Life Insurance and Life Settlement Glossary - D

Life Insurance and Life Settlement Terms - D

Death Benefit

The sum of money paid or due to be paid when a person insured under a term life insurance policy dies. This amount does not comprise adjustments for outstanding policy loans, dividends, paid-up additions, or late premium payments.

Death Claim

An appeal for payment under the terms of a life insurance policy.

Decreasing Term Life Insurance

A type of term life insurance in which the sum of coverage decreases during the term of coverage.


Part of a property or liability insurance policy that states the name and address of policyholder, property insured, its locality and description, the policy term, premiums and supplemental information.

Declined risk Class

In insurance underwriting, the group of proposed insured whose impairments or anticipated extra mortality are so vast that an insurer may not provide insurance coverage to them at an affordable cost. This is also called uninsurable class.

Decreasing Term Life Insurance

Term life insurance that gives a death benefit that diminishes in amount over the policy term.


A flat sum of covered medical expenses that an insured must incur prior to the insurer will make any benefit payments under a medical expense policy.

Deferred Premiums

Premiums that are outstanding after an insurer’s Annual Statement date but before the next policy anniversary.

Deferred annuity

An annuity contract also referred to as an investment annuity that is bought either with a single tax-deferred premium or with periodic tax-deferred premiums over time. Payments start at a predetermined point in time, like retirement. Money contributed to such an annuity is intended mainly to grow tax-deferred for future use.

Defined Benefit Plan

A retirement plan under which pension benefits are set in advance by a formula based generally on years of service to the concern multiplied by a specific percentage of wages, normally average earnings over that period or highest average earnings over the final years with the concern.

Defined Contribution Plan

An employee benefit plan under which the owner sets up benefit accounts and contributions are made to it by the employer and by the employee. The employer generally matches the employee’s contribution up to a stated limit.

Demand deposit

Consumer assets that are held in a checking account. Funds may be readily withdrawn by check, "on demand."


The method of converting a mutual insurance firm to a stock insurance firm.

Dependent Life Insurance

Group life insurance made available to group members, normally on an optional and contributory basis, to cover the spouse, children, or other dependents of the group member. It is generally sold in small amounts which are intended to disburse funeral expenses.

Depository Institution

Financial institutions that get their funds mainly through deposits from the public. They comprise commercial banks, savings and loan associations, savings banks and credit unions.

Deposit Term Life Insurance

A kind of level term life insurance that requires a considerably larger premium payment in the first year than the amount of level annual premiums payable in subsequent years.


In insurance, reducing regulatory control over insurance rates and forms. Commercial insurance for businesses of a certain size has been deregulated in many states.


Contracts that derive their value from an underlying financial asset, like publicly traded securities and foreign currencies. Frequently used as a hedge against changes in value.

Deferred Premium

The outstanding and yet undue premiums on Life Insurance, paid on other than an annual premium basis.

Deposit Premium

The premium deposit paid by a potential policyholder when an application is made for an insurance policy. It is generally equal to at least the first month's estimated premium and is applied toward the total policy premium when billed.

Difference in Conditions

Policy designed to fill up the gaps in a business’s commercial property insurance coverage. There is no standard policy. Policies are particularly tailored to the policyholder’s requirements.

Diminution Of Value

The idea that a vehicle loses amount after it has been damaged in an accident and repaired.

Direct Insurer

In a reinsurance transaction, the insurer that buys reinsurance to cover fully or part of those risks that it does not wish to retain in full. This is also known as direct insurer, direct writer, or direct-writing company.

Direct Premiums

Property/casualty premiums collected by the insurer from policyholders, prior to reinsurance premiums are deducted. Insurers share few direct premiums and the risk entailed with their reinsurers.

Direct Sales/Direct response

Process of selling insurance directly to the insured through an insurance company’s own employees, via mail, through telephone or via the Internet. This is in lieu of using captive or exclusive agents.

Direct Writers

Insurance companies that sell directly to the public using exclusive agents or their own employees, via the mail, by telephone or via the Internet. Big insurers, whether predominately direct writers or agency concerns are increasingly using a lot of different channels to sell insurance.

Directors Officers Liability & Insurance/D&O

Directors and officers liability insurance (D&O) covers directors and officers of a concern for negligent acts or omissions and for misleading statements that result in suits against the company. There are a range of D&O coverages.

Disability Income Insurance

A kind of health insurance designed to compensate an insured person for a portion of the income lost as of a disabling injury or illness. Benefit payments are made either weekly or monthly for a particular period during the continuance of an insured’s disability


Inability to work due to an injury or sickness.

Disability Benefits

The benefit to be paid under a Disability Income policy or a provision of some other policy, like a Life Insurance contract.

Disability Insurance

A kind of policy which gives income benefits to the insured if he or she becomes ill or is injured and can no longer work. It is also known as disability income insurance. Disabled” is generally defined in terms of inability to work.

Disability Buy-Out Insurance

Insurance that provides cash funds to a business or professional partnership so that the business interests of a completely disabled partner or stockholder may be bought if the disability is long-term or enduring.

Disability Income benefit

A supplementary life insurance policy benefit that gives a monthly income benefit to a policyowner-insured who becomes totally disabled.

Disability Income Insurance

A kind of health insurance designed to compensate insured people for a portion of the income they lose as of a disabling injury or illness.

Dividend Accumulations

Sums that result when a policyowner decides to leave policy dividends on deposit with an insurer.

Dividend Options

Several alternatives that partaking policy owners can choose from to point out the manner in which they want to receive their share of the insurance company’s divisible surplus.


A return of part of the premium on participating insurance that is based on the insurer's investment, mortality and expense know-how. Dividends are not certain.

Disability Waiver

A feature in few life insurance policies that keeps the policy in force but excuses the payment of premiums if the insured is totally disabled. This augments the sum of a policy in a life settlement transaction.

Double Indemnity Benefit

An accidental death benefit that is equal to the face value of a life insurance policy’s basic death benefit and is remunerated when the insured’s death is the result of an accident as defined in the policy.

Dread Disease Coverage

A kind of health insurance coverage that gives benefits for the diagnosis and treatment of a in particular named disease or diseases, like cancer. Contrast with critical illness (CI) insurance.