Jump whole words with the arrow keys in iTerm2

In iTerm2 goto Preferences > Profiles > Keys, find ⎇← and change it to "Send escape sequence" with "Esc+" set to b. Do the same for ⎇→ but set "Esc+" to f.

You will now be able to move left and right a word at a time with ⎇← and ⎇→.