Life Insurance Glossary
ApplicantThe insured or policy owner applying for an insurance contract.
Assets
Property such as stocks, bonds, and real estate owned by an insurance company. A conservative valuation of assets is required by state insurance laws, which are concerned with the insurance company’s ability to pay claims and their solvency.
Beneficiary
The person or entity chosen by the owner of an insurance policy to be the inheritor of the policy benefits or proceeds.
Cash Value
The available amount of money in a permanent life insurance policy that can be borrowed as a policy loan or received in the event the policy is either allowed to lapse or becomes surrendered to the insurance company
Death Benefit
The amount of money that is payable to the beneficiary upon the death of the insured.
Declaration Page
The portion of the insurance policy that states the name and address of the insured, the location and description being covered, the premiums for coverage, the policy period, and the amount of coverage.
Face Amount
The amount of the benefit stated as payable upon the death of the insured. Also called the face value, the benefit is not variable.
Guaranteed Death Benefit
Guarantees that the beneficiary will receive a death benefit in the amount equal to the invested value of the contract, if the policyholder dies before the annuity begins paying benefits.
Insurance
A contract or policy in which an insurance company pools the risks of individual clients, or business entities, and in return, allowing for more affordable premiums in order to provide financial protection against losses.
Premium
The cost or periodic payments set by an insurer for providing insurance and keeping the policy active.
Premiums In Force
A sum that represents the life insurance premiums on all policies, which are still in force.
Term Insurance
Provides only life insurance coverage that is purchased for a specified period, such as 10 or 20 years. The entire face amount of the policy is payable to the beneficiary on the death of the insured. The premiums will generally increase at each renewal.
Whole Life Insurance
Life insurance that protects the beneficiary, builds cash value and can be borrowed against. The premiums can be locked in and guaranteed to remain the same over the life of the policy.