Know the Meaning of These Life Insurance Terms So That You Don't Get Duped

A Insurance Article Contributed by Brandie King

Introduction to Life Insurance Terms

Life insurance is one of the basic necessities in life. It can help to make sure your children are taken care of if you die. It can help to pay off your debts (such as your car or home) in the event of your death. It can cover your funeral and burial costs when you pass away and take the financial burden of these costs off of your family. So now that you know why life insurance is important, you need to understand some of the words that are used in regards to life insurance policies so that you will not get duped.

A - L Life Insurance Terms

Accelerated Death Benefits - Some policies will allow you to collect the death benefit you are entitled to by your policy if you require long term care or are terminally ill and about to die.

Annuity - This is a type of insurance that allows you to save up for your retirement. You buy the policy and pay your insurance company for a certain amount of time so that when you retire they will pay you a set amount each month.

Convertible Term Insurance - This is a term insurance policy that can be converted to a permanent one without the need for a medical exam or the need to prove insurability.

Disability Waiver - Some life insurance policies have this as a feature and it allows you to keep your insurance without premium payments should you become disabled.

Insurable Interest - When you have an insurable interest in somebody you have a family or financial connection to them. This is required for you to be able to buy a life insurance policy on somebody.

Level Premium Policy - With this type of policy your premium will stay the same every year.

P-Z Life Insurance Terms

Policy Loan - Some permanent insurance policies will allow you to get a loan based on the policy. Be careful if you do this though, because if you do not pay back the loan the amount of the loan is taken from your death benefit.

Permanent Insurance - This is a policy that has no time limit and that allows you to build up cash value.

Riders (Endorsements) - Riders and endorsements are changes made to your policy.

Term Insurance - This is a policy that lasts for a set period of time and which does not allow you to build up any cash value. If you want to keep the policy after the set period of time is up, then you will have to renew it at then current rates based on your then current age.

Universal Life Insurance - This is flexible form of permanent insurance. It allows you, with certain limitations, to change the value of the death benefit, payments, and the frequency with which you pay those payments.

Variable Life Insurance - This is a risky form of permanent insurance. This type of policy can give you an very good return on your money because the insurance company will invest the premiums you pay for you. Any proceeds gained from the investment will cause your death benefit and policy cash value to rise. If the investments do badly then the death benefit and policy cash value go down.

Whole Life Insurance - This is a basic form of permanent insurance. With whole life insurance you will usually pay a set premium, receive a set death benefit, and the policy cash value will raise at a set rate.