Life Insurance Glossary

A feature that lets the insured access part of the death benefit early if diagnosed with a qualifying illness.

A savings component in some permanent life insurance policies and can be borrowed against.

A chart used by insurers to estimate life expectancy and determine premiums based on age, gender and health.

The transfer of ownership rights of a life insurance policy to another person or entity.

The person, people, entity, trust, etc. who receive the death benefit when the insured person dies.

The amount of money a policyholder receives if they surrender a permanent life insurance policy before death.

A savings component in some permanent life insurance policies that grows over time and can be borrowed against.

A request made to the insurance company to pay the death benefit after the insured person dies.

A time (usually the first one to two years) when the insurer can investigate and deny a claim due to false information on the application.

A feature in some term policies that allows switching to a permanent policy without a medical exam.

The amount of money the insurance company will pay out upon the insured’s death — also called the death benefit.

A return of excess premium paid to policyholders participating in whole life policies, typically from mutual insurance companies.

Proof (like a medical exam or health questionnaire) that a person is healthy enough to qualify for coverage.

Specific situations or causes of death that are not covered by the policy (e.g., suicide within the first two years).

A short time (usually 10–30 days) after buying a policy when the policyholder can cancel for a full refund.

A set number of days after a missed premium payment during which the policy remains active.

Life insurance offered by an employer or organization to its employees or members, often at a lower cost.

A policy that doesn’t require a medical exam or health questions, usually with lower coverage and higher premiums.

A rule that prevents the insurer from voiding the policy after the contestability period ends, even if there were mistakes in the application.

The person whose life is covered by the policy.

When a policy ends because the premium wasn’t paid on time and the grace period has passed.

A term life policy where the death benefit and premiums stay the same throughout the term.

Features that allow the policyholder to access part of the death benefit while still alive under certain conditions (e.g., terminal illness).

A health check required by many insurers to assess risk before issuing a policy.

The statistical rate at which death occurs in a specific population, used to calculate premiums.

A policy that no longer requires premium payments but still provides coverage.

A type of life insurance that lasts for the insured’s entire life and includes a cash value component as long as necessary premiums are paid.

The person who owns the life insurance policy.

The amount paid to keep the life insurance policy active.

An optional add-on to a policy that provides extra benefits or coverage.

The different ways a beneficiary can receive the death benefit (e.g., lump sum, installments, annuity).

A policy provision that denies the death benefit if the insured dies by suicide within a specified time (usually one to two years).

A policy that only provides coverage for a specific period, typically 10-30 years. If the insured dies during that time, the benefit will be paid. After the level term period coverage can continue usually to age 95 or 100 at annually increasing premium rates.

The process insurers use to evaluate risk and determine eligibility and premium rates.

A flexible type of permanent life insurance that allows changes to the premium and death benefit and includes a cash value.

A permanent life insurance policy with fixed premiums and a guaranteed cash value component.