9. Loan (Policy Loan)
A loan made by a life insurance company from its general funds to a policyowner on the security of the cash value of a policy. Generally, loans reduce the policy’s death benefit and cash value by the amount of the outstanding loan plus interest.

10. Paid-up Insurance
Insurance that will remain in force with no need to pay additional premiums.

11. Participating Policy
A life insurance policy that is eligible for the payment of dividends by the insurer (see also Dividend).

Permanent Life Insurance
Any form of life insurance except term; generally insurance that builds up a cash value, such as whole life. Coverage can last a lifetime.

12. Policyowner
The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a trust, partnership or a corporation.

13. Premiums
Payments to the insurance company to buy a policy and to keep it in force.

(Source:MetLife)

4. Dividend
A return of part of the premium on participating insurance that is based on the insurer’s investment, mortality and expense experience. Dividends are not guaranteed.

5. Face Amount
The amount stated on the face of the policy that will be paid in case of death. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.

6. Insurability
Acceptability to the company of an applicant for insurance.

7. Insured or Insured Life
The person on whose life the policy is issued.

8. Level Premium Life Insurance
Life insurance for which the premium remains the same from year to year. The premium is normally more than the actual cost of protection during the earlier years of the policy and less than the actual cost in the later years. The building of a cash value is a natural result of level premiums over a long period. Term policies generally have level premiums for the initial term, though they generally have no cash value. The payments in the early years, together with the interest that is to be earned, serves to balance out the underpayment of the later years.

(Source:MetLife)

1. Beneficiary
The person(s) named by the owner of the policy to receive the life insurance proceeds upon the death of the insured.

2. Cash Value/Cash Surrender Value
The amount that is available in cash for loans and/or withdrawals. Accessing cash surrender value may reduce the death benefit and may increase the risk of lapse. Withdrawals may be subject to surrender charges and could have a permanent effect on the cash value. Loans reduce the cash value and death benefit by the amount of the loan outstanding plus interest. If the policy is surrendered, the cash surrender value is paid to the policy owner.

3. Convertible Term Insurance
Term insurance that can be exchanged (converted), at the option of the policyowner and without evidence of insurability, for a permanent insurance policy.

(Source:MetLife)

14. Renewable Term Insurance
Term insurance that can be renewed at the end of the term, at the option of the policyowner and without evidence of insurability, for a limited number of successive terms. The rates generally increase at each renewal as the age of the insured increases.

15. Term Life Insurance
Life insurance that does not build up cash value and where the premium normally increases as the insured gets older.

16. Universal Life Insurance
A flexible premium life insurance policy under which the policyowner may change the death benefit from time to time (with satisfactory evidence of insurability for increases) and vary the amount or timing of premium payments. Premiums (less expense charges) are credited to a policy account from which mortality charges are deducted and to which interest is credited at rates, which may change from time to time.

17. Whole Life Insurance
A basic type of permanent life insurance which can provide lifetime protection at a level premium. Premiums must generally be paid for as long as the policy is in force.

(Source:MetLife)

Working with a life insurance advisor can address problems commonly faced by families that lose primary income earners. Suddenly the harsh reality that the life insurance they are depending on to help them survive after the loss of an income earner is not adequate. You may be single and want to make sure that the things that matter most to you are taken cared of.

In this scenario, a life insurance advisor can help develop strategies and come up with solutions for the protection of the financial future of his clients. Some questions that are addressed by a life insurance advisor include:
1. How much would your family need to have a secured future in case something happens to you now?
2. What type of life insurance suits your individual needs?
3. Do you have an updated coverage with most current benefits in the market?
4. Are there charities or causes you want to provide for?

In deciding on purchasing life insurance, there are a couple of basics you have to be informed about to make a sound decision. Remember that any type of insurance is a means of protection and should not be taken lightly. The same goes with life insurance and even more because this type of protection is not only meant for you but possibly for the loved ones that you will leave behind in case of death.

Some things you need to know about life insurance include:
1. There are two major types of policies
2. Insurance is not bought but sold
3. Whole life insurance is expensive
4. Policies of whole life are built on assumptions
5. Investments and insurances should be strictly separated
6. Purchase enough term coverage for your needs
7. Match the term to your needs
8. Purchase insurance while you are healthy
9. Be honest
10. Use the Internet to shop around

Image Source:life-insurance-cash-value.com

Life insurance deals with an unavoidable part of life that most folks would rather avoid, due to the less than pleasant circumstances it brings to mind. Even though our tendency is to not want to contemplate death, it is a necessity to have something to leave behind should the unthinkable happen to you. This way your your loved ones grieve only your passing and not financial dire straights. Life insurance can have several elements to it, depending on your choice of plans. Based on the amount of coverage you need, your premiums can vary quite a bit.

Getting the Lowest Premium:

Greater coverage through your life insurance policy results in higher premiums. By reducing the amount you wish to be paid out upon your death, you’ll be able to lower your premiums. However, don’t risk it too soon; instead, as you age and have fewer bills, you can reduce the payout. When you no longer have a mortgage or a car payment, you can cut back because your spouse won’t need to cover these expenses. You can decrease the payout when your children grow up, and you no longer need to support them. Another reduction can occur when each of you and your spouse begin to collect Social Security and any retirement funding you have available.

A lot of people are asking us why they are not allowed to just list down the people they want as beneficiary. Here’s the answer:

One can only qualify as your beneficiary when you fill out your application form if they are suffering financially when you die. In short, it is expected that these individuals will undergo financial loss because of your death. The usual beneficiaries include your husband/wife, children, extended family and business partners.

What are contingents or secondary beneficiaries? They are the ones will receive a benefit coming from your life insurance. They can only claim the benefits if the primary benefit dies at the same time. For example, if the insured individual and the primary beneficiary dies in a same time.

Will the company refuse to pay if you die?

A lot of people still have doubts on signing up for a life insurance policy because they don’t trust such programs. You have to keep in mind that an insurance policy is a legal contract between the insurer and the company. The law requires every insurance company to pay what is stated in the policy in harmony with the policy provisions. Majority of the policies have a two years giving period that determines if they can refuse payment for material misinterpretation of facts or fraud. A lot of policies exclude those who committed suicide in the first two years of policy.