Life Insurance Terms

The following terms are unique to insurance purchased to protect your loved ones upon your death.

Accelerated Benefits: (also known as Living Benefits): An amendment provided by some insurance companies that allows you to receive the value of your life insurance policy before death under specific conditions (i.e. terminal or catastrophic sickness, long term care or nursing home needs, etc.). This may be useful in the event that you require long term care or incur extensive medical bills due to a chronic illness.

Beneficiary: A person named by the insured to receive the benefits or proceeds from a life insurance policy. Cash Value: Amount available from some permanent life insurance policies when you allow the policy to expire prior to your death. The cash value is often referred to as the “savings component”. Death Benefit (also known as Survivor Benefit): The payment made to your heirs from your life insurance policy upon your death.

Permanent Life Insurance: A form of insurance that provides lifelong protection as long as the insured continues to pay the premiums. Additionally, permanent life insurance includes a savings component that allows the insured to build value in the policy that can be borrowed or used to pay premiums in the later years of the policy.

Term Life Insurance: Insurance that provides pure death benefit protection for a specified period of time as long as the insured continues to pay the premiums. If the insured is still alive at the end of the term, no benefit will be received from the policy.