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Life Insurance Key Terms and Definitions



The world of life insurance has its own dictionary and sifting through the jargon can feel overwhelming. That's why we're here to explain to you in a way that you understand. When you apply for life insurance, you are likely to encounter the following conditions:

Condition Duration

(Can also be called coverage period, coverage duration, insurance period)

The permit is a guaranteed length of time.

When you refer to life insurance, your term is how long your insurance will be in effect as long as you continue to pay the premium. At the end of the semester, you can either extend, renew or convert your insurance coverage, depending on your insurance.

Death Benefit

(Can also be called Face Amount, Policy Value, Payout Amount, Face, Proceeds)

Death benefit is the amount of money those you appoint as beneficiaries will receive when you die. You choose how much coverage (death benefit) you want your insurance to provide.

Premium

(Can also be called payment, cost, price)

Premium is the amount of money you have to pay for your insurance. Premiums can be paid in several frequencies such as monthly, quarterly, semi-annually or annually.

Beneficiary

Beneficiary is the word used for the unit or person that will receive the payment of your nominal amount if you die.

A beneficiary can be a person, such as a spouse or a child, or several persons, given different percentages of the nominal amount until 1

00 percent of the death benefit is reported. A beneficiary can also be an organization or a charity that would receive the money from your life insurance policy when you die.

Contingent Beneficiary

(Can also be called Secondary Beneficiary, Other Beneficiary)

you mention to get your life insurance payment when you die if the primary beneficiary can not.

Insurable interest

Insurable interest is required when you buy life insurance on another person.

This situation arises when an individual can prove that the death of another individual would affect the person financially.

Spouses, for example, rely on each other's income. One spouse has an insurable interest in the other spouse. Your neighbor is not dependent on your income, therefore he or she does not have an insurable interest and could not buy life insurance on you.

Inforce

Inforce means that life insurance is active. If the insured dies while the insurance is in force, the insurance company pays a death indemnity to the beneficiaries of the insurance.

Dispute period

insured dies during this time. If incorrect information is discovered, the insurance company can bring an action against payment of the compensation claim in the event of death.

The claim period usually lasts two years and begins immediately when you first buy the life insurance. , whether intentionally or not, in a life insurance application. If material representations are discovered during the disputation period after a claim for death has been made, the insurance company has the right to refuse payment.

Free Look Period

When you buy a life insurance, the insurance owner has a free look period to review the insurance and return it for full refund if they decide they no longer want coverage. This period is usually 30 days.

Response period

The response period is a length of time between the insurance's premium due date and the date when the insurance expires if the premium is not paid. This period is usually 30 days. If the insured dies during this period, the death benefit (minus the unpaid premium) will still be paid to the beneficiaries.


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