The jargon, in words a human would use.
An add-on that lets you take part of your death benefit early if you are diagnosed with a qualifying serious illness. What you take out reduces what your beneficiaries receive later. Terms vary by company.
A licensed person who helps you choose and apply for insurance. Agents are typically paid by commission from the insurance company, so it is fair to ask any agent how they are paid.
The person whose life an annuity is based on. Often it is the same person who owns the annuity.
A contract with an insurance company. You put money in, and later it can pay you income, often for a set number of years or for life. Different types work very differently.
The person, people, or organization who receives the death benefit when the insured person passes away. You can usually change this as life changes.
An agent who can work with several insurance companies on your behalf. Also see Independent agent.
An agent who sells products for one insurance company only.
Another word for the insurance company that issues the policy.
The savings part of a permanent policy, such as whole life or universal life. It grows over time and you can often borrow against it. Unpaid loans can reduce the death benefit. For tax questions, talk to a tax professional.
The payment an agent receives from the insurance company when a policy is sold. It is built into how the product is priced.
A window at the start of a policy, often the first two years, when the company can look more closely at the application if a claim comes in. Rules vary by state. Answering every application question honestly and completely is the best protection.
The backup beneficiary who receives the benefit if your first choice cannot.
The option to change a term policy into a permanent one without a new medical exam, usually within a set time window. Check your policy for the exact rules.
The money the insurance company pays to your beneficiaries when the insured person passes away, as long as the policy is in force and the claim is valid.
An annuity that earns interest at a rate set by the company, typically for a stated period.
An annuity whose growth is linked in part to a market index, with limits on both upside and downside. The formulas can be complicated, so ask for them in writing.
A short window after you receive a new policy or annuity when you can cancel for a refund. The length varies by state and product.
Extra time after a missed premium payment when your coverage stays in place. If the payment still is not made, the policy can lapse.
A type of policy that asks no health questions. It is generally easier to qualify for but usually has lower coverage amounts and may cost more for the coverage you get. Ask about waiting periods before the full benefit applies.
A state-backed safety net that may step in, within limits, if an insurance company fails. Limits and rules vary by state.
An optional add-on to an annuity that sets up a stream of retirement income using a formula in the contract. It usually carries a fee.
A policy provision that generally limits the company's ability to cancel your coverage over application mistakes after the contestability period ends. Fraud and other exceptions can apply.
An agent who can offer products from more than one insurance company.
The requirement that the person buying a policy would suffer a real loss if the insured person passed away, such as a spouse, a child, or a business partner.
The person whose life the policy covers.
When a policy ends because premiums were not paid. Some policies can be reinstated.
Term life where the death benefit stays the same for the entire term.
Features that let you use some of your policy's value while you are alive, under certain conditions. Examples include accelerated death benefit and cash value access.
A short health check, usually done at your home or workplace, with measurements like height, weight, and blood pressure and samples of blood and urine. It generally takes under an hour.
Coverage that skips the medical exam and relies on application answers and database checks. It can be faster, but may cost more or have lower limits than fully underwritten coverage.
The person who controls the policy and can make changes, such as naming beneficiaries. The owner and the insured are often the same person, but not always.
A permanent policy where no more premiums are due, but coverage continues.
Coverage designed to last your whole life, as long as it is kept in force. Whole life and universal life are the two most common kinds.
Money you borrow from the insurance company using your cash value as security. Unpaid loans and interest can reduce the death benefit.
The amount you pay to keep a policy in force, whether monthly, quarterly, or yearly.
A policy offered at a higher cost because of health or lifestyle factors the company considers higher risk.
Bringing a lapsed policy back into force, usually by paying what is owed and sometimes by providing updated health information. Time limits apply.
An optional add-on to a policy that adds a feature, usually for an added cost.
Moving money from a workplace retirement plan into another retirement account, often after leaving a job. Talk to a tax professional before moving money.
A kind of policy that asks a few health questions but does not require a medical exam.
A fee for taking out more than allowed from an annuity, or canceling a policy, during the early years. Ask for the surrender schedule in writing.
The amount you would receive if you canceled a policy that has cash value, after any charges and loans.
Coverage for a set period, such as 10, 20, or 30 years. It pays if you pass away during that time and generally costs less than permanent coverage. When the term ends, coverage ends unless you renew or convert.
The process an insurance company uses to review your application, health, and other details to decide whether to offer coverage and on what terms. No one can promise the outcome in advance.
Permanent coverage with flexibility to adjust premiums and the death benefit over time. The cash value depends on how the policy is built.
An annuity whose value moves with investment choices inside the contract. It carries market risk and fees. Ask for the full cost breakdown.
An add-on that waives your premiums if you become disabled and meet the policy's conditions.
Permanent coverage that lasts your lifetime as long as premiums are paid, and builds cash value you can borrow against.
Another name for a surrender charge on an annuity.