A mutual fund is typically fashioned by an investment firm. The whole thing is publicized and the share holders are then encouraged to put their money in this mutual fund.

Get Technical with Your Life Insurance Policy: Definitions You Need to Know

We all know how utterly impossible it is to try to decipher legal documents! I sometimes think it would be easier to read a novel written by a chimpanzee ... and when it comes to necessary documents like your life insurance policy, it is no longer legally acceptable to have important documents that consumers cannot understand. The main way that life insurance policies have adjusted to cope with this requirement is the use of glossaries. Including a glossary means that specialist definitions don't have to be included in the main text of your policy ... but this does mean that you'll need to read the entire document rather than assuming you know the meaning of some common words. Today we check out some terms that may be defined differently in life insurance policies than in ordinary life. Make sure you read the back of your own policy for the definitions as understood in your particular life insurance policy!

Cancer

Every life insurance policy defines this differently. The definition usually includes a statement of the characteristics of a tumor, its Clark level, its depth of invasion, and its Gleason level.

Critical condition

Many of us assume that a critical condition is one that requires you to be in the intensive care ward. Your life insurance policy, however, may specify a range of 'critical conditions', like heart attack, paralysis, severe accidental injury or significant cognitive impairment, and exclude all others.

Heart attack

Surprisingly, there are actually degrees of heart attack, and it is possible to have one without realizing it. Your life insurance policy will specify the test results that are needed to classify the death of a portion of the heart muscle as an actual heart attack.

Non-smoker

Unfortunately, at least regarding your life insurance policy, you can't be considered a non-smoker until you've been tobacco-free for at least 12 months.

Policy owner

In Australia, it is possible for the policy owner and insured person to be different (for example, a company might take out life insurance on an important employee, or a wife to take out a policy on her husband).

Pre-existing condition

All life insurance policies need to disclose to them of any illness or symptoms for which you sought treatment ... or for which 'a reasonable person' would have sought treatment prior to application.

Act of war

Often defined as an 'act of aggression by a country, resisted by another country or organization'. Life is not always black and white ... but life insurance policy definitions need to be. Make sure you're familiar with yours!

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