Premium - The amount you pay for your life insurance policy, typically on a monthly or annual basis. This can vary depending on factors like the type of policy, coverage amount, and personal risk factors.

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Beneficiary - The person or entity you designate to receive the death benefit when you pass away. You can have primary and contingent beneficiaries.

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Death Benefit - The amount of money paid to your beneficiaries upon your death, typically tax-free. This is the core payout of the life insurance policy.

 

Term Life Insurance - A policy that provides coverage for a specific period (e.g., 10, 20, or 30 years). If you die during this term, the death benefit is paid to your beneficiaries. If you outlive the term, the policy expires with no payout.

 

Whole Life Insurance - A type of permanent life insurance that provides coverage for your entire lifetime as long as premiums are paid. It includes a cash value component that grows over time and can be borrowed against.

 

Cash Value - A portion of the premium in a permanent life insurance policy (like whole life or universal life) that builds up over time and can be accessed through withdrawals or loans. This is not available in term life policies.

 

Underwriting - The process through which an insurer evaluates the risk of insuring you. It typically involves assessing your health, lifestyle, age, and sometimes a medical exam.

 

Exclusions - Specific conditions or situations that are not covered by the policy. For example, suicide within a certain period after purchasing the policy might be excluded from coverage.

 

Riders - Additional provisions you can add to your life insurance policy for extra coverage or benefits. Common riders include accidental death, waiver of premium, and child term riders.

 

Face Value - The original death benefit amount specified in the policy. This is the sum paid to your beneficiaries if you pass away, before any deductions or fees.

 

Convertible Policy - A term life policy that allows you to convert to a permanent life policy (like whole life or universal life) without undergoing a medical exam, usually within a specific time frame.

 

Premium Waiver - A rider that waives your premium payments if you become seriously ill or disabled, typically for a certain period or until you recover.

 

Waiting Period - The period of time after purchasing a life insurance policy before the coverage takes effect, which could range from a few days to a couple of years depending on the situation.

 

Accelerated Death Benefit - A feature that allows you to access a portion of your death benefit early if diagnosed with a terminal illness, helping with end-of-life expenses.

 

Group Life Insurance - A life insurance policy offered through an employer or other group. The coverage is usually more affordable and less customizable than individual policies.

 

Policyholder - The person who owns the life insurance policy. They are responsible for paying premiums and can make changes to the policy (such as changing beneficiaries).

 

Insured - The individual whose life is covered by the policy. In most cases, the insured and policyholder are the same person, but in certain situations, they can differ.

 

Universal Life Insurance - A type of permanent life insurance that combines life coverage with an investment savings element. The premium and death benefit are more flexible than in whole life policies.