Insurance Glossary

 

Application – A form that must be filled out to apply for life insurance.

Beneficiary – The person who receives the money from a life insurance policy when an insured passes away.

Cash value – The amount of money you can receive from your policy if you cancel it, or the amount of money you can borrow as a loan from your policy. Cash value is typically a feature with a whole life policy.

Coverage Amount – The face amount of a policy to be paid to a beneficiary after the policyholder passes away.

Final expenses – Expenses incurred once a person has passed away, including funeral and burial costs, medical bills and other financial obligations.

Financial strength ratings – The financial strength and stability of an organization determined by third party ratings agencies.

Free look period – A short period of time during which a new insurance policyholder can cancel a contract and receive a refund of any premiums paid.

Group life insurance – Coverage offered to you as a member of a group, such as a company for whom you work or an association to which you belong.

Group term life insurance – Group life insurance purchased for a specified length of time.

Group whole life insurance – Group life insurance purchased for the life of the policyholder. Most policies maintain a cash value.

Group Guaranteed issue life insurance – Insurance designed for a group where every person who applies and meets conditions receives coverage.

Life insurance – Insurance to help protect against financial loss when a person dies.

No medical life insurance – Insurance available without a physical exam or blood work.

Permanent life insurance – Life insurance, such as whole life, that remains in effect for the life of the insured.

Policy – The insurance contract that explains the terms, conditions and features of the life insurance coverage.

Premium – The amount paid monthly or other frequencies to an insurance company for coverage.

Monthly Rate Quote – The estimated monthly cost for a life insurance policy.

Supplemental coverage – Additional insurance meant to help pay for expenses not covered by other policies.

Term life insurance – An insurance policy that provides financial protection for a set length of time. Term life insurance premiums are lower initially but can increase over the life of the policy.

Underwriting – The process to assess the eligibility and risk of issuing an insurance policy.

Whole life insurance – An insurance policy that provides lifetime coverage. Premiums are typically fixed for the life of the policy. Whole policies can also build cash value.

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