At TruStage®, we believe insurance should be simple, straightforward and easy to understand. That’s why we created this insurance glossary with the terms you need to know, in plain English. We want to help you make smarter, more informed decisions about protecting yourself, your family and your finances.
Absolute AssignmentSigning over ownership of an entire insurance policy to another party. There are a variety of reasons why a policyholder may do this. They might think of it as a gift to a favorite charity. Or they may use the policy as collateral for a loan. The term absolute means that once the rights are assigned you can't change your mind.
Accelerated Death BenefitsPart of a life insurance policy that lets you access your death benefits while you’re still alive, usually to cover the cost of care if you were to have a terminal illness.
Accidental Death and Dismemberment InsuranceAlso known as AD&D, this type of insurance pays out if the insured dies, becomes blind or is dismembered (loses a limb) in a covered accident.
Accidental Death InsuranceAn insurance policy that pays out only if the insured dies in a covered accident. Some of the leading causes of accidental death include poisoning, auto accidents and falls.
Accrued InterestInterest that has been earned but not yet paid out. Some annuities, for instance, have a feature where a portion of the payment goes to investments. Over time, these investments will build up accrued interest.
Accumulated ValueWhole life insurance usually includes a death benefit as well as an accumulated value. This is the cash value that has built up over time plus any dividend value (including interest). As you pay your premiums over the years and earn more of a return, the accumulated value of your policy may grow.
Administrative ExpenseAn insurance company's operating costs. It covers things like salaries, underwriting, advertising, printing costs, agency expenses and premium taxes. These expenses get lumped into what you pay and are used to calculate dividends and premium rates.
Advance DirectiveA statement that details the healthcare preferences and decisions, who makes those decisions and how they are to be executed should that person become unable to communicate their desires to a healthcare professional autonomously.
AgentA professional licensed by the state who has the authority to sell insurance. An agent can be independent and represent multiple companies, or a direct writer who sells policies for only one company.
Amount of InsuranceThe amount of money paid by an insurance policy. It’s also known as the coverage amount, death benefit or face amount. For example, if your homeowner's policy has a limit of $300,000, then the amount of insurance you have for this policy would be $300,000. You are responsible for losses over this limit..
Annual Renewable TermA type of life insurance that covers you for a term of one year, then renews every year at an increasingly higher premium. A person might buy yearly renewable term life because he or she wants to cover only very short-term debts, or is between jobs and anticipates buying group life insurance through a future employer.
AnnuitantThe person (or persons) who receives the payments of an annuity. Usually, the annuitant is the owner of the annuity, though some annuities have options to keep paying different beneficiaries after the original policyholder dies.
AnnuityA financial contract with an insurance company designed to be a source of retirement income. When you invest in an annuity through a lump sum or by making periodic payments over several years, your insurer in return agrees to make regular payments to you that can last your entire life.
Annuity CertainAn investment that provides a series of payments for a set period of time (say, five, 10 or 30 years). If you die before the end of the period, your beneficiary will receive the remainder of the payments for the guaranteed period.
American Memorial Life Insurance Company (AMLIC)The insurer/underwriter of Final Arrangements and Preplanning Solutions products.
ApplicationNo, it’s not that cool new program on your smartphone. In the insurance world, it’s a form requiring certain information when applying for insurance. It helps the insurance company decide whether to accept the risk and may affect premium rates.
AssigneeA person or organization receiving certain rights to a life insurance policy. For example, the insured can transfer the benefits of a policy to a bank as collateral for a loan. In this case, the bank is the assignee.
AssignmentTransferring benefits of a life insurance policy to another person or financial institution as collateral for a loan. If the insured dies, the lender is paid first and the balance (if any) is paid to the policy’s beneficiary.
Automatic Premium Loan (APL) ProvisionLet’s say you miss a payment on your whole life policy. Rather than cancelling your policy, the insurance company withdraws money from the policy’s cash value and uses it as a loan to pay the owed premium. Your insurance stays in force thanks to the Automatic Premium Loan Provision.
BeneficiaryThe person or persons who will receive the death benefit of your life insurance policy or annuity. This can be anyone … spouse or partner, child, a church or charity.
Benefit PeriodThe length of time that services are covered under your plan. It has a start and an end date. Most people are familiar with the benefit period for medical insurance, but term life insurance, disability, long-term care, homeowner's, and auto insurance policies will also carry a benefit period.
Cash Surrender ValueIf you cancel your whole life policy and take the cash value, the amount you may be able to walk away with is an amount known as the cash surrender value. This amount equals the cash value minus a surrender charge, any outstanding loans and interest on those loans.
Cash ValueTypically when you have whole life insurance, a portion of your premiums go into an investment account, or the cash value. This money grows with interest over time. You can do many things with the cash value, including taking out a loan, using it for any needs that arise or funding the policy. The longer you’ve had the policy, the higher the cash value will be. Please remember that loans do accrue interest and any outstanding loan balance reduces the death benefit at the time of claim.
Collateral AssignmentTransferring ownership of an asset from the borrower to the lender until the loan gets fully paid. The transferred asset can be the borrower's life insurance. If the borrower is unable to pay, the lender can cash in the life insurance policy and recover what is owed.
Contingent BeneficiaryThink of a contingent beneficiary as your backup — the person who will receive proceeds of a life insurance policy in the event your primary beneficiary is no longer around.
Contingent OwnerThe person who will become owner of a life insurance policy if the original owner dies before the policy ends.
Conversion RightThe right to change a term life policy to a permanent one at the end of the term without having to take a medical exam. It’s beneficial because the policyholder can enjoy the benefits of permanent life insurance at an older age without evidence of insurability.
Cost BasisFor a permanent life insurance policy, this is the sum of all your insurance payments. If your cash value is higher than the amount you paid in premiums, the remaining money represents your gains. For example, if you paid $20,000 in insurance premiums and have a cash value balance of $25,000, you have a cost basis of $20,000 and the other $5,000 is from your gains.
Cost of InsuranceThe amount you pay for a life insurance policy, also known as the premium. The monthly rate may vary depending on age, health, gender and other considerations such as lifestyle and occupation. Poor health and extreme hobbies are likely to increase the cost of insurance.
Coverage End DateJust like it sounds, this is the day insurance coverage ends.
Coverage PeriodThe period of time (with a start and end date) an insurance policy covers the policyholder.
Coverage Start DateYour coverage start date – also called the “effective date” – is the day your coverage officially kicks in. Remember, your policy won’t pay any benefits until that exact date.
Death BenefitThe amount of money paid to the beneficiary of a life insurance policy when the insured dies.
Deceased Identity TheftThe crime of stealing the identity of a deceased individual. Also known as ‘ghosting,’ brings risk to their overall estate, including financial assets, credit cards, tax returns, etc.
Deferred AnnuityA type of annuity that delays, or defers, income payments until a later date of your choosing. There are two main phases: the savings phase, which is when you invest money into the account, and the income phase, which is when the plan begins paying you. Generally, the money earned on a deferred annuity is taxed only when you withdraw it.
Disclosure StatementAn official statement that outlines the terms, conditions, risks and rules of a financial transaction, such as an insurance policy, loan or investment.
Direct ResponseInsurance sold directly to you by an insurance company, usually by mail or online.
DividendA partial refund of premiums paid on permanent life insurance. Similar to the dividends paid by a company to its shareholders, the amount paid to policyholders depends on the insurance company’s profits.
Dividend OptionNot all life insurance policies pay out dividends. But for those that do, the policyholder is given different options on how to use them. The dividend can earn interest, reduce the premium, purchase additional paid-up insurance, or be taken in cash.
Due DateThe date on which your monthly payment is due. You’ll want to keep track of this to make sure your policy doesn’t lapse!
Estate PlanningEnd-of-life planning that is done in advance. An estate plan may include a will, identified beneficiary, and a power of attorney.
Evidence of Insurability (EOI)Part of the application process for a life or health insurance policy where an applicant provides health information, such as medical history. The EOI can determine whether you’re approved for coverage and how much your premiums will be.
ExecutorAn individual named by the insurer who manages the estate of the deceased and executes the terms identified in a will.
ExpenseYour insurance policy’s share of the company’s operating costs. This includes things like medical exams, underwriting, printing costs, advertising, agency expenses, premium taxes and salaries. These costs figure in to your dividends and premium rates.
Extended TermA nonforfeiture option in a whole life policy that uses cash value to purchase term insurance equal to the existing amount of life insurance. This allows you to continue receiving coverage for a limited time without paying premiums.
Face AmountThe amount of money a life insurance policy will pay upon the insured’s death. The name comes from the fact that this amount is typically shown on the "face" or top sheet of the policy.
Family BenefitInsurance that provides coverage for an insured's spouse and children.
Final Expense InsuranceFinal expense insurance is whole life insurance policy meant to provide funds for the insured’s final expenses after death. Final Expense Insurance is life insurance sold through licensed insurance producers that do not usually have specific relationships with a funeral home. The death benefits are paid to the identified beneficiary and may be used to cover funeral expenses, debt, or other outstanding bills.
Financial Needs Analysis“How much insurance do I need?” A Financial Needs Analysis can help answer that question. It looks at your current financial situation, your needs and wants, and how you plan to achieve your goals. This can help ensure that your family is provided for and that your finances are in order.
Fixed Amount OptionMost life insurance policies pay death benefits in one lump sum. The Fixed Amount Option is one alternative that pays your beneficiary a series of fixed amount payments until the proceeds run out.
Fixed Period AnnuityAn annuity that pays you income for a specified period of time, such as 10 years. This could be a good option if you have a specified period of time that you will not be earning income. For example, if you were retired, an annuity could provide income after regular income has stopped but before retirement or other benefits begin.
Fixed Period OptionThe option in a life insurance policy that makes death benefit payments for a set length of time. The number of payments is fixed, while the benefit amount is determined by the proceeds in the policy. For example, a benefit of $800 per month is paid for a period of 36 months.
Free Look Provision
A certain amount of time (usually 30 days) to examine an insurance policy and return it to the company for a full refund if not satisfied.
Full Life Insurance
A phrase sometimes used to refer to Permanent Life Insurance or Whole Life Insurance.
Goods & Services Contract/AgreementAn agreement between the funeral home and customer that details the items and services selected for burial and/or funeral. A Goods & Services agreement may include (but is not limited to) the casket, cost of the funeral, flowers, transportation, preparation of the body, etc.
Grace PeriodThe period of time a policy stays in force even after a premium payment is due and goes unpaid. It’s usually a month so don’t wait too long to make things right.
Group Life InsuranceLife insurance that covers an entire group of people (as opposed to individual coverage). Employers usually offer group life insurance to their workers as part of a larger benefit package. Typically, the coverage ends when you leave the company.
Guaranteed Insurability Option (aka Guaranteed Purchase Option)A rider that ensures you will be able to buy more insurance in the future as your need for coverage increases. Generally, you will be allowed to purchase additional life insurance at specified ages without having to provide evidence of insurability.
Guaranteed RenewableThe right to continue your insurance each year as long as premiums are paid. Even if you develop a serious health condition and have a lot of claims, you have the assurance that your insurance will stay put.
No Current Definitions
Immediate AnnuityAn annuity purchased with a single payment that pays a guaranteed income starting right away. It’s common for immediate annuities to last 10 or 20 years. They can even continue for the rest of your life if you choose to make it last that long.
Incontestable ClauseSometimes, errors are made when applying for life insurance. That’s where an Incontestable Clause can protect you, the insured. It prevents the insurance company from cancelling coverage due to a misstatement on your application after a certain amount of time has passed, usually two or three years.
Insurable InterestWith regards to life insurance, someone having an insurable interest in you means that they would experience financial loss and hardship if you die. This is required when purchasing life insurance on another person.
Insurance PolicyThe physical, legal document that an insurance company issues to the policyholder which outlines the terms of the insurance.
InsuredThe person who is covered by an insurance policy. You’re bound to come across this word when reading through your policy and it’s important because it’s probably you!
InsurerThe company that underwrites the insurance policy and pays out claims. It’s important to choose an insurer who is reliable and financially stable.
Interest OptionIn some cases, the primary beneficiary of a life insurance policy may not need the full death benefit all at once. Instead, they may choose to receive only interest payments while the insurance company holds the money (called the Interest Option). This way, they can access the full death benefit later on or pass it on to a secondary beneficiary, in effect, creating a policy on themselves.
IntestateA situation in which someone dies without a legal will. The distribution of the deceased's assets then becomes the responsibility of a probate court.
A life insurance policy beneficiary who cannot be removed from a policy unless they agree to be, and who also has the power to prevent the policy holder from canceling the policy without their approval. For example, if a spouse is an irrevocable beneficiary, that person cannot be removed as a beneficiary even if the couple divorces.
Juvenile Insurance PolicyLife insurance purchased by an adult that insures children, typically under the age of 15. This is often permanent life insurance that has a savings component and guarantees the child coverage as an adult.
No Current Definitions
LapseTermination of coverage due to nonpayment of premiums within a specified time period. A lapsed policy no longer pays benefits or provides coverage.
Lapse RateThe rate at which insurance policies are cancelled because of unpaid premiums. Not surprisingly, the more expensive a policy is, the higher the lapse rate.
Last Conversion DateThe last day a policy can be converted from term life insurance to whole life insurance to avoid losing money paid on premiums.
Life ExpectancyThe number of years someone is expected to live, based on statistical research. Insurers factor in life expectancy when determining the premium for certain policies, particularly life insurance.
Life Income with Period Certain AnnuityA type of annuity that guarantees income for a certain number of years. This allows you to specify when the benefit will start and how long it will last to meet your retirement and estate planning needs, as well as your lifespan expectations. Common time frames for a period certain annuity are 10, 15, or 20 years.
Life InsuranceLife insurance is a contract with an insurance company that helps financially protect your loved ones if you pass away. You pay your premiums, and, if you pass away while coverage is in place, the company pays a lump sum (called a death benefit) to your beneficiaries. This money can help them with things like funeral costs, rent or mortgage, day-to-day living expenses, education costs and more.
Lifetime CoverageAn insurance policy that lasts for your entire life, as long as premiums are paid. Whole life insurance is a type of permanent life insurance designed to provide lifetime coverage.
Living BenefitsPart of a life insurance policy that lets you access funds while you’re still living, usually to cover the cost of care if you were to have a terminal or catastrophic illness.
Living WillA legal document that specifies the type of medical care an individual does or does not want in the event they are no longer able to communicate their wishes.
Medical Information Bureau (MIB)A computer database that stores medical and some non-medical information for fraud detection purposes. This information is used by insurance companies to assess an applicant’s risk and eligibility for life and health insurance.
Medical ReportA report on the health of a life insurance applicant that is filled out by a doctor following a physical examination.
Misstatement of AgeIf an applicant for life insurance misstates their age, the insurer, during a length of time known as the "contestability period," may choose to cancel the policy, increase the premiums or adjust the policy amount.
Mortality RateThe frequency of death at each attained age. Life insurance companies use mortality rates to determine life insurance rates that make sense for both the consumer and the company.
Mortgage Life InsuranceAs the name implies, mortgage life insurance is a policy that pays off the balance of your mortgage should you die. The payout goes to the mortgage lender, not your family.
Non-ForfeitureOne of the choices available if the policyholder stops paying on a life insurance policy with cash value. Options include taking the cash value in cash or using it to purchase extended term insurance or reduced paid-up insurance.
Non-Forfeiture ClauseA clause in an insurance policy with cash value that entitles the insured to all or a portion of the benefits, or a partial refund on premiums paid, if the insured person misses premium payments and the policy lapses.
Non-Forfeiture ProvisionsPrivileges allowed under the terms of a life insurance contract after cash value has been created. Options include: 1) surrender for full cash value; 2) paid-up insurance for however much the cash value will purchase; and 3) term insurance for the full face amount.
Non-Participating Life Insurance Policy
A life insurance policy that does not share in the insurance company’s surplus earnings and does not pay dividends. If you want to own a participating policy with dividends, you will likely need to buy whole life insurance.
Non-Smoker RatesIt’s no secret that non-smokers are expected to live longer than smokers. For this reason, they are often rewarded with lower life insurance rates. Anyone who hasn’t smoked for at least a year before applying for a life insurance policy may benefit from this discount.
OwnerThe person who purchased an insurance policy. He or she is usually the same as the insured but in certain cases, the owner could be someone who has been authorized to be the owner, such as a spouse, a child, or a parent.
Paid-Up AdditionsUsing dividends earned by a whole life insurance policy to purchase additional coverage and grow additional cash value.
Paid-Up InsuranceA whole life policy that is paid in full, remains in force, and you no longer have to pay any premiums. It’s a great option for someone who has recently received an inheritance or has come into money.
Participating InsuranceA life insurance policy that pays dividends to the policyholder. Dividends are generated from the profits of the insurance company and are typically paid out on an annual basis over the life of the policy. If you want to own a participating policy, you will likely need to buy whole life insurance.
Payout Option (annuities)When you invest in an annuity, you choose the term of the payments you’ll receive. Three of the most common payout options are lifetime payments (which continue for as long as you live), period certain (say, five years or 30 years) and joint-life payments (which continue for as long as either you or your spouse lives).
Payout Phase (annuities)The period during which the money accumulated in an annuity is paid out as regular income payments. You can choose to receive these payments for a specific period of time (such as five or 30 years) or for the rest of your life.
Period Certain (annuities)An annuity that provides guaranteed income for a set period of time (say, five years or 30 years). If you die before the end of the period your beneficiary will receive the remainder of the payments for the period.
Permanent Life InsuranceA life insurance policy that lasts your entire lifetime, as long as premiums are paid. One of the most common types of permanent life insurance is one you’ve likely heard of: whole life insurance. It can build cash value over time, as well as provide a death benefit to your beneficiaries.
PolicyA written contract between you and the insurance company stating the terms of insurance.
Policy DividendMany whole life insurance policies provide dividends representing a portion of the insurance company’s profits that are paid to policyholders; policyholders are not typically guaranteed dividends. The dividend amount often depends on the amount of money paid into the policy. Dividends are typically not guaranteed and are subject to the financial performance of the insurance company.
Policy LoanLet’s say you own a whole life insurance policy and need emergency cash. One option is to get a policy loan, which accesses the cash value of your life insurance. You’re not actually withdrawing the cash value, it’s simply being used as collateral on the loan. Keep in mind that loans accrue interest and if the money isn't paid back, the money is withdrawn from the policy’s death benefit.
Policy ProceedsThe amount of money actually paid on a life insurance policy at death, or when the policyowner receives payment at surrender or maturity.
PolicyownerAlso known as the policyholder, this is the person who owns an insurance policy. It’s usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.
Power of AttorneyA document that allows you to appoint someone to manage your affairs if you become unable to do so. This may include performing financial transactions with your resources, making decisions regarding your medical treatment, or both. You can name anyone you want to be power of attorney, but it should be someone you trust completely.
Preferred RatesThe healthiest people with the safest lifestyles are the least risky to the insurance company, so they are placed in the categories that qualify them for the lowest rates, called preferred rates. Considerations include health, gender, smoking habits, occupation and hobbies.
PremiumThe amount of money you pay for an insurance policy. Depending on the policy, premiums can be paid monthly, quarterly, semi-annually or annually. Factors such as your age, health, gender and coverage amount all determine your premium amount.
Primary BeneficiaryThe first person in line to receive the insurance policy death benefit. This is often a spouse, sibling or child. With most policies, you can change your beneficiary at any time.
Prearranged Funeral InsuranceSometimes referred to as Funeral Insurance, Prearranged Funeral Insurance is a whole life insurance policy purchased to fund a prearranged funeral contract. Often the prices are guaranteed. This insurance policy is assigned to the funeral home, and a seperate beneficiary may also be named. At the time of death, the death benefit is paid to the funeral home that performed the services.
ProspectusA legal document that describes a security, such as a stock, bond or mutual fund, to potential investors. A prospectus contains facts about the company (or fund), its finances, management, and other information that can help investors make an informed decision.
An annuity purchased with pre-tax dollars. The money that you put into the plan is tax deductible when you contribute it, but all of the money you later receive from the annuity payouts will be taxable, since you haven't yet paid tax on it.
The basis for an additional charge to the standard premium because the person insured is classified as a greater than normal risk. This usually results from impaired health or a hazardous occupation.
Reduced Paid-UpIf you own a whole life policy, the reduced paid-up option would allow you to give up your existing
coverage and instead receive a reduced death benefit that needs no additional payment of premiums. That reduced amount is based on the cash value at the time you stop the policy.
ReinstatementRestoring a policy that had previously lapsed due to unpaid premiums. This is usually allowed during the 31 days following the expiration of an insurance policy's grace period. Reinstatement requires payment of all overdue premiums plus interest, and may require evidence of insurability.
RepatriationThe process of returning remains of a loved one to the primary country of the deceased, then to the preferred funeral home.
ReplacementThe act of terminating a policy with an insurance company and replacing it with a new policy. Policyholders sometimes replace their policy with a new one to get more or less coverage, to lower the premium payment, or to switch to a policy better suited to their needs. Replacement transactions are highly regulated to help protect consumers.
Revocable BeneficiaryA type of beneficiary designation that can be changed without the beneficiary's consent.
RiderAn optional add-on to an insurance policy that provides additional benefits for an increased cost. Examples of life insurance riders include accelerated death benefits and critical illness riders.
A settlement is the way your life insurance policy proceeds are paid out. Options include a lump-sum cash payment, life income, or periodic payments for a certain amount of time. As a policyholder, you can usually choose the settlement method you prefer though your beneficiary may also get to choose.
A provision in a life insurance policy that denies payment if the insured person takes his or her own life within a set period after the policy is issued, typically two years.
An agreement between a life insurance company and a policyholder or beneficiary in which the policy’s proceeds are paid over a period of time instead of as a lump sum. For example, a beneficiary may decide that he wants to be paid $1,000 a month by the life insurance company. The insurance company could then set up a supplementary contract with the beneficiary reflecting this payout method.
The fee deducted from a life insurance policy or annuity payout when a policyholder cancels (or “surrenders”) the policy. Surrender charges typically decline over time, though some policies impose surrender fees for as long as 15 to 20 years after you buy a policy.
TermThe specific time period for which the insured person is covered under a term life policy. The insured person can be covered for a set number of years (usually 10, 20 or 30 years) or until the person reaches a certain age, such as 80. The policy pays benefits only if the insured dies during the term.
Term ConversionThe right to convert a term life insurance policy to a permanent, whole life policy. Usually the insured can convert to a permanent policy at the same amount of coverage without providing evidence of insurability. This means you can have lifelong protection regardless of your health as long as you convert before the deadline listed on your policy.
Term Life InsuranceA life insurance policy that provides death benefit protection for a certain length of time, usually 10, 20 or 30 years. The policy pays a benefit to your beneficiaries should you pass away during the term. Once the term expires, you can either renew it for another term, convert the policy to permanent coverage, or allow the policy to end.
TruStage Life of CanadaFor 50 years, TruStage Life of Canada has provided funeral preplanning solutions, final expense solutions and products created to reduce the obligations of an executor.
TrusteeAn individual, named by the insurer who manages trusts established during one’s life and at death.
UnderwriterThe person in an insurance company who reviews the application for insurance and decides if the applicant is acceptable and at what premium rate. For life insurance, the underwriter will look at a number of data points, including your lifestyle, occupation, medical record, financial history, and driving record.
UnderwritingThe process by which an insurance company reviews your application and other information and decides whether to insure you and if so, how much you’ll pay for coverage. For life insurance, the underwriter looks at data like your age, health and medical history as well as lifestyle information like your hobbies and driving record.
Union Security Insurance Company (USIC)The insurer/underwriter for a closed block of business that is internally referenced as a legacy product.
Universal Life InsuranceA type of life insurance that can protect you for your entire life, while offering the flexibility to change your premium or benefit amount as life takes twists and turns. Universal Life Insurance also allows you to build cash value over time that you can use for unexpected expenses that come up.
Variable AnnuityA tax-deferred retirement vehicle that allows you to choose from a range of investments, including stocks, bonds and money market accounts. A variable annuity can be affected by the performance of the investments you choose. Compare that to a fixed annuity, which provides a guaranteed interest rate, regardless of what may happen in the market.
Variable Life InsuranceA type of permanent life insurance that has a cash value investment component, similar to what whole life insurance offers. The main difference is that a variable policy's cash value is invested in in accounts that are similar to mutual funds rather than a savings account. The cash value may rise or fall depending on the performance of the investments you choose.
Waiver of PremiumA rider or supplemental benefit that helps prevent your life insurance from lapsing if you become incapable of making payments. If you become too sick or injured to work, this rider goes into effect and covers your policy premiums. Qualifying scenarios would include things like severe injury, permanent illness or some other catastrophic life change that results in you becoming disabled.
Whole Life InsuranceA type of life insurance that provides a set amount of coverage for your entire life. You pay the same premium amount for the life of the policy, so you always know what to expect. In addition to providing a death benefit, whole life policies build cash value over time – money you can use if the need arises.
WillA document describing what you want to happen to your assets when you die. You can also name your heirs, a guardian for your minor children and an executor for your will – the person to collect and distribute your assets. Remember, a will is only enforceable if it complies with the probate laws of your state.
Withdrawal ChargeThe amount deducted from the accumulation or account value of a policy if a withdrawal occurs within a specific number of years following policy issue.
No Current Definitions
No Current Definitions
No Current Definitions
10, 15, 20, 30-Year Insurance Policy
A life insurance policy that covers you for 10, 15, 20 or 30 years, known as the term. If the insured passes away during this time, the insurance company will pay his or her beneficiaries. Once the term ends, so does the policy.
Think of it as a way of trading in your life insurance policy or annuity for a new one without any tax penalties. The exchange must meet the requirements of Section 1035 of the Internal Revenue Code for the transaction to be tax-free.