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Death Benefit: The sum of money paid to a beneficiary when a person insured under a policy dies.
Dividend: A refund of excess premium paid to the owner of an individual participating life insurance policy.
Permanent Life: Life insurance that is designed to provide lifelong protection with generally level premiums. There are three main types: whole, universal and variable. All permanent policies accumulate cash value.
Policy: The contract or agreement made between the insurer and the insured.
Premium: The payment to the insurance company for insurance coverage.
Term Life: Life insurance that provides coverage for a specific period of time, usually from one to 20 years. Term policies provide a death benefit only if the insured person dies during the term.
Universal Life: A permanent policy that gives the owner the right to vary premium payments and the death benefit within certain prescribed limits. The rate of return on the accumulation account fluctuates according to investment performance but will not fall below a guaranteed minimum rate of return, such as four percent.
Variable Life: A permanent policy under which the cash value of the policy may fluctuate according to the investment option performance of a separate account fund. Most variable life policies guarantee that the death benefit will not fall below a specified minimum.
Whole Life: A permanent policy designed to last for life and for which premiums stay level.
Glossary