Easy to Use Terms

The insurance industry uses some important terms that many intelligent consumers may not have reason to use in every day life. Sometimes, technical jargon can intimidate potential policy holders from making the smart decision to invest in an affordable life insurance policy that offers cheap monthly rates. There's more to a great life insurance policy than cheap monthly payments. Here are some common life insurance terms that will come in handy as you evaluate the cheap life insurance rates offered to you!

People in your life insurance policy

No matter what affordable life insurance offering cheap monthly rates, there will be important individuals affected by the policy. Here are some of the most important terms to know as you select the policy with cheap life insurance rates that is best for you.

Beneficiary

A beneficiary is whoever you name to receive (or "benefit") from your life insurance policy upon your death. Your beneficiary can be a single person or several persons. Depending on the insurance provider you select, you might even be able to name your pet cat, dog, or bird as a beneficiary!

Insured

The person whose life is insured by the life insurance policy. This could be you. Or it could be a loved one whose life you are insuring.

Policy Owner

As the title implies, this is the person who owns the life insurance policy. However, the insured and the policy owner are not necessarily the same person. A relative, partnership, or trust could own the policy.

Money and your life insurance policy

When you apply for a life insurance policy, you want to get the cheapest life insurance rates on the market. But not all life insurance policies are created equally. Some of these terms will help you decide with life insurance is best for your unique situation.

Dividends

Some, but not all, life insurance policies offer dividend options. A dividend allows you as the policy holder to receive back a portion of your premium. Participating life insurance policies tend to base dividends on your expense experience, mortality, and investment.

Face Amount

This is the amount of money available upon the death of the insured.

Premium

A premium is your regularly scheduled life insurance payment. Generally, payments are made once a month to the company offering you life insurance.

Term life insurance

With term life insurance, the cash value of the policy does not build over time. Additionally, as the insured gets older, premiums will increase. Learn more about the varieties of life insurance policies available.