Life Insurance Glossary of Terms
Offered by Member Investment Services
Applicant — The person who applies to be insured under an insurance contract. The applicant may be the insured, policy owner or both.
Beneficiary — The designated recipient of the life insurance benefits or proceeds upon the death of the insured. Choosing the beneficiary is the policy owner’s right and responsibility.
Cash Value — The accumulated cash available in a permanent policy that the policy owner may borrow as a policy loan or receive if the policy is surrendered before maturity.
Convertibility — The right to convert one kind of policy to a permanent policy without evidence of insurability. Most term policies can be converted into permanent insurance.
Death Benefit — The amount payable upon the insured’s death.
Declaration Page — The section of your insurance policy containing basic information such as your name and address, the description and location of the insured property, the policy’s term, amount of coverage and premium amounts.
Decreasing Term — Provides a death benefit that declines throughout the contract’s term, reaching zero at the end of the term.
Endorsement — A written amendment made to a policy that changes the insurance policy’s terms by adding or subtracting coverage. Also known as a Rider.
Face Amount — The death benefit payable on a life insurance policy.
Grace Period — The period after the premium due date and before the policy lapses, usually 30 to 31 days, during which an insurance contract is in force and the premium may be paid without penalty.
Incontestable Clause — A clause that says the insurer cannot contest the statements contained in the policy application after a policy has been in effect for a given length of time, usually two to three years.
Joint Life — A life insurance policy written on two or more persons with benefits usually payable only at the first death. Designed to provide protection when both spouses have income.
Level Term — A term life insurance policy in which the face value remains the same from the effective date until the expiration date.
Options — A choice of methods for receiving policy dividends, non-forfeiture values, death benefits, or cash values.
Policy Owner — The individual who has the ownership rights in a policy, usually, but not always, the insured.
Premium — A regular periodic payment to keep an insurance policy in effect.
Proof of Insurability — Evidence that substantiates the acceptability of an insurance applicant.
Provisions — A clause or stipulation in an agreement.
Renewable — Life insurance that may be renewed for another term without evidence of insurability, regardless of changes in health.
Rider — A change or addition to an insurance policy that modifies the original agreement, usually, but not always, to increase benefits. When signed and executed, it has the same legal power as the original document.
Right to Examine — A period during which the policy owner may review the policy and return it if dissatisfied in any way, usually 10 days.
Single Premium Life — A life insurance policy paid for in one initial lump sum payment.
Surrender Value — The amount of cash available upon the cancellation of an insurance policy before it becomes payable upon death or maturity.
Term Life Insurance (Annual Renewable Term) — Life insurance that builds no cash value and that provides only temporary coverage for a specific period.
Universal Life Insurance — A life insurance policy that provides more investment flexibility than that offered by whole life insurance. With this policy, you can choose the initial death benefit amount, but have the power to change it any time after the initial payment. You can also choose how and when you want to pay your premiums, within the policy’s boundaries.
Variable Universal Life — A whole life insurance that combines the flexibility of Universal Life’s death benefits and premium choices with even more investment choices. Instead of accruing a cash value, as with Universal Life, the excess cash is placed in a separate investment account. Policyholders can then select the type of investment vehicle for the excess cash, with the freedom to move between various investment choices. You may choose the timing of these moves as well as the amount of premium payments.
Whole Life Insurance (Ordinary Life) — Life insurance that builds a cash value and for which premiums are paid for the insured’s entire lifetime, or until age 100.
Contact a Financial Advisor
- Discuss your needs over the phone, or schedule a consultation by calling 714/258-4000 or 800/462-8328, Monday through Friday, 9 a.m. to 5 p.m.
- Email investments@SchoolsFirstfcu.org
*Representatives are registered, securities are sold, and investment advisory services are offered through CUNA Brokerage Services, Inc. (CBSI), member
FINRA/SIPC, a registered broker/dealer and investment advisor, 2000 Heritage Way, Waverly, Iowa 50677, toll-free (866) 512-6109. Nondeposit investment and insurance products are not federally insured, involve investment risk, may lose value, and are not obligations of or guaranteed by SchoolsFirst FCU. CBSI is under contract with SchoolsFirst FCU, through the financial services program, to make securities available to Members.
CUNA Brokerage Services, Inc. is a registered broker/dealer in all fifty states of the United States of America.
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