Listed below is a useful guide to life insurance terms. It is a list of definitions of life insurance terms that may or may not be familiar to you. Accelerated Benefit Provision
A provision in many new policies which will allow policy owner to receive a portion of death benefit early if insured person is diagnosed with a terminal illness or permanently confined to a nursing home.
Accidental Death Benefit A provision added to a policy that provides an additional benefit if insured dies from accidental causes.
Certificate
A document provided to a person insured under a group insurance policy that provides evidence that coverage exists.
Convertible Term Insurance
These policies allow conversion, without further medical evidence, to a different type of policy from an insurance company's range.
Decreasing Term Insurance
The sum assured decreases each year throughout term of policy.
Dependent protection
Where protection is required on a permanent basis rather than just for a specified term.
Evidence of Insurability
Medical and other information about a person applying for insurance that life insurance company keeps confidential, but uses to decide whether policy can be issued and what premiums will be charged.
Face Amount
The amount to be paid to beneficiary when insured dies.
Free Look
The right of policy holder to have a period of ten or more days to examine an insurance policy, and if not satisfied, return it to company for a full refund of all amounts paid.
Grace Period
A period of time after premium due date when an overdue premium may be paid without penalty. The policy remains in force throughout period.
Guaranteed Insurability
An option that permits policyholder to buy additional stated amounts of life insurance at certain times in future, without having to provide new evidence of insurability.
Illustration
A document used in life insurance sales presentations showing year-by-year numbers indicating how a policy will work.
Increasing Term Insurance
Under this option, benefit payable on death increases and is particularly useful to avoid sum assured being eroded by inflation.
Insured
The person whose life is covered by a life insurance policy.
Lapse
The discontinuation of insurance without cash value when required premium is not paid.
Level Term Life Insurance
In this form a policy will pay out a fixed sum on death during term.
Loan Value
The amount which can be borrowed by policy holder from company using value of policy as collateral.