Beneficiary

The person or persons named by the owner of the life insurance policy to receive the monies from the policy upon the death of the insured.

Cash Value/Cash Surrender Value

Is the amount that is available in cash for loans and/or withdrawals during the life of the insured. Withdrawals are usually subject to charges and could have a permanent effect on the cash value of the policy. Loans also reduce the cash value and death benefit by the amount of the loan that is outstanding plus the interest. If the life insurance policy is surrendered, the cash surrender value is paid directly to the policy holder.

Convertible Term Insurance

Is term insurance that can be exchanged or converted to a permanent insurance policy at the option of the life insurance policy holder without the evidence of insurability.

Death Benefit

Is the amount paid to the beneficiary or beneficiaries at the time of the death of the policy holder.

Dividend

Is a partial return of the premium on the insurance that is based on the insurer's investment, mortality, and expense experience. Dividends are never guaranteed.

Face Amount

The death benefit is stated on the life insurance policy. This does not include any additional amounts acquired through the application of policy dividends or amounts payable under accidental death or other special provisions.

Insurability

An applicant’s acceptability to the insurance company.

Insured or Insured Life

The person on whose life the life insurance policy is issued.

Level Premium Term Life Insurance

Is term life insurance for which premiums remain the same for a specific number of years which is usually 10, 20 or 30 years. At the end of the specified term, coverage can normally be continued, but the premium payments would increase each year thereafter.

Loan (Policy Loan)

Is a loan made by a life insurance company to a life insurance policy owner based on the cash value of a current policy. Generally, loans reduce the policy's death benefit and cash value by the amount of the outstanding loan plus the interest.

Paid up Insurance

Insurance that will remain in force with no additional premiums needing to be paid.

Permanent Life Insurance

Is insurance that will last a lifetime and may build up a cash value that can be accessed during the insured persons lifetime. Whole life, universal life, variable universal life and survivorship life are all examples of this type of permanent life insurance.

Policy Owner

Is the person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a trust, partnership, or even a corporation.

Premiums

Are payments to an insurance company to buy and keep a life insurance policy in effect.

Term Life Insurance

Is life insurance that does not build up cash value and provides coverage for a specific period of time.

Universal Life Insurance

Is a permanent life insurance policy that allows a person, to change the death benefit and vary the amount and/or timing of premium payments. A part of your premium can go towards building cash value that grows at an interest rate which changes over time, but not below a usually guaranteed minimum. The cash value is available for you to use in a variety of ways that include paying any premiums due.

Variable Universal Life Insurance

Is a form of universal life insurance that allows a person to invest their cash value in various funding options which invest in things like stocks and bonds. You decide how your net policy values are invested, and you also bear the investment risk. The premium required to maintain your death benefit, and also your cash value depends on the performance of your underlying investments.

Whole Life Insurance

Is a type of permanent life insurance which can provide a lifetime of protection with a level premium, guaranteed death benefit and also guaranteed cash value. All premiums must be paid for as long as the policy is in force and most whole life policies are eligible to receive dividends. Dividends can then be used to reduce or eliminate any out-of-pocket premiums in later years.