You’re Life Insurance Glossary

When shopping for permanent or term life insurance coverage there are some common terms you need to be familiar with:

Beneficiary:

This is the person(s) you designate to receive benefits from your insurance policy.

Cash surrender value:

This is the total amount available to be paid to an insured person who surrenders cash value life insurance. This provides a payout of the cash value and terminates all future insurance benefits.

Convertible term life insurance:

Under this plan you can exchange a term life insurance policy for a permanent policy at specified times.

Free look period:

Some state laws provide for a period during which you may cancel a policy with no penalty assessed. The most common free look period is at least 10 days.

Insurable interest:

If you want to buy a life insurance policy on someone else’s life you need to show you would experience an emotional or financial loss should that person die. This ensures you have an interest in the person remaining alive.

No-load policy:

Some insurers sell policies directly to the public and bypass payment of commissions to insurance agents and brokers.

Permanent (cash value) life insurance:

Combines a death benefit with a cash value component and offers lifetime protection. The cash value builds over time.

Risk factors:

When calculating premiums the insurance company considers many factors. These include age, health, use of tobacco and family history. The type and amount of insurance you are buying is also considered.

Term life insurance:

Provides coverage for a specified period of time (term) and may be for one, 10, 20, or even 30 years or until the insured person reaches 65 or 70 years of age.

Universal life insurance:

A type of permanent life insurance policy where cash value varies with the purchaser’s payments and the insurer’s investment returns.

Variable universal life insurance:

Type of permanent life insurance where cash value fluctuates based on investments purchased by the purchaser for his portfolio.

Whole life insurance:

Whole, universal and variable life insurance each has its own provisions but all cover you for life.

See how easy it is to shop online for life insurance. Get your free Miami life insurance quotes today!