Insurance Glossary

1. Term Insurance

Term insurance is a type of life insurance policy that provides coverage for a specific period or term, usually ranging from 1 to 30 years. This type of insurance is typically less expensive than other types of life insurance, such as whole life insurance, because it only provides coverage for a limited period of time. The policyholder pays a premium to the insurer, and if the policyholder dies during the term of the policy, the insurer pays a death benefit to the designated beneficiary. However, if the policyholder outlives the term of the policy, the coverage ends, and there is no payout.

Term insurance may be a good choice for individuals who have temporary financial obligations, such as a mortgage, or who want to ensure that their children are financially protected until they are grown and self-sufficient. Term insurance policies can also be used to supplement other types of life insurance, such as whole life insurance.

2. Living Benefits

Living benefits are optional features that can be added to a life insurance policy, which provide financial protection to policyholders while they are still alive. These benefits may include accelerated death benefits, which allow the policyholder to access a portion of the death benefit if they are diagnosed with a terminal illness or critical illness; long-term care benefits, which provide coverage for nursing home or home health care expenses; and disability income benefits, which provide income replacement if the policyholder becomes disabled and unable to work.

Living benefits can provide policyholders with additional financial security and peace of mind, as they can help cover unexpected expenses and provide income replacement if the policyholder becomes disabled. However, living benefits typically increase the cost of a life insurance policy, and not all policies offer living benefits. Policyholders should carefully consider their needs and the cost of adding living benefits to their policy before making a decision.

3. Universal Life

Universal life insurance is a type of permanent life insurance that combines a death benefit with a savings component. The policyholder pays premiums into the policy, which are invested by the insurer in a cash value account. The cash value grows over time, and the policyholder may be able to borrow against it or withdraw funds from it. Universal life insurance offers more flexibility than traditional whole life insurance, as policyholders can adjust their premiums and death benefit amounts over time.

Universal life insurance can provide policyholders with greater control over their policy and potential tax benefits. However, it can also be more complex and expensive than other types of life insurance, and the increased cost of the plan due to the fact it will never expire nor increase in price.

4. Accidental Death Insurance

Accidental death insurance is a type of insurance policy that pays out a death benefit if the policyholder dies as a result of an accident. This type of insurance is typically less expensive than other types of life insurance, as the risk of death from an accident is generally lower than the risk of death from other causes. Accidental death insurance may be purchased as a standalone policy or as a rider to a larger life insurance policy.

It is important to note that accidental death insurance only covers accidental deaths, and not deaths from natural causes or illnesses

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