Glossary of Life Insurance Terms
Level Term Insurance:
This policy has a guaranteed premium for a term 5, 10, 15, 20, 25 or 30
years. The face value of the policy never changes. This insurance policy
is generally the least expensive policy. The policy, however, is not designed
to remain in effect for the rest of your life.
Life or U.L. Policy:
This policy is designed to be with you for as long as you would like,
most often the rest of your life. The policy might be referred as a permanent
policy. The policy accumulates cash in the policy and can be flexible
with the premium payment.
Renewable Term Life:
This policy gives ample protection, yet increases in price every year.
Primarily used for very short periods of time.
Policy Face Amount:
This refers to the value of the life insurance policy. The beneficiaries
would receive this amount tax-free. This face amount usually does not
change in value unless the owner makes a change.
This term refers to exchanging an old life insurance policy for a new
policy. Before replacement make certain that you compare the benefits
and terms of the new proposal. Do not discontinue your current policy
until the new policy is issued.
A condition within the policy that will allow you to exchange the policy
to a different type of plan without having to re-qualify. For instance,
converting a term insurance plan to a permanent universal life plan.
This term refers to a person who may become eligible to receive the value
of a life insurance policy. The beneficiary will receive the face value
of the policy tax-free. The owner of the policy designates this beneficiary.
This is an addition to the policy, which allows the policy to be paid
for in the event of your disability, therefore, leaving no ability to
pay for the premiums. The life insurance pays the premiums and your protection
remains in force.
This provides a small amount of insurance in the event of the loss of
a child. The policy will pay to help cover expenses, time off work, etc.
For example, you can specify the amount between $10,000 to $25,000.
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