Glossary

Target Premium
With flexible-premium life insurance policies, this is the recommended premium to help assure that the policy will not terminate.

Tax Deferral
Postponement of taxes on gain. With annuities and qualified retirement plans, earnings are tax-deferred until received.

Tax Free
Anything upon which no income tax is imposed, such as proceeds from a life insurance policy.

Taxpayer ID Number
Your Social Security number or tax identification number, which must be provided to a mutual fund company to avoid back-up withholding.

Tax-Qualified Plan
(See "Qualified Plan.")

Tax-Free Rollover
(See "Rollover.")

Tax-Sheltered Annuity (TSAs)
(See "Section 403(b) Plan.")

Ten-Day Free Look
A consumer protection right, the ten-day free look is the time period after an insurance policy's delivery to the insured when the policy can be reviewed by the consumer and if not satisfied for any reason, returned for a full refund of premiums paid. The policy is then considered void from the beginning.

1035 Exchange
Section 1035 of the Internal Revenue Code allows a tax-free exchange of one insurance policy or annuity for another of a similar type and value. See Replacement.

Term Conversion
The act of changing a convertible term life insurance policy to a cash value policy with the equivalent amount of coverage, without evidence of insurability. This locks in the premium rate and provides permanent coverage.

Term Insurance
Life insurance purchased for a limited period of time (such as one year, five years, ten years, etc.), after which coverage expires without value (or, if renewable, can be renewed for a higher premium). While the initial cost for term insurance is lower than that for a comparable permanent life insurance policy at a given age, the cost of coverage increases over time (while the premium for a permanent policy generally remains level).

Term to Age_______
A form of life insurance that continues until the insured reaches a specific age, such as 65.

Testate
Having left a will. (Also see "Intestate.")

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