Life insurance policy definitions may seem like alphabet soup, but here are some key terms you may want to know.
A is for accidental death benefit. This is an added benefit payable in addition to the principal benefit in the event of accidental death.
B is for beneficiary. This is the individual who will receive the life insurance benefits.
C is for cash value. This is the amount of cash value available in your policy’s account for withdrawal or loans.
E is for expiry. This refers to the termination of a policy at the end of its coverage period.
F is for face amount. This is the benefit that will be paid in the event of your death.
I is for insurability. This refers to an applicant’s level of acceptability to an insurance carrier.
J is for joint life annuity. This is a policy that will pay benefits that continue over the joint lifetime of two individuals but terminates after the first death.
M is for maturity date. This date indicates when the face value of your life insurance will become payable.
P is for principal sum. This is the amount that will be paid out as a lump sum in the event of your accidental death.
R is for renewable term insurance. This is a term life policy that is eligible for renewal at the end of the term.
S is for surrender. This is forfeiting a policy.
T is for term insurance. These are policies that are limited to a specific term.
Y is for yearly renewable term. This is a term life policy that you can renew annually without first having to provide evidence of your insurability.
Do you have questions or concerns about life insurance? Call or email us, and we can walk you through each of the components. We’re always here to help.