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Life Insurance Glossary

Beneficiary: An individual that is entitled by an insurance policy to receive the insurance proceeds upon the death of the insured.

Face Amount: The amount of the death benefit payable if the insured person dies while the policy is in effect.

Insurability: The acceptability of an insurance applicant based on a number of factors such as age, health, occupation, financial status, etc.

Paid-Up Policy: An insurance policy that requires no further payments but continues to provide coverage.

Permanent Life Insurance: A type of life insurance coverage that can be continued indefinitely as long as premium payments are made on time and the policyholder refrains from any actions that would invalidate the policy.

Policyholder: A named person responsible for an insurance policy.

Premiums: The sum of money paid at regular intervals for an insurance policy.

Renewable Term Insurance Policy: A term life insurance policy offered at a higher premium that gives the policy owner the option to continue the coverage at the end of the specified term without presenting evidence of insurability.

Universal Life Insurance: A flexible premium policy offering protection against premature death combined with a cash value account that earns a money market rate of interest.

Term Life Insurance: A life insurance policy that covers the insured for a specific period of time as outlined in the insurance policy. If the insured dies within the specified period, the policy pays a benefit to a designated beneficiary. Term life insurance policies are renewable but premiums increase with age.

Whole Life Insurance: A life insurance policy that provides coverage for the insured's whole life, rather than just a specific term. A portion of the premium payments may be used to build up savings over time.