Life Insurance Key Terms

Understand the specifics of your policy through learning life insurance key concepts and terminology

Life insurance is important for many individuals, but how many truly understand the specifics of their policies, let alone the industry at large? By becoming well-versed on life insurance key terms, individuals are more accurately able to understand the industry, as well as what companies and policies are able to offer consumers. In addition, those who are interested in a career within the life insurance field should be especially dedicated to learning the industry's key terms, concepts and terminology used when it comes to the vast field of life insurance.

 

Accelerated death benefits

Accelerated death benefits is an option on many life insurance policies that gives proceeds to the insured individuals listed on the policy over their lifetimes, especially used in the event that an individual has an illness that has been deemed terminal. It is in lieu of traditional life insurance policies that will pay out the money to the policy's beneficiaries after the individual has passed away. If the insured becomes terminally ill, in need of extreme medical intervention or must be placed in a nursing home for care after creating his or her policy, the accelerated death benefits may kick in.
Try: LifeInsuranceHub.net explores the details of accelerated death benefits as a part of life insurance policies.

Variable life insurance

Variable life insurancecombines a mortality charge with a vehicle of savings. This takes place when policy holders choose from a number of alternatives that may be offered by insurance companies and policy brokers. In many cases, the savings vehicle that's offered to policy holders is a type of investment portfolio, such as a mutual fund. Many insurance companies will offer at least 10 different portfolio options and will manage the funds themselves within the company.
Try: The pros and cons of variable life insurance can be read about at LifeInsurance.net.

Contestability period

The contestability period is a duration of time during which the insurance company is not under any type of obligation to pay claims to its insured parties. In most instances, the contestability period is two years. The contestability period is often put in place because of material misrepresentation that was found in the application for the life insurance policy. When this period of time is over, the policy becomes incontestable.
Try: For more information on the contestability period of a life insurance policy, visit MickelsonLife.com.

Mortality charge

The mortality charge is the cost of the insurance protection that is applicable to the whole life product of a policy holder. Some mortality charges are referred to as current, and these are not guaranteed. Meanwhile, maximum mortality charges are the contract guarantees.
Try: The mortality charge as a part of a life insurance policy is explored at W-B-A.com.

Single premium life insurance

Single premium life insurance requires of applicants and approved policy holders a single lump-sum, up-front premium payment. Often, these premiums will be paid up throughout the lifetime of the individual who is insured under the policy. However, sometimes these policies do not guarantee that all future payments will be paid, so policies of this type need to be read over or written carefully.
Try: For an overview of a single premium life insurance policy, consider Investopedia.com.

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