Your guide to life insurance policies
 

Glossary of Life Insurance Terms

There are a number of things one should learn about life insurance policies in general to ensure that a sound decision is made as to what kind of policy you will apply for. For more information about life insurance glossary of terms, you can refer to the items below:

Accidental Death Benefit

In every policy, there is a clause for accidental death benefit. If a policyholder dies due to an accident, there are certain exclusions depending on which company you will be getting your insurance from.

Annuitization

The process wherein a policyholder converts part of the policy as a retirement benefit.

Broker

A person that looks for the best insurance policy based on the client’s needs.

Capitalization

This is a measurement of the exposure of an insurance provider’s surplus against financial practices. A poorly capitalized company can promise high returns but are usually deemed unstable.

Claim

This is the demand of either the policyholder or the beneficiary for benefits. In other types of insurance policies i.e. auto insurance, one will have to file a claim to get cash benefits or reimbursement.

Coverage

A very important item that every person looking for an insurance plan should take a look at, coverage refers to the scope of what the insurance offers protection from.

Convertible

A convertible policy is a policy that one can convert from one type of policy to another. For example, if you are getting a term plan and this policy is convertible, you can always make it into a permanent life plan.

Death Benefit

Also known as death proceeds, death benefit is the amount your beneficiary or beneficiaries will receive after your death.

Exclusion

These are conditions that are not under the scope of your policy.

Licensed

When a company is licensed to provide insurance, it means that it is either chartered or incorporated. It also means that it is an admitted insurance provider in your state.

Living Benefits

Benefits provided by your policy while you are still alive. This can include money for confinement or long-term care.

Noncancellable

Items contained in an insurance contract that cannot be changed.

Surrender Charge

This is a fee charged by the life insurance company when the annuity is exchanged for its cash value.

There are other things one should learn about life insurance policies but these are a few of the most important terms one should learn.

 

Frequently Asked Questions

What is a beneficiary and who should I put in it?

A beneficiary is a person or a party that will receive your insurance or its annuity proceeds upon your death. If you are planning to take out a policy, you would have to name a beneficiary or beneficiaries. The names of course can be changed at your request.... read more

Life Insurance Plans

Term insurance is the usual choice for those who are trying to save some money but this policy only lasts for a number of years i.e. from one year up to 30.

Whole-life policies on the other hand insures policyholders that the beneficiaries will get the death proceeds upon the policyholder's death...

For those who are looking for a more flexible policy, getting universal-life is a good idea.

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