standards for the type and amount of insurance requested.