Life Insurance glossary
Plain-language definitions of common life insurance terms.
- Beneficiary
- The person or entity named in a life-insurance policy to receive the payout when the insured dies.
- Full definition of Beneficiary
- Cash value
- The savings component of certain life-insurance policies (whole, universal) that grows over time and can sometimes be borrowed against.
- Full definition of Cash value
- Death benefit
- The amount an insurer pays to the beneficiaries when the insured person dies, as stated in the policy.
- Full definition of Death benefit
- Final expense insurance
- A small whole-life policy designed to cover funeral and burial costs. It is easier to qualify for but costs more per dollar of coverage than larger policies.
- Full definition of Final expense insurance
- Rider
- An add-on to a base policy that adds, removes, or changes coverage. Equivalent to an endorsement; the term "rider" is more common in life insurance.
- Full definition of Rider
- Term life insurance
- Life insurance that covers you for a fixed period (often 10–30 years). Pays a death benefit only if you die during the term; no cash value.
- Full definition of Term life insurance
- Universal life insurance
- A type of permanent life insurance with flexible premiums and a cash-value component that earns interest. Coverage can last your lifetime if the policy stays adequately funded.
- Full definition of Universal life insurance
- Whole life insurance
- Life insurance that covers you for your entire life and includes a cash-value component. More expensive than term life.
- Full definition of Whole life insurance