Glossary of Common Life
– A licensed professional person who acts as an intermediary
between insurance companies and consumers buying insurance. An agent
may represent only one company (captive) or a variety of companies
– The person or entity named in the policy to receive the
death benefit. A policy can have more than one beneficiary.
– The amount of money that the policyholder of a permanent
(whole life, universal, etc.) life insurance policy receives if
he or she were to surrender or "cash in" the policy.
– The amount of money the insurance company pays to the beneficiary
or beneficiaries if the insured dies while the policy is in effect.
– This is the stated amount that upon death or maturity is
paid out by the insurance company.
– The capacity of a person to purchase life insurance based
on his or her health and other risk factors as determined by the
insurance company. People with serious or terminal diseases are
- The person whose life is insured by the policy.
Policy – A contract between an insurance company
and the policyholder to pay a death benefit if the insured dies
while the policy is in effect.
– A policy that remains in force although the policyholder
no longer has to pay premiums.
– The person who owns the insurance policy. This person may
or may not be the insured.
– A loan secured by the cash value of a life insurance policy.
It must be less than the amount of the cash value.
– The agreed upon amount of money paid on a regular basis
by the policyholder to the insurance company to keep the policy
Life Insurance – Term life insurance that allows
the policy to be renewed usually without requiring evidence of the
– Lifestyle choices, health conditions and other considerations
that insurance company underwriters must take into consideration
to determine a person's insurability.
– A section in some life insurance policies that cancels the
death benefit if the insured commits suicide, usually within the
first few years of the policy.
– The amount of money that you may lose if you cash in your
– The amount of cash that the policyholder of a life insurance
policy receives if he or she surrenders or "cashes in" the policy.
The amount paid is less any outstanding surrender charges/ penalties.
Term Life Insurance
– A simple form of life insurance without a savings component
that is designed to last a temporary period of time. Policyholders
pay for "death benefit" coverage only.
Whole Life Insurance
- A form of life insurance designed to last a persons "whole
life" and includes a tax-deferred, investment component. This
type of policy accumulates cash value.
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