The I&E Wiki
Insurance and estate planning, explained in plain English.
The industry hides behind jargon. Here is every term that matters. Whole life, infinite banking, estate planning, explained the way we'd explain it across the table.
A
Accelerated Death Benefit
A rider that lets you spend part of your own death benefit early if serious illness strikes, turning life insurance into living insurance.
Read the full definitionAM Best Rating
The insurance industry's oldest financial strength grade: AM Best's opinion of an insurer's ability to pay claims, from A++ down to D.
Read the full definitionAnnuity
An insurance contract that turns a lump sum into guaranteed income. It is the only financial product that can pay you for as long as you live.
Read the full definitionB
Beneficiary
The person, trust, or organization you name to receive the death benefit. It is paid directly, by contract, outside of probate.
Read the full definitionBuy Term and Invest the Difference (BTID)
The strategy of buying cheap term insurance and investing what permanent coverage would have cost. Compelling on a spreadsheet, fragile in real life.
Read the full definitionBuy-Sell Agreement
A binding contract that pre-arranges what happens to a business owner's share at death or exit, with life insurance providing the money to make it happen.
Read the full definitionC
Cash Value
The living, liquid equity inside a permanent life insurance policy: money you can borrow against, withdraw, or surrender while you are alive.
Read the full definitionCollateral Assignment
Pledging a life insurance policy as loan collateral. It is how banks lend against cash value, and how SBA loans get secured, without disturbing the policy.
Read the full definitionComdex Score
A 1 to 100 composite percentile of an insurer's ratings from AM Best, S&P, Moody's, and Fitch. The quickest read on financial strength.
Read the full definitionCompound Interest
Interest earning interest. The exponential force that builds fortunes when uninterrupted and destroys them when it runs against you.
Read the full definitionContestability Period
The first two years of a policy, during which the insurer can investigate and deny claims over misstatements on the application. After that, the contract is nearly bulletproof.
Read the full definitionConvertible Term
Term life insurance that can be swapped into a permanent policy without new underwriting, locking in your insurability, not just a death benefit.
Read the full definitionCreditor Protection (Life Insurance)
State-law exemptions that shield life insurance cash value and death benefits from lawsuits and creditors. Unlimited in some states, thin in others.
Read the full definitionD
Death Benefit
The money a life insurance policy pays to your beneficiaries when you die, generally income-tax-free.
Read the full definitionDirect Recognition
A dividend method where the insurer adjusts the dividend on the portion of cash value securing an outstanding policy loan.
Read the full definitionDividend (Life Insurance)
A share of a mutual insurer's profits paid to whole life policyholders. Not guaranteed, but paid by top mutuals every year for over a century.
Read the full definitionI
Indexed Universal Life (IUL)
Universal life insurance whose cash value interest is tied to a market index like the S&P 500, with caps on gains and a floor against losses.
Read the full definitionInfinite Banking
A strategy where you overfund a whole life insurance policy and borrow against its cash value, so your money compounds while you use it. You become your own source of financing.
Read the full definitionInterest Rate
The price of money: what you pay to borrow it or earn to lend it. Which side of the rate you live on shapes your entire financial life.
Read the full definitionIrrevocable Life Insurance Trust (ILIT)
A trust that owns life insurance outside your taxable estate, turning the death benefit into a fully estate-tax-free transfer.
Read the full definitionL
LIRP (Life Insurance Retirement Plan)
Using an overfunded permanent life insurance policy as a tax-free retirement income source alongside, or instead of, traditional accounts.
Read the full definitionLong-Term Care Insurance
Coverage for extended care, such as home care, assisted living, and nursing facilities, that health insurance and Medicare largely do not pay for.
Read the full definitionM
Modified Endowment Contract (MEC)
What a life insurance policy becomes when funded faster than IRS limits allow. It keeps the death benefit tax break but loses tax-free access to cash value.
Read the full definitionMutual Insurance Company
An insurer owned by its policyholders instead of shareholders. Profits return to you as dividends, not to Wall Street.
Read the full definitionN
Non-Direct Recognition
A dividend method where outstanding policy loans have zero effect on your dividend. The full cash value earns as if never borrowed against.
Read the full definitionNon-Forfeiture Options
Your contractual choices if you stop paying premiums on a permanent policy. You never forfeit the equity you've built.
Read the full definitionP
Paid-Up Additions (PUA)
Small, fully paid-up blocks of extra whole life insurance bought with extra premium or dividends. The accelerator pedal for cash value growth.
Read the full definitionParticipating Policy
A whole life policy that participates in the insurer's profits through dividends. It is the policyholder-as-owner model that powers infinite banking.
Read the full definitionPolicy Illustration
The insurer's year-by-year projection of a policy's premiums, cash value, and death benefit. Part guarantee, part educated guess, all assumptions.
Read the full definitionPolicy Loan
A loan from your insurance company using your policy's cash value as collateral. No application, no credit check, no fixed repayment schedule.
Read the full definitionPower of Attorney
A document authorizing someone to act legally on your behalf. It is the difference between a trusted person handling your affairs and a court-appointed stranger.
Read the full definitionPremium
What you pay for an insurance policy. In properly designed whole life, it is less a cost and more a transfer into an asset you control.
Read the full definitionProbate
The court-supervised process of settling a deceased person's estate. Public, slow, and expensive, and almost entirely avoidable with planning.
Read the full definitionR
Revocable Living Trust
A trust you create and control during life that holds your assets, avoiding probate, staying private, and managing everything if you become incapacitated.
Read the full definitionRider
An optional add-on that customizes a life insurance policy: extra benefits, extra flexibility, or extra coverage bolted onto the base contract.
Read the full definitionS
Stock Insurance Company
An insurer owned by shareholders. Profits leave the building as shareholder dividends rather than returning to policyholders.
Read the full definitionSurrender Value
What the insurer pays you if you cancel a permanent policy: cash value minus any surrender charges and outstanding loans.
Read the full definitionU
Underwriting
The insurer's evaluation of your age, health, and lifestyle that determines whether you're approved and what premium you pay.
Read the full definitionUniversal Life Insurance
Permanent life insurance with flexible premiums and an interest-earning cash account. That flexibility shifts risk from the insurer to you.
Read the full definitionV
Variable Life Insurance
Permanent life insurance whose cash value is invested in market subaccounts. Full market upside, full market risk, inside an insurance wrapper.
Read the full definitionVolume-Based Banking
The I&E methodology that treats whole life insurance as financial infrastructure, building banking capacity through volume and flow, not just a savings balance.
Read the full definitionW
Waiver of Premium
A rider that pays your policy premiums for you if you become disabled. Insurance on the insurance itself.
Read the full definitionWhole Life Insurance
Permanent life insurance with a guaranteed death benefit, fixed premiums, and a cash value account that grows at a guaranteed rate, for your whole life, not a set term.
Read the full definitionUnderstand it? Now put it to work.
Definitions are the start. A Fit Call maps these concepts onto your actual numbers and shows you whether the strategy fits.