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Life Insurance Terms

Outlined below are some terms and their definitions that are used very commonly when referring to life insurance.


Someone who is receiving, or could be qualified to receive the benefits of an insurance policy.

Cash Surrender Value

The amount that will be paid to the insured after canceling his cash value life insurance. This will end all benefits of insurance.

Convertible Term Life Insurance

A policy that let you switch term life insurance with a permanent life insurance.

Free Look Period

A period of up to ten days that you may cancel your policy within without being penalized.

Insurable Interest

Purchasing a life insurance policy on someone else if expected to suffer financial or emotional duress in the event of the insured's death.

No-load policy: A type of policy that some insurers sell directly to consumers without having to pay commissions to agents and brokers.

Permanent (cash value) life insurance: A type of life insurance that combines a death benefit with a cash value component that builds over time; offers lifetime protection.

Risk factors: Factors that the insurance company takes into consideration when calculating your premium for permanent or term life insurance; these include your age, your health, whether you use tobacco, your family health history, and the type and amount of life insurance you're buying.

Term life insurance: A type of life insurance that provides coverage for a specified period of time—generally one, 10, 20, or 30 years, or until the insured reaches 65 or 70 years of age.
Find out more about Term Life Insurance.

Universal life insurance: A type of permanent life insurance in which the cash value varies with the purchaser’s payments and the insurer’s investment returns.
Find out more about Universal Life Insurance.

Variable life insurance: A type of permanent life insurance in which the cash value fluctuates depending on the investments purchased by the purchaser for his or her portfolio.
Find out more about Variable Universal Life Insurance.

Whole life insurance: A type of permanent life insurance. Whole, universal, and variable life insurance each has their own provisions, but all cover you for the remainder of your life.
Find out more about Whole Life Insurance.