Life Insurance Terms Will Put You In The Know

Life insurance terms. Know what that means? Well, it can mean two different things when you refer to life insurance terms. The first is the terms by which you agree to an insurance plan. These terms are specifically laid out in the contract and will vary from company to company, and you need to read them over carefully.

But for the purpose of this article life insurance terms refers to the variety of strange and sometimes bizarre terms that may pop up when you’re reading an insurance site. Here are a few you should know before you start reading any such site.

Beneficiary: The person or persons who will benefit from your death. They’ll get the money from the insurance policy.

Premium: How much you pay to get the protection from the company. This can be paid on a monthly, bi-monthly or annual basis; it’s up to you, most of the time.

Term life policy: An insurance plan wherein your coverage only lasts for a pre-determined period of time. Once that time’s up you’ll have to renew.

Whole life policy: A plan wherein your coverage will last your entire life. Though more expensive than term coverage this brand of plan is recommended to go with once you’ve got enough money.

Policy Holder: He or she who took out the policy in the first place. When this person dies the policy is paid out by the insurance company.

Endowment Policy: A policy in which your protection is both a form of protection and a manner of investment. The company will probably invest your money in the stock market and you’ll reap the benefits. Just beware that your payouts may be smaller thanks to the increased risk of poor investment.

Policy term: Period during which you must pay monthly or yearly premiums in order to continue enjoying the protection these companies afford.

Understand a bit more? Look online and read up on the subject more extensively. You only understand the basics at this point, and should know more before you take the plunge and try to buy a policy.