Resources

Glossary

Life insurance policies are often written in their own unique language. Here's a glossary of some common terms to help you decipher the language when reviewing and comparing policies.

Beneficiary
The person(s) named in a life insurance policy to receive the death benefit when the insured person dies. People often name a secondary, or contingent, beneficiary in case they outlive the first beneficiary.

Cash value
The amount that is available in cash for loans. You may also be able to cancel, or surrender, the policy and receive the cash value as a lump sum.

Death benefit
The amount paid to a beneficiary upon the death of an insured person.

Dividend
A return of part of the premium based on the insurance company's investments and expenses.

Face amount
The amount stated on the face of the policy that will be paid by the insurance company at the insured person's death.

Insurability
Acceptability of an applicant for insurance.

Insured
The person on whose life the policy is issued.

Loan
A loan made by a life insurance company from its general funds to a policy owner on the security of the cash value of a policy.

Paid-up insurance
Insurance that will remain in force with no need to pay additional premiums.

Permanent life insurance
Insurance that covers the entire life of the insured person, as long as the premiums are paid. This type of insurance also builds up a cash value.

Policyowner
The person who owns a life insurance policy. While this is usually the insured person, it may also be a relative of the insured, a partnership or a corporation.

Premiums
Payments to the insurance company to buy a policy and to keep it in force.

Surrender
Canceling the policy before the death of the insured person.

Term life insurance
Life insurance that covers the insured person for a specific period of time and pays a death benefit only if the insured dies during that term. This type of insurance does not build up a cash value.

Universal life insurance
A flexible permanent life insurance policy under which the policyowner may change the death benefit from time to time and vary the amount or timing of premium payments.

Variable life insurance
A type of whole life insurance that allows the policyowner to invest premiums in stock, bond, and money market funds chosen from the insurance company's portfolio. The cash value and death benefit of this policy is determined by the success of those investments.

Whole life insurance
The most common type of permanent life insurance, with fixed premiums, a fixed guaranteed rate of return, and guaranteed cash values. Premiums must generally be paid as long as the policy is in force.

How can I find out more information?

You can start by Requesting a Free Insider's Guide and Free Quote. When you request your free life insurance quote you will receive the "Free Insider’s Guide to Life Insurance". Giving you the chance to learn even more about your options while you wait for contact from your licensed local life insurance agent in your area.