Glossary

Death resulting from an unintentional or unforeseen event, injury or poisoning.

This is the person you choose to receive your life insurance money after you pass away. For many policies, you can name more than one beneficiary. If you don’t name a beneficiary, your death benefits go to your estate.

This is the amount of money you would receive if you cancel your policy or if your policy lapses.

This is a general term for the total assets and liabilities a person has when they die.

It’s the amount of money your beneficiary/beneficiaries will receive when you pass away. If your policy has a graded death benefit, this may reduce your benefits during that period. The face amount is also called a death benefit.

This is a time frame new policyowners can review their policy and terminate their policy without penalty. Regulations surrounding these vary by state.

This is extra time allowed after the premium is due before coverage lapses. Regulations on these vary by state.

This is a period of time where death benefits may be reduced. The length of time and the benefits paid out vary.

These are the ages a company will allow someone to purchase a policy. For example, many marketing pieces will state “Issue ages: 18-80.” Regulations surrounding these vary by state.

This is the date a company approves and accepts your application.

This is what happens if you don’t pay your premiums. That is, your policy is no longer active, and you’ll no longer be eligible to receive benefits.

The date your policy expires. For term policies, this is the end of the term (10 or 20 years, for example). For permanent policies, these are set by age — for example, age 100. When your policy reaches its maturity date, you are paid your full face amount.

Death that occurs due to internal factors, such as disease, illness or the natural process of aging.

The amount you pay (monthly, quarterly or yearly) to cover your policy.

Extra benefits that can be added to your policy.

Term life insurance provides protection for a specific amount of time (such as 10, 15, 20 or 30 years). Once the term is over, your insurance policy ends and you are no longer covered. The main advantage of term life insurance is its affordability and the potential for a higher benefit amount.

This is a process applicants go through for some policies. These could include questionnaires or medical exams.

Whole life insurance is coverage you can own for your entire lifetime. As renewal premiums are paid, your insurance policy accumulates equity (called cash value) that gives you added money you can use in an emergency. The main advantage of whole life insurance is the combination of lifelong coverage and cash value, as well as a guaranteed death benefit.