Life insurance terminology, explained clearly
The person or entity designated to receive the death benefit when the insured person passes away. You can name multiple beneficiaries and specify the percentage each receives.
A savings component within permanent life insurance policies (whole life, IUL) that accumulates over time on a tax-deferred basis. You can borrow against it or withdraw funds during your lifetime.
A term life insurance policy that includes the option to convert to a permanent policy without undergoing additional medical underwriting.
The amount of money paid to the beneficiary upon the death of the insured person. This is the core purpose of a life insurance policy.
Specific conditions or circumstances not covered by an insurance policy, such as death resulting from certain high-risk activities.
The initial amount of coverage stated on the policy, which typically equals the death benefit. Also called the face value.
A set period after a premium payment is due during which the policy remains in force even if payment has not been received, typically 30 or 31 days.
A type of policy that does not require medical underwriting. Acceptance is guaranteed for eligible applicants regardless of health status, though premiums are typically higher.
A type of permanent life insurance where the cash value growth is tied to a stock market index. Offers a guaranteed minimum interest rate to protect against market downturns.
The person whose life is covered by the insurance policy. The insured is not always the policy owner.
When a policy is terminated due to non-payment of premiums. A lapsed policy no longer provides coverage.
A premium amount that remains the same throughout the entire term of the policy, providing predictable costs.
The process by which an insurance company evaluates your health status to determine eligibility and premium rates. OpenLife uses accelerated underwriting that often eliminates the need for a medical exam.
The person or entity that owns the insurance policy, pays the premiums, and has the right to make changes such as naming beneficiaries. The owner may or may not be the insured.
The amount you pay for your insurance coverage, typically on a monthly or annual basis.
An add-on provision to a base insurance policy that provides additional coverage or benefits, such as an accelerated death benefit rider or waiver of premium rider.
Life insurance that provides coverage for a specific period of time (the term). If the insured dies during the term, the beneficiary receives the death benefit. If the term expires, coverage ends unless renewed.
The process an insurance company uses to evaluate risk and determine whether to offer coverage and at what premium rate.
A type of permanent life insurance with flexible premiums and an adjustable death benefit. Includes a cash value component that earns interest.
Permanent life insurance that provides coverage for your entire life with a guaranteed death benefit and guaranteed cash value growth at a fixed premium.