Life Insurance Glossary

Understanding life insurance shouldn’t feel complicated. At Life Policy Express, our U.S.-based team believes in honest, transparent information — no jargon, no pressure — just straightforward answers. Use this glossary to understand standard terms and make confident decisions about your coverage.

A

Accelerated Death Benefit

A feature that allows you to access part of your life insurance benefit early if you’re diagnosed with a terminal illness.

Accidental Death Benefit (ADB)

An optional rider that pays an additional amount if death results from a qualifying accident.

Agent

A licensed professional who helps you choose, apply for, and manage your life insurance policy.

Annuity

A financial product that provides regular income, often used for retirement planning.

B

Beneficiary

The person or entity who receives the death benefit when the insured person passes away.

Broker

An independent insurance professional who works with multiple carriers to find you the best coverage and rate.

Burial Insurance

A small policy designed to cover funeral and final expenses.

C

Cash Value

The savings portion of permanent life insurance that grows over time and can be accessed while you’re alive.

Convertible Term Life

A term life policy that allows you to switch to permanent coverage without a medical exam.

Coverage Amount (Face Amount)

The dollar amount your beneficiaries receive when the policy pays out.

D

Death Benefit

The amount paid to beneficiaries upon the insured person’s death.

Dividends

A return of premium from certain policies if the insurance company performs well.

E

Evidence of Insurability (EOI)

Information (often a health questionnaire or exam) used by insurers to determine eligibility.

Estate Planning

The process of preparing how your assets — including life insurance — will be distributed after death.

F

Final Expense Insurance

A smaller life policy intended to cover funeral costs, medical bills, or other end-of-life expenses.

Free-Look Period

The time (usually 10–30 days) after purchase when you can cancel your policy for a full refund.

G

Guaranteed Issue Life Insurance

A policy that doesn’t require medical questions or exams — approval is guaranteed.

Guaranteed Universal Life (GUL)

A permanent life insurance policy focused on lifelong protection with limited cash value.

I

Indexed Universal Life (IUL)

A flexible life insurance policy that combines lifelong coverage with potential cash value growth tied to market indexes — offering protection, flexibility, and tax-advantaged growth.

Insured

The person whose life is covered by the policy.

Insurer (Carrier)

The insurance company that issues and backs the policy.

L

Lapse

When a policy ends because premiums weren’t paid on time.

Level Premium

A premium that stays the same throughout the term or life of the policy.

Living Benefits

Features that let you use part of your policy’s value while you’re still alive, often for illness or long-term care.

P

Permanent Life Insurance

Coverage that lasts your entire life and builds cash value.

Policyholder

The owner of the life insurance policy (may or may not be the insured person).

Premium

The amount you pay for your policy — monthly, quarterly, or annually.

R

Rider

An optional add-on that customizes your policy (e.g., accidental death, critical illness, or long-term care).

Return of Premium (ROP)

A rider that refunds your premiums if you outlive your term policy.

T

Term Life Insurance

Coverage that lasts for a specific period (such as 10, 20, or 30 years) and is generally the most affordable option.

Underwriting

The process insurers use to evaluate your health and risk level before issuing a policy.

U

Universal Life Insurance (UL)

A flexible policy with adjustable premiums and cash value growth based on current interest rates.

V

Variable Universal Life (VUL)

A type of permanent life insurance that allows you to invest your cash value in various investment options.

W

Whole Life Insurance

A permanent policy with fixed premiums, guaranteed cash value growth, and lifelong protection.

Withdrawal

Taking money from the cash value of your policy while you’re still alive.

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