Canadian Life and Health Insurance Association Inc.

Glossary of Insurance Terms

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | R | S | T | U | V | W

A (top)
Accident and sickness insurance A type of insurance that makes a payment if you have an illness, are injured or die from an accident. It includes disability income insurance and accidental death and dismemberment insurance.
Accidental death and dismemberment insurance A type of insurance that makes a payment if you die from an accident or lose full or partial use of a limb, hearing or eyesight. You can buy this type of insurance on its own or add it to a life insurance policy.
Accidental death insurance A type of insurance that makes a payment if you die from an accident. You can buy accidental death insurance on its own or add it to a life insurance policy.

If you add it to a life insurance policy and die from an accident, your insurance company pays both the life insurance amount and the accidental death insurance amount.

When the amount of the accidental death insurance is equal to the amount of the life insurance, the amount payable is double the original amount of the life insurance policy, and is known as "double indemnity".
Actuary A person professionally trained in calculating the risks and costs of insurance.
Adjustable policy A type of insurance policy that allows the insurance company to make changes to the policy under certain conditions. Changes can include the amount of insurance, the premiums charged and the cash value.

Details of how the insurance company can make changes are listed in the policy.
Administrative services only (ASO) plan A type of group plan where the benefits are not insured. The plan sponsor (usually an employer) hires an outside firm (often a life and health insurance company) to administer their plan. The plan sponsor is responsible for providing the funds to pay claims.
Advisor A person who is licensed by a provincial or territorial regulator to sell life insurance, accident and sickness insurance, group insurance and segregated funds. Also called an agent or a broker.
Agent See "Advisor".
Annuitant Typically, the person who receives payments from an annuity. It can also refer to the policyholder and to the person on whose life the payments are based.
Annuity A contract that pays you income at regular intervals, typically monthly, in exchange for an upfront payment. The income can start right away, or at some set date in the future. Annuities are often used to provide retirement income.

The different types of annuities include:

  • a life annuity, which makes payments for as long as you live. A "joint life annuity" could make payments for as long as either you or your spouse lives.
  • an annuity certain, which makes payments for a specified number of years or to a specified age, regardless of whether you are alive throughout that period,
  • some combination of both.
Application An application is a formal request for insurance coverage. It provides information about you and the type and amount of insurance you want. The information you give the insurance company helps them decide if you meet their requirements and qualify for the insurance. In some cases, you have to answer a series of health questions. You may also have to undergo basic medical tests as part of your application.
Automatic premium loan A feature in a permanent life insurance policy that allows the insurance company to pay for overdue premiums by taking a loan against the policy (as long as it has a cash value). Paying for overdue premiums in this way prevents your policy from being cancelled (or lapsing).

(See "Non-forfeiture options".)
B (top)
Beneficiary The person you name to receive the payment from your insurance policy. In the case of life insurance, if you don't name a beneficiary, the payment goes to your estate.
Benefit The payment an insurance company makes when they approve an insurance claim.
Broker See "Advisor".
C (top)
Cash surrender value The amount your insurance company pays you when you cancel a permanent life insurance policy that has built up a cash value. The insurance company deducts any policy loans or overdue premiums from the cash surrender value before paying you.

(See "Cash value".)
Cash Value The cash amount that builds up in a permanent life insurance policy. You can take a loan against the cash value of your policy. If you cancel your policy, you get the cash value.

Whole life, variable life and universal life are types of life insurance that have cash value.

(See "Cash surrender value".)
Certificate of insurance
  1. A document that sets out the key features of the insurance under a group insurance plan. It lists things like the type and amount of coverage, categories of dependents, deductibles and coinsurance, limits and exclusions, and instructions for making a claim..
  2. A contract given to those who have insurance through a fraternal society.
Claim A formal request to an insurance company for payment of a benefit.
Claimant The person who makes a claim.
Coinsurance An arrangement in a health or dental insurance plan where you and the insurance company share the cost of the items covered. You usually pay a set percentage (e.g., 20% paid by you and 80% paid by the plan).
Contestability Contestability is the legal right of the insurance company to question (or 'contest') your insurance coverage. If the company finds that you gave incomplete or incorrect information when applying for the insurance, they will look at what impact the missing information would have had on their decision to insure you. If their decision would have been different, they may cancel your coverage and deny any claims.

Most policies have a two-year contestability period. After that, the company cannot contest your coverage except in the case of fraud (a deliberate misstatement of fact). An example of fraud is a smoker who states in their application that they're a non-smoker, to get a reduced premium.
Contingent Beneficiary If you choose to name more than one person to receive a benefit, you can name some to be primary and others to be secondary (also called contingent). Primary beneficiaries are first in line to receive benefits. Secondary beneficiaries only receive a benefit if no primary beneficiaries are alive when the benefit is paid.
Contract An insurance contract is the legal agreement with your insurance company that sets out the terms of your coverage. The contract usually includes your application, the policy, and any changes made later to the policy.
Conversion right A right that a policyholder has to exchange their policy for another one, without giving proof of good health. A common example is term insurance that can be exchanged for a permanent insurance policy. Another example is a group insurance plan where an employee plan member who leaves the plan can convert their group insurance to an individual insurance policy.
Coordination of benefits Families with two working adults may be covered by more than one health or dental plan. If your primary plan doesn't pay the full amount of an expense, you can submit a claim to the other plan for the balance. In this way, you can receive up to 100% of your expense.
Covered expenses See "Eligible expenses".
Creditor protection If you have unpaid debts, the people you owe the money to (your creditors) may legally have access to your other assets, such as property, investments or valuables, to pay off the debt. This may happen through your bankruptcy or other legal proceedings.

The funds in your insurance policies may be protected from creditors in certain circumstances. For example, if you make certain beneficiary designations or if the policy is registered (such as a registered retirement savings plan). However, the protection may not apply if you put your money into an insurance policy to avoid paying your creditors.
Creditor's group insurance A type of insurance that helps to pay down or pay off your loan or credit card or cover your payments in certain situations, such as if you die or become disabled. It can be offered through financial institutions, auto dealers, mortgage brokers, retailers, or credit card companies when you take on debt.
Critical illness insurance A type of insurance that pays you a lump sum if you are diagnosed with a serious illness such as cancer, heart disease requiring surgery, heart attack or stroke. The exact illnesses covered are listed in your policy. You can buy this type of insurance on its own or may be able to add it to a life insurance policy or group plan.
D (top)
Deductible Deductibles are common in health insurance plans. The deductible is the amount of a covered expense that you pay before your insurance company makes any payments. The deductibles apply to you and to any dependents covered under the plan. Examples might be $50 per person per year or $5 for each drug prescription.
Deferred annuity A contract that pays you income at regular intervals, starting at a future date. The date can be in a specified number of years or at a specified age.
Defined benefit pension plan A workplace pension plan that pays you a set benefit amount when you retire. Benefits are based on a formula that takes into account things like your salary, how long you were a member of the plan and how much you and your employer contributed to the pension plan.
Defined contribution pension plan A workplace pension plan where the amount you contribute is fixed but the benefit amount you receive on retirement is not. Your benefits are based on the amount you and your employer have contributed, plus investment earnings.
Dental insurance A type of insurance that provides coverage for dental expenses. It's usually provided as part of a group plan, but you can also buy it on its own.
Disability income insurance A type of insurance that makes regular payments (usually monthly) to replace income if you become disabled and unable to work. It's usually provided as part of a group plan, but you can also buy it on its own.
Dividend See "Policyholder dividend".
Double indemnity See "Accidental death insurance".
E (top)
Eligible expenses Expenses that are covered under a health or dental plan. Depending on the coverage provided, you may have to pay a share of the expenses.

(See "Deductible" and "Coinsurance".)
Eligibility period The length of time you must be a member of a group before qualifying for coverage under the group plan. For example, an organization whose health and dental plan has a 90-day eligibility period would require 90 days of qualified employment before coverage could begin.
Elimination period In disability insurance, you have to be continuously disabled for a certain amount of time before making a claim. This amount of time is the elimination period (sometimes referred to as a "waiting period"). You will not receive benefits for the elimination period.
Endowment insurance A type of life insurance that pays you a set amount if you live to the maturity date of your policy. If you die before that date, your insurance company pays the set amount to your beneficiary.
Evidence of insurability The information an insurance company uses to decide whether or not to insure you. It's often called "proof of good health". The information may include medical, lifestyle, smoking and other personal information.
Exclusions Things that are not covered by an insurance policy. They can include:

  • certain medical conditions you had before you applied for the insurance
  • high-risk activities such as sky-diving
You can sometimes buy extra insurance to pay for risks that would not otherwise be covered.
Exempt policy A life insurance policy where the savings growth does not exceed limits set under income tax law. In an exempt policy, the investment earnings on cash value are not subject to annual taxation.
Extended health care insurance A type of insurance that pays for hospital and medical expenses not covered by your provincial health plan. Expenses typically include prescription drugs and medicines, semi-private or private hospital rooms, ambulance services, and hospital and medical expenses you incur outside Canada. It can be part of a group plan or you can buy it on its own.
Extended term insurance An option in a permanent life insurance policy that allows you to extend the period you're covered without having to pay additional premiums. It uses the cash value in your policy but your insurance coverage stays the same. How long the policy continues depends on how much cash value is available.

(See "Non-forfeiture options".)
F (top)
Face amount Also called the sum insured, the face amount is the amount stated on your policy that your insurance company guarantees to pay when the insured person dies. It does not include amounts payable under accidental death coverage or other special provisions.
Financial needs analysis When you buy insurance, an advisor may help you decide how much insurance you need by completing a financial needs analysis. This looks at your current financial and personal situation and goals to help decide how much insurance you need. It can include things like taking care of dependents and paying off loans.
Flexible premium policy or annuity A type of life insurance policy or annuity contract where you can vary the amount of your premium payments and when you make them. For example, you can pay premiums for six months and then stop paying them for the next six months. There may be minimums and maximums that apply to your payments.
Fraternal society/Fraternal benefit society A not-for-profit organization that operates for fraternal, benevolent or religious purposes, including providing insurance to its members and their families.
G (top)
Grace period A period in which an insurance policy is effective even though the premium is past due.
Group annuity A workplace savings plan that provides a regular income, typically at retirement. Pension plans and group registered retirement savings plans often use group annuities.
Group insurance A type of insurance that provides coverage for a group of people (for example employees or members of an association) under one contract called a group plan or group policy.
Group policyholder An organization (for example an employer or association) that enters into a group insurance contract with an insurance company.

(See "Group insurance".)
Group registered retirement savings plan (GRRSP) See "Registered retirement savings plan".
Guaranteed death benefit The minimum amount an insurance company pays to the beneficiary when the insured person dies.
Guaranteed insurability benefit An option in a life insurance policy. It gives you the right to buy additional insurance coverage at set future ages without having to give proof of good health.

It's also called guaranteed insurability option (GIO).

(See "Evidence of insurability".)
Guaranteed maturity benefit The amount that your insurance company guarantees to pay you on the policy maturity date. This benefit is most common with segregated fund contracts.

(See "Maturity date".)
Guaranteed minimum withdrawal benefit (GMWB) An option within a segregated fund contract that guarantees to pay you a stated income as long as you live, or for a specified period, even if the cash surrender value of the contract drops. If the cash surrender value grows, then the income paid to you can increase.
Guaranteed renewable policies A feature of an individual insurance policy where the insurance company guarantees to renew the insurance at the end of a certain period, regardless of any changes in your health. Premiums may increase at renewal times.
H (top)
Health care spending account An arrangement in a group plan where the plan member gets a number of credits in an account. The member can use the credits to pay for health and dental expenses not covered elsewhere in their plan.
Health insurance A type of insurance that covers medical expenses (such as drugs, dental expenses, vision expenses) or loss of income if you're sick or injured. Types of health insurance include accident and sickness insurance, disability income insurance, and accidental death and dismemberment insurance.
Hospital expense insurance A feature of extended health care insurance that covers hospital expenses not covered by your provincial health plan during your stay in hospital. It can include the cost of private or semi-private hospital rooms and other prescribed hospital services.
Hospital indemnity A health insurance benefit that pays a flat amount for each day a covered person is in hospital. The number of days covered is set and the daily amount paid does not vary, regardless of the medical expenses the covered person incurs.

Also called Hospital cash plans.
I (top)
Illustration A document you may get from your advisor when you are thinking about buying insurance. It explains how the policy would work. It shows the costs and values of the policy under different conditions. It should also clearly show what's guaranteed and what's not. A policy illustration is for your information only and isn't part of a legal contract.
Immediate annuity An annuity product you buy with a single lump-sum payment and that starts paying a guaranteed amount almost immediately.
Impaired Annuity Someone who has a serious medical condition may qualify for an impaired life annuity. This means the amount they receive may be higher than a healthy person making the same purchase. The greater the severity of their condition, the shorter their life expectancy will be, so the annuity can pay a higher income.
Impaired risk In life and health insurance, a person who has physical or health problems, or who has a risky occupation or hobby, is known as an impaired risk. A person who presents an impaired risk may not qualify for coverage. If they do qualify they may pay higher premiums for their coverage. For example someone with a history of strokes would be an impaired risk.
Individual insurance Insurance you buy as an individual from an advisor or insurance company. This differs from group insurance, which you may have through your employer.

(See "Group insurance".)
Individual variable insurance contract A contract, usually an annuity, where your premiums are invested in segregated funds managed by the life insurance company. The value of the plan will vary over time based on the value of those investments.

These contracts guarantee to pay at least 75% of what you've paid into the plan on death or maturity, even if the investments are worth less.
Information folder The document your advisor gives you before you buy a segregated fund contract. It provides details about the contract and your investment options.
Insured See "Policyholder".
Insurer An insurance company that issues policies and promises to pay benefits.
Integration of benefits The process where an insurance company takes into account disability income you receive from other benefit plans, such as the Canada and Quebec Pension Plans, when determining your benefit amount.

For example, your insurance benefit will be "off-set", or reduced, by the amount of CPP benefits that you receive while disabled.
Irrevocable beneficiary A type of beneficiary designation where you need written permission from the beneficiary before changing the beneficiary or making certain other changes to your coverage under the policy.
J (top)
Joint and last survivor annuity See "Annuity".
K (top)
Key person insurance A type of insurance on the life of a key employee in a business. It's designed to provide cash to hire and train a replacement and replace lost revenues and profits, if the key employee dies.
L (top)
Lapsed policy An insurance policy that has ended because you stopped paying premiums and there was not enough money in the policy (cash value) to keep the payments up to date.
Level premium life insurance A type of life insurance where the premium you pay stays the same through the life of the policy.
Licence The official certification a provincial or territorial regulator gives an individual to show the individual is authorized to sell insurance.
Life annuity See "Annuity".
Life income fund (LIF) A type of retirement plan. If you leave a pension plan you may chose to transfer the value of your pension to a LIF.

At retirement, income payments from a LIF are subject to upper and lower limits each year, based on the amount in the account and the pension laws that apply to the LIF.
Life income option An option available to beneficiaries to receive their life insurance payout. With this option the insurance company pays the beneficiary regular, equal payments for as long as they live.
Life insurance A type of insurance that pays out when the insured person dies.
Life insured The person whose life is insured.
Locked-in A government restriction applied to a registered retirement savings plan or registered retirement income fund if amounts are transferred to that plan from a pension plan. It generally prevents withdrawals from the plan until you are 55 or older, and then limits any withdrawals so that the plan can be expected to provide a predictable income until age 90.

(See "Locked-in registered retirement savings plan", "Locked-in retirement income fund" and "Life income fund".)
Locked-in retirement account (LIRA) See "Locked-in registered retirement savings plan".
Locked-in retirement income fund (LRIF) A type of retirement plan similar to a life income fund. Not all provinces permit pension amounts to be transferred to both a life income fund and an LRIF.

(See "Life income fund".)
Locked-in registered retirement savings plan (Locked-in RRSP) A type of registered retirement savings plan containing funds transferred from a pension plan. You are generally unable to withdraw any amounts before age 55.
Long term care insurance A type of insurance that provides financial support for people who become unable to care for themselves because of a chronic illness or disability.
Long term disability insurance A type of group insurance that replaces part of your income if you become disabled and are unable to work. Long term disability often starts after short term disability ends and usually provides coverage for two or more years.
M (top)
Management and operating expenses ratio (MER) The MER is the portion of the segregated fund or mutual fund used for covering management and administrative expenses. For a segregated fund, the MER includes the basic guarantee cost. The MER is shown as a percentage of your fund.
Master policy See "Group insurance".
Master policyholder See "Group policyholder".
Material facts Information or a fact you're aware of that could affect an insurance company's decision about whether to insure you and at what cost. For example, if you're being checked for a medical condition when you're applying for insurance, you must tell the insurance company. If you don't, the company could cancel your policy and refuse to pay any claims.

(See "Contestability" and "Misrepresentation".)
Maturity date The date on which the insurance company pays a maturity benefit and the policy ends. For an endowment policy, annuity contract or segregated fund contract, the maturity date is a predetermined age or date.
Medical Information Bureau (MIB) A non-profit association of Canadian life and health insurance companies established to provide for the confidential sharing of information among its members. Member insurance companies use MIB's services to help assess an individual's risk and eligibility during the underwriting of life, health, disability income, critical illness, and long-term care insurance policies. Reports from MIB may alert insurance companies to applicants who have provided incomplete or false information, and help them fight insurance fraud.
Member A person who is covered under a group plan.
Misrepresentation A false or misleading statement an applicant makes when applying for insurance. An insurance company can cancel the policy if they find you gave them false or misleading information in your application.

(See "Material facts".)
Misstatement of age This happens when an insurance company is given the wrong age for the person insured. In some situations the insurance company can cancel the coverage when the wrong age is given. However, in many cases they adjust the coverage or premiums to take the correct age into account.
Mutual insurance company An insurance company owned by its policyholders (called participating policyholders). A mutual insurance company has no shareholders. Management is directed by an elected board.
N (top)
Non-cancellable and guaranteed renewable policy A type of insurance policy where the insurance company guarantees not to cancel the policy, increase the premiums or make changes to the policy until the insured person reaches a set age (usually 65). Typically, this involves disability insurance.

Also known as a non-cancellable policy.
Non-contributory pension plan A pension plan where the employee makes no contributions. The employer funds the entire cost of the plan.
Non-forfeiture options A feature of some permanent life insurance policies that provides the policyholder with choices if he or she stops paying premiums on a policy. Usually, the policyholder may choose one of the following:

  1. cash (cash value or cash surrender value),
  2. reduced paid-up amount of insurance,
  3. automatic premium loan to continue the full sum insured, or
  4. extended term insurance for the full sum insured over a specified period (not made available by all insurers).
Non-participating Insurance A policy that does not participate in the insurance company's distribution of earnings or dividends.
O (top)
Off-set See "Integration of benefits".
P (top)
Paid-up insurance Life insurance on which all the required premiums have been paid and coverage continues.
Partial disability benefit A disability benefit that pays a monthly amount that is less than a total disability benefit. In this situation, the insured person cannot work fulltime or is prevented from performing one or more important daily duties of his or her occupation, but is not considered totally disabled under the policy.
Participating insurance A type of insurance policy that pays the policyholder a share of the insurance company's earnings, or dividends.

(See "Policyholder dividends".)
Pension plan A workplace savings plan that provides a monthly income to you after retirement. Depending on the specific plan, you and your employer may contribute to the plan.
Permanent life insurance A type of life insurance that provides coverage for the lifetime of the person insured, provided the required premiums are paid. Permanent life insurance usually has a cash value. Whole life, Term to 100 and Universal Life are examples of this type of insurance.
Plan member The person insured under a group insurance or group benefit policy (for example, an employee, union member or association member). The member's spouse and dependents are not considered members.
Plan sponsor The owner of a group insurance or group benefit policy. It can be any organization that provides group benefits to its members, for example an employer, union or association.
Policy (Contract) The legal agreement between you and your insurance company that sets out the terms of your insurance coverage.
Policy loan A loan made by a life insurance company to a policyholder based on the policy's cash value. A policy loan reduces the cash value and the insurance company usually charges interest.
Policy reserves The pool of funds that an insurance company keeps specifically to meet its policy obligations. The law requires insurance companies to keep sufficient reserves to pay all future claims.
Policyholder The person who owns an insurance policy.
Policyholder dividend If you have a participating insurance policy, a policyholder dividend is a payment your insurance company makes to you when the company performs well. Dividends are not guaranteed -- they depend on things like the number of claims the company pays, how the company's investments perform and their level of expenses.

You can receive dividends in different ways:

  • cash,
  • leave them in the policy to accumulate,
  • use them to pay part of the premiums (thus reducing your insurance cost), or
  • use them to buy additional insurance.
Pooled registered pension plan (PRPP) A defined contribution pension plan designed for smaller workplaces and the self-employed. Your contributions, and any from your employer, are credited to your account. The funds in your account are pooled with other funds in the plan to achieve lower investment management and administrative costs. The plans are run by organizations that are licensed to administer the plan.
Pre-determination of benefits A claim procedure required by many group plans. For large expenses, such as major dental work, your plan may require you to obtain and submit an estimate of the costs so your insurer can determine what portion of the costs your plan will cover (called a pre-determination of benefits) before you receive treatment. You can then budget for the expense knowing how much your plan will pay and how much you'll have to pay. You may be able to cover some of your costs under your spouse's or partner's plan.
Pre-existing condition A medical condition for which you've had symptoms, consulted a medical professional or received treatment before you apply for insurance or before your coverage takes effect.

Some types of insurance have pre-existing condition clauses which may limit or exclude benefits if you make a claim related to that condition.
Premium The amount you pay to buy insurance. The premium is usually paid monthly, quarterly or annually. The amount of your premium may change over time.
Premium offset A payment arrangement where the insurance company uses policy dividends or cash value to pay for premiums.
R (top)
Rated policy An insurance policy where the insured person does not meet the company's standard insurance requirements (for example, because of a risky occupation). The policy has higher risks and therefore higher premiums.
Reduced paid-up insurance A form of paid-up life insurance available as a non-forfeiture option. The policy continues, but for a reduced amount.

(See "Non-forfeiture options".)
Registered education savings plan (RESP) A type of savings plan for your own, your child's or your grandchild's college or university education. No tax-deduction is provided for contributions. Payouts from the plan to the student are not taxed.
Registered pension plan (RPP) A workplace savings plan that provides a monthly income to you after retirement. Depending on the specific plan, you and your employer may contribute to the plan.

Pension plans are subject to regulation by the Canada Revenue Agency, and such plans are called "registered pension plans".
Registered retirement income fund (RRIF) A type of plan that provides a predictable - but not guaranteed - retirement income, starting at a set age (currently 72). Most people transfer their registered retirement savings plan savings into RRIFs or annuities.

(See "Locked-in retirement income fund".)
Registered retirement savings plan (RRSP) A type of retirement savings plan. The amount you can contribute to an RRSP is based on your income and is set by the federal government. The amount you contribute reduces the income tax you pay at the time, but you generally pay tax on any money you withdraw from the account.
Reinstating a policy You may apply to restart your insurance coverage if it ended because you did not pay your premiums. This process is called reinstating your policy. To do so you must apply within two years of the date the required premiums were not paid. You must also provide evidence of insurability and pay any outstanding costs, plus interest.
Reinsurance An agreement between insurance companies to share insurance risk. One company transfers some of its insurance risk to another company, known as the reinsurer. Reinsurance is one way your insurance company manages the risks it takes on.
Renewable term insurance A type of term life insurance that can be renewed at the end of the term, either automatically or at the policyholder's option, without evidence of insurability. The amount you pay for the insurance (the premium) is usually fixed and guaranteed not to change for the length of the term. When the insurance renews, the premium increases, based on your age.
Replacement The act of replacing an existing insurance policy with another policy. Since this means that the first policy is cancelled, the insurance company usually requires a written statement showing you understand the seriousness of making this change.
Rescission right The policyholder's right to cancel a policy within a set period of time and get a refund of any premiums paid. This "free look" period allows you to review the policy and ensure it meets your needs.
Revocable beneficiary A type of beneficiary designation. You can change a revocable beneficiary at any time.
Rider A change or addition to an insurance policy that either expands or limits the coverage and benefits.
Risk The likelihood that an insured event will happen while the policy is in place. For example, in life and health insurance, risk is typically the likelihood that the person insured will die, be injured or get sick.
S (top)
Segregated fund A pool of investments held by the life insurance company and managed separately (i.e. segregated) from its other investments. If you buy a variable insurance contract, sometimes called a segregated fund policy, the value of your policy varies according to the market value of the assets in the segregated funds.

(See "Individual variable insurance contract" and "Variable insurance contract".)
Settlement options The choices a beneficiary or policyholder may have for receiving payment of life insurance benefits, other than an immediate cash payment. For example, the beneficiary may choose to receive the benefit in the form of an annuity.
Short term disability insurance A type of insurance that replaces income for a short period of time when a person becomes disabled and is unable to work. If the disability continues, the person may be eligible for long term disability benefits, if they have that coverage.
Standard or statutory provisions The provisions in an insurance policy setting out certain rights and obligations that you and the insurance company have. These are required by provincial insurance laws.
Standard risk A person who qualifies to buy insurance at the company's regular premium rates.

(See "Rated policy" and "Impaired risk".)
Stock insurance company An insurance company that is listed on a stock exchange. The company's shares (or stocks) are owned by the shareholders.
Substandard risk See "Impaired risk".
Suicide clause A provision in a life insurance policy stating that benefits will not be paid if the person insured commits suicide or dies as a result of self-inflicted injuries.
Sum insured See "Face amount".
Supplementary health insurance See "Extended health care insurance".
Surrendered policy A policy you've asked your insurance company to cancel. If your policy has a cash value, you receive this amount when you cancel your policy.
T (top)
Tax free savings account (TFSA) A registered account you use to save money for any purpose. You do not get a tax deduction when you contribute to the plan. Investment earnings in the account are tax-free and you don't pay taxes when you withdraw money.
Term life insurance A type of life insurance that provides coverage for a set period of time. The period (or term) of the coverage can be either a fixed number of years or to a set age (e.g. age 65).

(See "Renewable term insurance".)
Term to 100 A type of permanent life insurance that provides coverage for your lifetime, as long as you pay the required premiums. The premium amount stays the same and you stop paying premiums after age 100. Typically, the policy has little or no cash value.
Travel insurance Insurance designed to pay for certain unexpected costs that may arise when you are travelling outside your home province or Canada. These costs may include emergency hospital and medical costs, trip cancellation and lost baggage. Some travel insurance coverage includes an accidental death benefit.
U (top)
Underwriting The process an insurance company goes through to decide whether or not to insure someone.
Uninsured plan See "Administrative services only (ASO) plan".
Universal life A type of permanent life insurance with flexible premium payments. It consists of two parts: life insurance and an investment account. You pay money into the investment account. The insurer takes premiums and other expenses from the account and pays any investment income into the account. You can increase or decrease your premiums and your death benefit within certain limitations. Earnings on the investment account may or may not be guaranteed depending on the type of investment chosen.
V (top)
Variable insurance contract A life insurance or annuity contract where benefits are not fixed but vary with the market value of a specified group of assets in which the premiums have been invested.

(See "Individual variable insurance contract". Also see "Group annuity", which may be a variable insurance contract.)
W (top)
Waiver of premium A feature of some insurance policies that allows you to stop paying the premiums if you become disabled.
Whole life insurance A type of permanent life insurance that provides coverage for your lifetime. It has fixed premiums, builds up a cash value, and has features that help keep your coverage in place if you can't pay the premiums.

(See "Non-forfeiture options".)