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Insurance Terminolog
| Question | Answer |
|---|---|
| Provides coverage for a specified term, typically 10, 20, or 30 years. It pays out a death benefit to the beneficiaries if the insured person passes away during the term. It's often more affordable than permanent life insurance. | Term Life Insurance |
| A type of permanent life insurance that provides coverage for the entire lifetime of the insured. It includes a cash value component that grows over time and can be borrowed against or withdrawn. | Whole Life Insurance |
| Another form of permanent life insurance with flexibility in premium payments and death benefits. It also has a cash value component that can earn interest. | Universal Life Insurance |
| Similar to whole life insurance but allows the policyholder to invest the cash value in various investment options, such as stocks and bonds. The death benefit and cash value can fluctuate based on the performance of the investments. | Variable Life Insurance |
| Combines features of universal life insurance with the opportunity to earn interest based on the performance of a market index, like the S&P 500. Guaranteed Issue Life Insurance: Designed for individuals who may have difficulty | Indexed Universal Life Insurance |
| Combines features of universal life insurance with the opportunity to earn interest based on the performance of a market index, like the S&P 500. | Indexed Universal Life Insurance |
| Designed for individuals who may have difficulty obtaining coverage due to health issues. It typically has no medical exam or health questions but may have higher premiums. | Guaranteed Issue Life Insurance |
| A type of whole life insurance with a smaller death benefit intended to cover funeral and burial expenses. | Final Expense Insurance |
| Requires fewer medical underwriting requirements than traditional life insurance policies but may be more expensive. It may involve answering health-related questions. | Simplified Issue Life Insurance |
| Offered by employers to their employees as part of a benefits package. Coverage amounts are often a multiple of the employee's salary. | Group Life Insurance |
| Provides coverage for a child and can accumulate cash value over time. It can also be used as a savings tool for educational expenses or other financial needs. | Child Life Insurance |
| The person who owns the life insurance policy | Policyholder |
| The person or entity designated to receive the insurance proceeds upon the policyholder's death. | Beneficiary |
| The amount paid to the beneficiary upon the death of the insured. | Death Benefit |
| The process of assessing risk and determining premium rates for a policy. | Underwriting |
| A permanent policy that covers the insured for their entire life and includes a cash value component. | Whole Life Insurance |
| The savings component of a whole life insurance policy that can be accessed or borrowed against. | Cash Value |
| The initial death benefit amount specified in the policy. | Face Amount |
| Additional policy provisions or options that can be added to customize coverage. | Riders |
| When a policyholder stops paying premiums and the coverage terminates. | Policy Lapse: |
| A period after a missed premium payment during which the policy remains in force. | Grace Period |
| A limited time during which the insurance company can investigate and potentially deny a claim. | Contestability Period |
| Categories that assess risk and determine premium rates based on health and lifestyle factors | Underwriting Classifications |
| The frequency of premium payments (e.g., monthly, annually). | Premium Mode |
| The amount a policyholder receives if they cancel a permanent life insurance policy. | Surrender Value |
| Payments to policyholders from the insurance company's profits, common in participating whole life policies | Dividend |
| The ability to convert a term life policy into a permanent policy without a medical exam. Accelerated D | Term Conversion |
| Allows the policyholder to access a portion of the death benefit if diagnosed with a terminal illness. Nonforfeiture Options: Choices avai | Accelerated Death Benefit |
| Choices available to a policyholder if they stop paying premiums, such as reduced paid-up insurance. | Nonforfeiture Options |
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