Pendwell Life/Glossary
50 terms, defined plainly, each linked to the playbook or tool that goes deeper.
The in-force policies an agent or agency services, together with the renewal commission they produce. It is the agency's client list and, commercially, usually its largest asset.
A spreadsheet extract of the book from an agency management system, with one row per policy or one row per client. Every analysis of the book starts from one.
Working the existing book for opportunities — term conversions, orphan policies, repricing, surrender expiries — instead of acquiring new leads. The client already bought once and the contact details are already on file.
An in-force policy whose writing agent has left, retired or was never replaced, so no producer is assigned to service it. Renewals may still be paid, but nobody contacts the client.
A licensed individual who sells and services insurance. In an agency, the person who owns the client relationship for a given policy.
The producer a carrier recognises as servicing a policy, and usually the one paid its commission.
Moving a policy to a different agent of record, normally through a form the policyholder signs and the carrier processes. Carriers set their own requirements.
Term life insurance whose premium stays fixed for a set number of years, commonly 10, 15, 20 or 30.
The span of years during which the premium is guaranteed not to change. Conversion deadlines and repricing are both measured against it.
What happens after the level period on many policies: coverage continues, but the premium re-rates each year, often at several times the level premium. Most clients respond by lapsing.
Exchanging a term policy for permanent coverage without new medical underwriting, under a right written into the term contract. The insured keeps the health class they originally qualified for.
The contractual right to convert. Not every term policy has one, and its limits vary by carrier, product and issue year.
The last date a policy can be converted. It is the earliest of the contract's limits — end of the level period, a convertible-years cap, or an attained-age cap — because the first limit reached ends the right.
A limit that ends the conversion right when the insured reaches a named age, often 65 or 70. Some contracts round it back to the policy anniversary before that birthday.
A limit that allows conversion only during the first several policy years — sometimes five or ten on a twenty-year product — which is why conversion rights often close well before the term ends.
The death benefit stated on the policy.
The date the policy took effect. The level period, conversion caps and surrender schedules are all measured from it.
The age a carrier uses to price a policy. Depending on the carrier it is calculated as age nearest birthday or age last birthday, and the two can differ by a year.
An age basis that rounds to the nearest birthday, so the insurance age rises roughly six months before the actual birthday. It is the date producers most often miss.
An age basis that uses the most recent birthday — age in the ordinary sense. The insurance age rises on the birthday itself.
The share of policies still in force after a period, commonly measured at 13 and 25 months. It drives renewal income, and carriers use it when setting contracts and bonuses.
A policy ending because the premium was not paid by the end of the grace period. Many lapses are accidents — a failed draft or a changed card — rather than decisions.
The window after a missed premium during which the policy stays in force. For life insurance it is often 30 or 31 days, set by the contract and state law.
Restoring a lapsed policy. Usually possible only within a limited period, and often requires back premium and new evidence of insurability.
Commission already paid that has to be returned because the policy lapsed or was cancelled within the period set in the commission schedule.
The years after purchase during which withdrawing more than the free amount triggers a surrender charge. When it ends, the contract can be moved without penalty.
A percentage fee on excess withdrawals during the surrender period, usually declining each year until it reaches zero.
The amount that can be taken out each year without a surrender charge — often 10% of the value, but set by the contract.
A tax-free exchange of one life insurance or annuity contract for another under Section 1035 of the Internal Revenue Code, when its conditions are met. Whether an exchange is suitable is a separate question from whether it is tax-free.
What the carrier pays the owner for surrendering a permanent policy: the accumulated cash value less any surrender charges and outstanding loans.
The sale of an in-force policy to a third party for more than its cash surrender value and less than its death benefit. The buyer pays the premiums and collects the benefit. Regulated at state level.
A settlement where the insured is terminally or chronically ill. It is regulated and taxed differently from a life settlement.
The price a third-party buyer would pay for a policy. It depends mainly on the insured's life expectancy and the cost of keeping the policy in force, and it is established by soliciting offers rather than by formula.
An organization between independent agents and carriers that holds carrier contracts, distributes commission and supplies support — appointments, case design, underwriting help, training. Paid through an override on your commission.
Usually the highest tier of a distribution hierarchy, contracting directly with carriers and distributing to IMOs and agencies beneath it. Carriers use the terms inconsistently.
Managing or brokerage general agency — typically more hands-on with case management, often regional or specialised by product.
Your share of the commission a carrier pays on a sale, expressed as a percentage of target premium, set by where you sit in the hierarchy.
The part of the commission on your sales taken by the organizations above you in the hierarchy. It is how an IMO or FMO is paid, and it never appears on an invoice.
Commission paid on a policy's first year of premium — normally the largest single payment it produces, and the figure acquisition cost has to be weighed against.
Commission paid in later policy years, usually at a much lower rate. It is what makes persistency valuable and a book of business worth something.
Permission for your carrier contract to move from one upline to another. Without a release, leaving an IMO can mean a period in which you cannot write with that carrier.
Whether, and on what schedule, your right to renewal commission survives after you leave a hierarchy or carrier. Set by the contract, and worth reading before signing.
What advertisers are bidding in Google Ads to appear above the search results, as reported in Google Keyword Planner. It is a floor on the price of a click, not a price anyone was charged.
What one visitor from a paid ad costs. A click is not a lead: only some fraction of clicks leave contact details.
Total media cost divided by the policies actually issued — the only acquisition figure that can be compared with a commission. It is the click price divided by the product of every conversion step between click and issue.
A lead sold to one agent only. More expensive than a shared lead, because no one else is calling the same person.
An older lead resold at a discount after its first sale window has passed. The price is lower because the prospect's interest, and often their contact details, are less current.
A prospect connected to the agent by phone in real time, usually after a call-centre screen. Priced well above a form-fill lead because contact has already been made.
Not advice. These are general definitions. Policy terms, carrier rules and state regulations vary, and the governing document is always the contract. Confirm anything you act on with the carrier.
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