THURSDAY, JUNE 8, 2023
Life Insurance is essential coverage. Regardless of whether you are familiar with life insurance coverage, there are some common terms to know. It’s important to understand and be familiar with the following terms, as a more profound understanding might assist you in deciding on the right coverage for you and your loved ones. 
Term life insurance: This type of life insurance is in effect for a specific period. Beneficiaries only receive the death benefit if the policyholder dies within the term.
Permanent life insurance: This type of life insurance, often referred to as whole life insurance, is lifelong and often includes a savings element. These features often result in higher premiums when compared to term life insurance.
Quote: An estimate of how much policyholders will pay for their life insurance premium.
Premium: This is how much a policyholder pays their insurance provider in exchange for coverage. Insureds typically pay premiums on a monthly or annual basis.
Death benefit: This is the amount the insurance provider pays to designated beneficiaries following the policyholder’s passing.
Primary beneficiary: This is the person or people first in line to receive the death benefit of the policyholder. Entities may also be designated as primary beneficiaries.
Secondary beneficiary: This refers to the person or people who will receive the death benefit of the policyholder if the primary beneficiary cannot do so. Entities may also be designated as secondary beneficiaries.
Underwriting: The insurance provider’s process of gathering information on someone seeking life insurance to determine the premium.
Rate class: This refers to the risk category life insurance applicants are sorted into based on factors such as their overall health, occupation and family health history. An individual’s rate class typically impacts their premium.
Paramed exam: This is the medical exam that life insurance applicants must take when applying for certain policies. The results generally factor into determining an applicant’s rate class.
Convertible: This refers to the term life insurance policy that can be converted into permanent life insurance.
Renewable: This refers to the term life insurance policy that can be renewed once a term expires.
Contact our agency to learn about essential life insurance terminology and the steps to acquire coverage.
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