Life Insurance Glossary

Like any form of insurance, it may seem like people are speaking a different language when talking about life insurance. Get up to speed with this helpful glossary of important life insurance terms.

• Beneficiary - The person or persons eligible to receive the life insurance proceeds upon the death of the insured.
• Convertible Term Insurance - A term life insurance policy that can be adjusted to a permanent life insurance policy at the policy owner’s behest.
• Cash Value - Usually found in whole life or universal life insurance policies, this refers to the amount of money a policy owner would receive should they cancel their insurance or allow it to lapse.
• Death Benefit - The amount payable after the death of the insured.
• Death Claim - Request for payment to the insurance provider by the beneficiary.
• Exclusions - Limits or conditions listed in a policy for which the benefit will not be paid.
• Insurability - Acceptability of an insurance company to provide coverage for an individual.
• Lapse - Termination of a policy due to unpaid premiums.
• Loan - A loan made from the insurance provider to the policy owner, secured by the policy’s cash value. The outstanding amount of the loan is deducted from the benefits.
• Policy Owner - The person who owns a life insurance policy, the insured.
• Premiums - The amount of money that must be paid to the insurance provider to keep the policy in good standing.
• Renewable Term Life Insurance - A term life insurance policy that can be renewed at the end of it’s term, without the need for evidence of insurability. However, the renewed policy may have more expensive rates.
• Rider - A provision attached to a policy outlining restrictions or limitations.