AD&D Insurance (Accidental Death & Dismemberment)
This coverage usually offered through a group policy, increases your life insurance benefit (usually double) if the death is due to an accident. The dismemberment benefit pays the insured in the event they have a loss, loss of use and/or permanent injury to body parts due to an accident.

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

Cash (Surrender) Value
The amount that is available in cash for loans and that may be available for withdrawals. Accessing Cash Surrender Value may reduce the death benefit and may increase the risk of lapse.

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

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.

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.

Insurability
Acceptability to the company of an applicant for insurance.

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

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 reserve is a natural result of level premiums. 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.

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.

Long Term Disability Insurance
This coverage protects the insured from the long term effects of an accident or illness that make him/her unable to continue to earn an income. Some policies protect the insured for a partial loss of income and/or the loss of a particular career (even if they can work in another career) or specialty. This is essential coverage for anyone who bases family economic decisions based on an earned income.

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

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, Universal Life or Variable Universal Life.

Policy Owner
The person or entity who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership, a corporation or a Trust.

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

Renewable Term Insurance
Term insurance which 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.

Short Term Disability Insurance
Usually offered through a group plan, this coverage protects the employee from an illness or accidents that temporarily removes the ability to earn an income. These plans usually pay a benefit for 90 to 180 days.

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

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.