The following is a list of life settlement and viatical settlement industry terms used throughout this website. Definitions may vary from those used in certain states based on such states’ regulations.
Beneficiary - The party designated by the policy owner to receive the proceeds of a life insurance policy. This party may be one or more individuals, a trust, a corporation or other business entity.
Broker - An individual or company who acts on behalf of the seller of a life insurance policy. This intermediary owes a fiduciary duty to the seller of the policy, not to the life settlement provider or any other party associated with a life settlement transaction. (See also Policy Broker, Life Settlement Broker, Viatical Settlement Broker)
Broker-dealer - An individual or company whose primary business activity is the buying, selling or management of securities. Broker-deals are required to be registered with the NASD and comply with certain SEC regulations.
Carrier - An insurance company or issuer of insurance products. (See also Insurer, Insurance Company)
Cash Settlement - See “Life Settlements.”
Convertible Term - A type of term life insurance policy that includes a provision allowing the policy owner to exchange the policy for another type of life insurance policy issued by the same company.
Covered Life - The individual upon whose life is insured under a life insurance policy. The age, gender, smoking and other personal habits, income and medical history of the insured may all be considered in the decision made by the life insurance company as to whether or not to issue a policy. (See also Insured)
Financing Entity - A company or other business or legal entity that provides capital to a viatical or life settlement provider for the purpose of purchasing life insurance policies through viatical or life settlement transactions. Also known as a life settlement financing entity. (See also Investor, Institutional Investor)
Flexible Premium Adjustable Life - A type of life insurance policy that allows the policy owner to vary the amount of premiums payable, the death benefits and some other components of the policy without having to exchange the policy for a different policy.
Funder - A term used primarily by brokers in reference to a viatical or life settlement provider, which may also be used by some to refer to a financing entity.
Increasing Term - A type of term life insurance policy that provides a fixed death benefit payment for a specific period of time, typically one year, in exchange for a fixed premium payable for the same period. Generally the premium rises at the end of each term period also referred to as Annual Renewable Term. (See also Annual Renewable Term (ART), Level Term, Convertible Term)
Institutional Investor – An entity with large amounts to invest such as mutual funds, pension funds, investment banks, etc.
Insurance Company - A business that solicits, underwrites and issues contracts of insurance. (See also Carrier, Insurer)
Insured - The person covered by a life insurance policy. (See also Covered Life)
Insurer - An insurance company or issuer of insurance products. (See also Insurance Company, Carrier)
Investor - A financing entity or other business entity or person that provides capital to a life settlement provider for the purpose of purchasing a portfolio of life insurance policies as an investment. (See also Funder, Financing Entity)
Level Term - A type of term life insurance policy that provides a fixed death benefit for a period of time during which the premiums payable do not rise (i.e., 5, 10 or 15 years) and the death benefit remains constant over the same period.
Life Expectancy - An estimate of the number of months or years a given individual can be expected to live based on an evaluation of their age, gender, lifestyle and family/medical history. Life expectancy estimates or “LEs” are issued as part of a mortality report prepared by a medical underwriter.
Life Insurance Cash Settlement - See "Life Settlement."
Life Insurance Policy - A legal contract entered into between a life insurance company and the policy owner. The agreement provides for the payment by the company of a sum of money (the death benefit) to the beneficiary when the covered life (the insured) dies.
Life Insurance Settlement – See “Life Settlement.”
Life Insurance Viatical – See “Viatical.”
Life Settlement - The sale of a life insurance policy that covers the life of an individual whose life expectancy is limited and ascertainable based on age and/or medical history. (See also Viatical Settlement, Senior Settlement, Senior Life Settlement, Life Insurance Settlement)
Life Settlement Broker - A party who represents financial advisors, life insurance agents, insurance agencies and consumers with respect to the sale of life insurance policies in the secondary market. A life settlement broker is required to be licensed in many states and generally owes a fiduciary duty to the seller of a life insurance policy. Brokers do not represent life settlement providers. (See also Viatical Settlement Broker, Viatical/Life Settlement Company)
Life Settlement Co. - See “Life Settlement Provider.”
Life Settlement Provider - A company whose primary business activity involves purchasing life insurance policies through viatical or life settlement transactions. Life settlement providers may purchase policies for their own account or on behalf of financing entity clients. (See also Funder, Provider, Originator, Viatical Settlement Provider)
Life Settlements - Life insurance policies that have been sold in the secondary market. (See also Life Insurance Settlements, Senior Life Settlements, Viatical Settlements)
Life Settlor - The seller of a life insurance policy that is the subject of a life settlement. (See also Viator, Selling Policy Owner, Seller)
LISA - Acronym that stands for the Life Insurance Settlement Association, the largest and oldest life and viatical settlement industry group representing the life settlement industry. (See also “VLSAA - the Viatical and Life Settlement Association of America.”)
Medical Underwriter - An individual or company that reviews personal and medical information for the purpose of issuing mortality reports and related life expectancy estimates for use in life settlement transactions. Other terms used to describe these companies include LE Provider and Qualified Consulting Physician (QCP). (See also Life Expectancy Evaluator, Life Expectancy Estimator)
NAIC - Acronym that stands for the National Association of Insurance Commissioners, one of several insurance regulatory groups that promulgates model acts and other legislative and regulatory policies related to the insurance industry.
NASD - Acronym that stands for the National Association of Securities Dealers, a self-regulatory organization or “SRO” that regulates the securities industry.
NCOIL - Acronym that stands for the National Coalition of Insurance Legislators, one of several insurance regulatory groups that promulgates model acts and other legislative and regulatory policies related to the insurance industry.
Ordinary Life – See “Whole Life.”
Originator – A term used to refer to a Provider that purchases a portfolio of policies for a financing entity.
Policy Broker – See “Broker” above.
Policy Owner - The party who possesses and controls all of the rights and privileges granted by a life insurance policy, including the right to assign, transfer, surrender, sell or otherwise dispose of the policy. This party may be one or more individuals, a trust, corporation or other business entity.
Provider – See “Viatical Settlement Provider.”
SEC - Acronym that stands for the Securities and Exchange Commission, which regulates the securities industry.
Seller – See “Viator.”
Selling Policy Owner – See “Viator.”
Senior Life Insurance Settlement – See “Senior Settlement.”
Senior Life Settlement(s) – See “Senior Settlement.”
Senior Life Settlement Financing – See “Senior Settlement.”
Senior Settlement - The sale of a life insurance policy that covers the life of a “senior citizen” – someone age 65 or older. (See also Senior Life Settlement, Senior Life Insurance Settlement, Life Settlement)
Senior Settlements – See “Senior Settlement.”
SRO - Acronym that stands for Self Regulatory Organization.
Universal Life - A type of life insurance policy that has no fixed premiums or death benefits. (See also “Flexible Premium Adjustable Life.”)
Viatical - Derivation of the Latin term “via tecum,” which means “provisions for a journey.” May refer to the instrument created through the sale of a life insurance policy in exchange for a cash payment that is less than its death benefit. (See also Viaticals, Viatical Investment, Viatical Settlement)
Viatical Investment – See “Viatical Purchasers.”
Viatical Life Settlement – See “Life Settlement.”
Viatical Life Settlement Company - A business engaged in the secondary market for life insurance. This term is generic and may refer to either a viatical/life settlement broker or a viatical/life settlement provider. Brokers and providers play different roles in the secondary market and represent the interests of different parties in a life settlement transaction. (See also Life Settlement Provider, Viatical Settlement Provider, Life Settlement Broker, Viatical Settlement Broker)
Viatical Purchasers - Institutions or other investors who buy viatical and life settlements. These companies may also be referred to as “financing entities” or “life settlement investors.”
Viaticals - Life insurance policies which have been sold in the secondary market. Term may also refer to the assets created through the viatical settlement process. (See also Life Settlements, Senior Life Settlements, Life Insurance Settlements.)
Viatical Senior Settlements – See “Life Settlements.”
Viatical Settlement - The sale of a life insurance policy that covers the life of an individual whose life expectancy is limited and ascertainable due to a chronic, terminal, catastrophic or life-threatening illness. (See also Life Settlement, Viaticals.)
Viatical Settlement Broker - A party who represents financial advisors, life insurance agents, insurance agencies and consumers with respect to the sale of life insurance policies in the secondary market. A life settlement broker is required to be licensed in many states and generally owes a fiduciary duty to the seller of a life insurance policy. Brokers do not represent life settlement providers. (See also Viatical/Life Settlement Company.)
Viatical Settlement Provider - A company whose primary business activity involves purchasing life insurance policies through viatical or life settlement transactions. Life settlement providers may purchase policies for their own account or on behalf of financing entity clients. (See also Funder, Provider, Originator, Life Settlement Provider)
Viatical Life Settlement Broker - See “Broker” above.
Viatical Life Settlement Provider – See “Provider”.
Viator - The seller of a life insurance policy that is the subject of a viatical or life settlement. (See also Life Settlor, Selling Policy Owner, Seller)
VLSAA – Viatical and Life Settlment Association of America, now known as the Life Insurance Settlement Association or LISA, this is the oldest and largest trade association serving the life insurance settlement industry.
Whole Life - A type of life insurance policy that provides a fixed death benefit over the life of the insured in exchange for a fixed number and/or amount of premiums payable. (Also referred to as Ordinary Life.)
