This document defines key terms related to life insurance. It explains that life insurance is a contract where one party agrees to compensate another for a specified loss, such as death. The beneficiary is the person named to receive life insurance proceeds. Premiums are the amounts paid for an insurance contract. The document also outlines the main types of life insurance companies, including stock companies that pay dividends to shareholders, mutual companies that return dividends to policyholders, and fraternal companies that receive tax benefits for charitable affiliations.

1. The Guardian Life Insurance Company of America 7 Hanover Square, New York, NY 10004 BASICS #1 LIFE INSURANCE

2. Insure: DEFINITIONS : To make certain , especially by taking necessary measures and precautions.

3. LIFE INSURANCE BASICS DEFINITIONS: Insurance: Coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril, or, the means of eliminating or reducing the financial burden of risk by dividing the losses they produce among many individuals.

4. LIFE INSURANCE BASICS DEFINITIONS: Indemnify: To make compensation for incurred hurt, loss, or damage.

5. LIFE INSURANCE BASICS DEFINITIONS: Life Insurance Insurance providing for payment of a stipulated sum to a designated beneficiary upon death of the insured .

6. Beneficiary : LIFE INSURANCE BASICS DEFINITIONS: The person named to receive proceeds or benefits.

7. Risk Management: LIFE INSURANCE BASICS DEFINITIONS: The use of all the alternative methods of dealing with risk ... - waiving of liability or exercising insurance to indemnify transfer of risk - conscious act of keeping or assuming risk retention of risk reduction of risk avoidance of risk

8. Premium : LIFE INSURANCE BASICS DEFINITIONS: Consideration paid for a contract of of insurance.

9. Consideration : LIFE INSURANCE BASICS DEFINITIONS: An act, or the promise thereof done or given by one party in return for the act or promise of another.

10. Policy Dividends: LIFE INSURANCE BASICS DEFINITIONS: Return of unneeded premium , and are not subject to income taxation.

11. Proceeds : LIFE INSURANCE BASICS DEFINITIONS: - at death of the insured (under any payout arrangement) To Beneficiary - or at election of income settlement option - at surrender of policy To Insured Amount of benefits paid out

12. Common Types of Profit-seeking insurers or "stock" companies LIFE INSURANCE COMPANIES Policies sold are fixed-price, non-participating (non-par) policies, i.e. no dividends paid to policyholders. Pay dividends to stockholders after payment of claims, expenses, and “possible ” provisions for additions to surplus Owned by stockholders who provided original capital or who acquired stock from other stockholders

13. STOCK COMPANIES (Non-Participating) Stock Company Stockholders receive common stock dividends (profit goes to stockholders) No dividends paid to policyholders Stock Policy

14. Common Types of Non-Profit insurers or “mutual" companies LIFE INSURANCE COMPANIES Dividends are paid to policyholders No capital stock, no stockholders, owned by policyholders

15. MUTUAL COMPANIES (Participating) Mutual Company Policyholders receive policy dividends (return of excess premium) Policyholders are the owners of the company Policy

16. Common Types of Fraternal Benefit Societies LIFE INSURANCE COMPANIES Receive tax benefits because they operate for the benefit of a charitable or religious affiliation. Operate for the benefit of a narrow, defined group Similar to mutual companies in design

17. FRATERNAL COMPANIES (Participating) Fraternal Company Policyholders receive policy dividends (return of excess premium) Company receives tax benefits: operates for the benefit of a charitable or religious affiliation Grand Poo-Bah International Brotherhood of Water Buffalo IBWB Policy

18. The Guardian Life Insurance Company of America 7 Hanover Square, New York, NY 10004 See Different Types of Life Insurance Covered In BASICS #2 LIFE INSURANCE