Life insurance glossary

Application – A form that must be filled out to apply for life insurance.

Beneficiary – The person who receives the money from a life insurance policy when an insured passes away.

Cash value – The amount of money you can receive from your policy if you cancel it, or the amount of money you can borrow as a loan from your policy. Cash value is typically a feature with a whole life policy.

Coverage Amount – The face amount of a policy to be paid to a beneficiary after the policyholder passes away.

Final expenses – Expenses incurred once a person has passed away, including funeral and burial costs, medical bills and other financial obligations.

Financial strength ratings – The financial strength and stability of an organization determined by third party ratings agencies.

Free look period – A short period of time during which a new insurance policyholder can cancel a contract and receive a refund of any premiums paid.

Group life insurance – Coverage offered to you as a member of a group, such as a company for whom you work or an association to which you belong.

Group term life insurance – Group life insurance purchased for a specified length of time.

Group whole life insurance – Group life insurance purchased for the life of the policyholder. Most policies maintain a cash value.

Group guaranteed issue life insurance – Insurance designed for a group where every person who applies and meets conditions receives coverage.

Life insurance – Insurance to help protect against financial loss when a person dies.

No medical life insurance – Insurance available without a physical exam or blood work.

Permanent life insurance – Life insurance, such as whole life, that remains in effect for the life of the insured.

Policy – The insurance contract that explains the terms, conditions and features of the life insurance coverage.

Premium – The amount paid monthly or other frequencies to an insurance company for coverage.

Monthly Rate Quote – The estimated monthly cost for a life insurance policy.

Supplemental coverage – Additional insurance meant to help pay for expenses not covered by other policies.

Term life insurance – An insurance policy that provides financial protection for a set length of time. Term life insurance premiums are usually lower initially but can increase over the life of the policy.

Underwriting – The process to assess the eligibility and risk of issuing an insurance policy.

Whole life insurance – An insurance policy that provides lifetime coverage. Premiums are typically fixed for the life of the policy. Whole policies can also build cash value.

This article is provided by New York Life Insurance Company for informational purposes only. This article is not intended to provide tax, legal, financial, or accounting advice. Please consult your own professional for advice specific to your circumstances.