Every term you'll run into — beneficiary, contestability, riders, cash value — explained the way a friend would explain it. No jargon, no fine-print gymnastics.
A rider that lets you access part of your death benefit early if you're diagnosed with a qualifying serious illness (like a terminal or chronic condition). It's not extra money — whatever you use now is subtracted from what your family receives later.
An optional rider that pays an extra amount on top of your regular death benefit if you die from a covered accident. Doesn't cover natural causes or illness.
The math person behind the scenes at every insurance company. Actuaries use statistics to figure out how much a policy should cost for someone your age, health, and lifestyle.
Some carriers price your policy based on the age you're closest to — not your last birthday. If you're 44 and 7 months old, they might call you 45. Not every carrier does this.
A licensed person who helps you shop for and buy insurance. A captive agent works for one company; an independent agent (like us) compares many.
The paperwork (or online form) you complete to ask a carrier to cover you. It includes your personal info, health history, and beneficiaries. Nothing is guaranteed until it's approved.
A copy of your medical records the insurance company requests from your doctor during underwriting. Not every application needs one — usually only when something in your history requires a closer look.
Officially transferring ownership rights of your policy to someone else — often used in estate planning or business situations.
A feature in some whole life policies that automatically borrows against your cash value to pay a missed premium, so the policy doesn't lapse. Convenient, but interest accrues on the loan.
The person (or people, or trust, or charity) who receives your death benefit. You choose them and can update them any time. Primary beneficiaries are first in line; contingent beneficiaries only receive money if the primary is gone.
The moment your coverage officially starts. This is not the same as applying — it happens when the policy is approved, funded, and delivered.
The savings portion of a permanent life insurance policy (like whole life). It grows tax-deferred over time and you can borrow against it. Cash value is different from your death benefit.
The formal request your beneficiary makes to the insurance company to receive the death benefit after you pass away. Modern claims are usually paid within 30 days once paperwork is complete.
The first two years of your policy. During this window, if you die from something other than an accident, the insurance company can review your original application for material misrepresentations before paying the claim. After two years, this window closes.
Your backup beneficiary. If your primary beneficiary is no longer living when you pass, the money goes to your contingent instead.
The right — built into many term policies — to switch your term coverage into permanent coverage without a new medical exam. Often has a deadline. Worth understanding before your term ends.
The dollar amount your beneficiary receives when you pass. Also called the face amount. Not to be confused with cash value.
The tax-free lump sum your beneficiary receives when you die. This is the whole point of life insurance.
The insurer said no. It's not personal — it usually means your health, lifestyle, or history didn't fit that specific carrier's underwriting guidelines. A different carrier may still say yes.
In participating whole life policies, some carriers pay dividends when the company performs well. Dividends aren't guaranteed but can be taken as cash, used to reduce premiums, or reinvested to grow your policy.
An older, less common type of policy that pays out either when you die or when the policy matures (like at age 65) — whichever comes first. Rare in today's market.
A quick medical checkup — usually height, weight, blood pressure, and a blood and urine sample — done by a nurse at your home or office. Many modern policies skip this entirely.
A specific situation the policy won't pay for. Common exclusions include suicide during the first two years, or fraud on the application.
Another name for the death benefit — the dollar amount printed on the front (face) of the policy that your beneficiary receives.
A smaller whole life policy — typically $50,000 or less — designed to cover funeral costs, burial or cremation, final medical bills, and money left for family. Also called burial insurance or cremation insurance. Traditional final expense whole life has a fixed premium that doesn't increase, lasts your entire lifetime, and often requires no medical exam. Health problems don't automatically disqualify you.
A window — usually 10 to 30 days after your policy is issued — during which you can cancel for a full refund, no questions asked. Set by state law.
The extra time (usually 30 days) you have to pay a missed premium before the policy lapses. Your coverage remains in force during the grace period.
Some policies pay a limited death benefit during the first two or three years, then the full benefit after. Common in guaranteed-issue policies for people with tough health histories.
Coverage offered through your employer or a professional association. Usually cheap, easy to get, but ends when you leave the job. Consider it a bonus — not your main policy.
A policy that accepts everyone within an age range with no health questions and no exam. In exchange, coverage amounts are small and premiums are higher. Usually a last resort.
A multi-page document showing how a permanent policy is projected to perform over the years — premiums, cash value, death benefit. Some numbers are guaranteed; others are estimates.
A polite way of saying your policy is active and premiums are current. If it's in force, you're covered.
After the two-year contestability period ends, the insurance company generally can't dispute the policy for anything on the original application. See also: Contestability Period.
A type of permanent insurance where the cash value growth is linked to a market index (like the S&P 500) with a floor and a cap. Complex — always read the illustration carefully.
The person whose life the policy covers. Usually the same as the policy owner, but not always.
What happens when you stop paying premiums past the grace period. Coverage ends. Some policies can be reinstated if you catch up quickly and meet the carrier's rules.
The premium stays the same every year for the length of the term (or for life, in most whole life policies). No surprises.
A term policy where both your premium and your death benefit stay the same for the full term (10, 20, 30 years). The most common kind of term policy.
Leaving out or misstating something on your application that would have changed the insurance company's decision. Honest mistakes are usually fine — deliberate omissions can void the policy during the contestability period.
A shared database life insurance companies use to spot inconsistencies between applications. It stores coded underwriting info — not your medical records. You can request your own free file once a year.
A permanent policy that's been funded so heavily it lost some of its favorable tax treatment. If you're overfunding a policy, your advisor should warn you before this happens.
The portion of your premium that pays for the actual insurance cost. In permanent policies, this is subtracted from your cash value each month.
A policy that doesn't require a paramedical exam. Approval often relies on prescription history, MIB data, and questionnaire answers. Faster, but not always cheapest for perfectly healthy applicants.
The choices you get in a permanent policy if you stop paying premiums but have built up cash value — like taking the cash, keeping a smaller paid-up policy, or extended term coverage.
The person or entity that controls the policy — they pay premiums, change beneficiaries, and can cancel or borrow against it. Often the same as the insured, but not always.
A permanent policy where no more premiums are due but coverage stays in force for life. Some whole life policies are designed to become paid-up after a set number of years.
Life insurance that lasts your entire life as long as premiums are paid. Includes whole life, universal life, and IUL. Builds cash value over time.
The actual contract between you and the insurance company. It defines what's covered, what's not, who gets paid, and how much.
The best (cheapest) health classes. To qualify you generally need to be a non-smoker in excellent health with clean labs, ideal weight, and no risky family history.
What you pay to keep coverage in force. Monthly, quarterly, or annually — you choose.
A report showing medications filled at U.S. pharmacies. Insurers use it in underwriting to confirm your health history matches what you disclosed.
The first person in line to receive your death benefit. You can name more than one and split percentages however you want.
You were approved, but at a higher premium than standard due to your health, lifestyle, or medical history. Better than declined — it means someone said yes.
Bringing a lapsed policy back to life. Usually requires catching up on missed premiums (with interest) and re-proving insurability. Time-sensitive.
A term policy you can renew at the end of the term without a new medical exam — but usually at a much higher rate, since you're older.
A term policy rider that refunds the premiums you paid if you outlive the term. Costs significantly more than plain term.
An optional add-on that customizes a base policy. Examples: waiver of premium, accelerated death benefit, child rider, accidental death.
A policy you apply for by answering a short set of yes/no health questions — no exam. Coverage limits are usually lower than fully underwritten policies.
The middle-of-the-road health class. Neither penalized nor rewarded — you're average risk.
A health class below standard, meaning higher premiums. Also called Table Ratings (Table 1, Table 2, and up). Common for applicants with controlled but chronic conditions.
A standard policy exclusion that voids coverage if the insured dies by suicide within the first two years. After two years the exclusion is gone.
Cancelling your permanent policy and taking whatever cash value has built up (minus any surrender charges the carrier applies in the early years).
How insurers price substandard risks. Each table (Table 1, Table 2, etc.) adds roughly 25% to the standard premium. Table 6 is roughly double standard.
Coverage that lasts a set number of years (usually 10, 15, 20, or 30). If you die during the term, your family is paid. If you outlive the term, coverage ends. Cheaper than permanent.
A common accelerated death benefit rider that lets you receive part of your death benefit early if you're diagnosed with a terminal condition. Often included at no extra cost.
The insurance company's process of reviewing your application, health, and lifestyle to decide whether to insure you — and at what price. Can take anywhere from a few minutes (instant decision) to a few weeks (traditional).
A flexible-premium permanent policy. You can adjust the death benefit and premium payments within limits. Cash value earns interest tied to current market rates.
A permanent policy where the cash value is invested in sub-accounts (similar to mutual funds). Potentially higher growth, but the cash value can also drop with the market.
A hybrid of universal life and variable life — flexible premiums plus investment sub-accounts. Complex and requires active management.
A rider that pauses your premium payments (while keeping coverage in force) if you become totally disabled. Rules and definitions vary by carrier.
Permanent coverage with fixed premiums for life, a guaranteed death benefit, and cash value that grows on a fixed schedule. The most predictable form of permanent insurance.