Glossary of Life Insurance Terms
Permenant or Whole Life Insurance- premiums are higher initially however, unlike term they never increase as long as you keep paying them and these can also be used to set up your own personal pension fund.
Mortgage Protection Term Life Insurance- also applies to second mortgages has special riders geared for protecting your life insurance premium payment or providing income if only disabled or if you become unemployed.
Term Life Insurance: The least expensive form of Life Insurance as long as you are fairly young and healthy. You can purchase fairly large amounts of coverage for not a lot of money.
Premiums can be level for up to 30 years. Or you can buy different policies for different amounts and terms to cover different things. For example if you have small children you would want extra coverage for income replacement for your spouse while they are young but not once they grow up and leave home so 10-20 year term might be good here. If you have a mortgage we can write term policies for the exact length of your remaining mortgage payments or write several to account for the decreasing principle over time. Term Insurance Premiums however, tend to become unaffordable for large amounts of coverage especially after age 50 and are usually only available for purchase up to age 75 in some cases age 80. Can be renewed in most cases to age 90 if you can afford the premiums.
Universal Life Insurance: Universal Life Insurance- Level Premiums, accumulates cash value is actually a combination of term and permanent insurance. It accumulates cash value like whole life but as the term insurance increases in cost due to age the amount of your premium that accumulates the cash value decreases and in some cases the policy can become under funded and you may either need to infuse cash to keep it active and/or increase the amount of premium you are paying. It pays to carefully examine the quote and the projected values in the illustration provided by your life insurance agent.
Waiver of Premium - Waiver of Premium - waives premium payments in the event of disability usually till age 65 or till no longer disabled whichever comes first or waives premium payments in the event of disability or unemployment
Disability Income- Provides pre-set amount of income if you become disabled and unable to work.
Return of Premium- premiums refunded at the end of the term (10,15, 20 years) if not used
Level Premiums for the length of the term usually 10, 15,20,30 years then if you still need it the premiums increase
Non-Medical (no poking, prodding, blood or urine samples) up to $250,000 with select carriers
Child/Spouse insurance - add smaller amounts of term insurance for spouse or children to your policy(sometimes convertible to permanent insurance)
Accelerated Death Benefit - in the event of the diagnosis of terminal illness can opt to receive a percentage of the full face value before death.
Accidental Death & Dismemberment - pays double face value or specified amount over and above face value for accidental death.
Mortgage Protection Term Life Insurance- also applies to second mortgages has special riders geared for protecting your life insurance premium payment or providing income if only disabled or if you become unemployed.
Term Life Insurance: The least expensive form of Life Insurance as long as you are fairly young and healthy. You can purchase fairly large amounts of coverage for not a lot of money.
Premiums can be level for up to 30 years. Or you can buy different policies for different amounts and terms to cover different things. For example if you have small children you would want extra coverage for income replacement for your spouse while they are young but not once they grow up and leave home so 10-20 year term might be good here. If you have a mortgage we can write term policies for the exact length of your remaining mortgage payments or write several to account for the decreasing principle over time. Term Insurance Premiums however, tend to become unaffordable for large amounts of coverage especially after age 50 and are usually only available for purchase up to age 75 in some cases age 80. Can be renewed in most cases to age 90 if you can afford the premiums.
Universal Life Insurance: Universal Life Insurance- Level Premiums, accumulates cash value is actually a combination of term and permanent insurance. It accumulates cash value like whole life but as the term insurance increases in cost due to age the amount of your premium that accumulates the cash value decreases and in some cases the policy can become under funded and you may either need to infuse cash to keep it active and/or increase the amount of premium you are paying. It pays to carefully examine the quote and the projected values in the illustration provided by your life insurance agent.
Waiver of Premium - Waiver of Premium - waives premium payments in the event of disability usually till age 65 or till no longer disabled whichever comes first or waives premium payments in the event of disability or unemployment
Disability Income- Provides pre-set amount of income if you become disabled and unable to work.
Return of Premium- premiums refunded at the end of the term (10,15, 20 years) if not used
Level Premiums for the length of the term usually 10, 15,20,30 years then if you still need it the premiums increase
Non-Medical (no poking, prodding, blood or urine samples) up to $250,000 with select carriers
Child/Spouse insurance - add smaller amounts of term insurance for spouse or children to your policy(sometimes convertible to permanent insurance)
Accelerated Death Benefit - in the event of the diagnosis of terminal illness can opt to receive a percentage of the full face value before death.
Accidental Death & Dismemberment - pays double face value or specified amount over and above face value for accidental death.
