Those who are entering the world of purchasing insurance really are facing some complexities in being able to understand the heavy insurance jargon that is whirling around on the market today. So there really are key insurance terms you need to know. Consider the fact that if you are looking for life insurance, though the term “accelerated death benefits” sounds terrible, horrifying and gruesome, it really is necessary to know this and to ask about it.
People often put off making decisions about purchasing life insurance policies because of all the struggles to comprehend the terminology that seems rather over the head so to speak for those outside the insurance industry. Thus families may be lacking a life insurance policy. And people who actually do purchase a life insurance policy seem not to realize what they indeed did purchase.
The truth of the matter is, that you must understand a life insurance policy to know if it is the right fit for you and your loved ones or not. So to help you on this important journey of understanding more about the jargon that is used in order to enable you to make the best choice about which life insurance policy is best for you to purchase, here are some key insurance terms you need to know that are listed below for your convenience.
Policy owner. That is the person who has purchased the policy and who controls the policy. The policy owner may have purchased life insurance for his or her own life or the life of someone else.
Premium. That is the amount that you are to pay for your life insurance policy monthly or yearly, depending on the payment options you choose.
Beneficiary. That is who receives the payment of the benefits of the life insurance policy upon the insured
Person’s death. There can be more than one beneficiary on the policy and those listed can receive different percentages of the payment of benefits, if the policy holder so wishes.
Death Benefit. This is the amount of money that is paid to the beneficiary that was listed on the life insurance policy by the policy holder.
Insured Person. This is the person that the policy holder has decided to insure while they are living.
Term Life Insurance. This is life insurance that endures for the stated amount of years that you select, which can range from five years all the way up to thirty years and more.
Accelerated Death Benefit. This intriguing term relates to the fact of the insurance policy providing money to the insured person while he or she is still living if he or she is terminally ill, because money is needed for various medical expenses, etc.
Permanent Life Insurance. This is a type of insurance that is paid for during the whole life of the person insured on the life insurance policy and has a cash value guaranteed of what will be paid to the beneficiary upon the death of the person who was insured. Before purchasing this kind of life insurance, make sure you consult with a financial advisor to help you understand the difference between this kind of policy and term life insurance, to determine which better suits your individual situation.