Life Insurance Dictionary

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One of the persons receiving the death benefit from an insurance policy upon death of the insured.
I am naming my wife as the primary beneficiary to my life insurance policy so she will receive the death benefit if she is still living when I pass away. My 2 kids are the secondary beneficiaries so if my wife dies before me, they will each receive half of the death benefit.

Death Benefit

The amount of money that is paid to a beneficiary of a life insurance policy, tax-free.
My life insurance policy has a death benefit of $750,000. That should be enough money to pay off my mortgage and replace my income for the next 15 years.

Fully Underwritten

When a life insurance policy requires an extensive look at the insured's health and other factors that might determine the life expectancy of that person. These policies can be more difficult to qualify for, but often have lower rates if the insured is accepted.
Since I am applying for a very large life insurance policy, the insurance company will use full underwriting to predict my life expectancy so the rates will be accurate.


The person whos life an insurance policy is based on.
When the insured dies, the beneficiary will get paid a tax-free death benefit.

Life Insurance

A type of insurance product that pays will pay money tax-free to someone's estate after the death of the person being insured.
When I die, I know my family will be taken care of because I took out a life insurance policy that will be enough to pay off my debts and replace the income that I make.

Permanent Life Insurance

A life insurance policy that is guaranteed to last until the insured passes away. These policies are typically designed so that the rates are guaranteed to never increase.
I went with a Permanent Life Insurance Policy so that my premiums will stay the same for as long as I live.

Premiums / Rates

The amount of money that is paid for a life insurance policy.
The premiums I'm paying on my $100,000 life insurance policy that purchased 2 years ago is $50 per month. After shopping around this year, I found another company with lower rates. They only charge $35 per month.

Simplified Underwriting

When a life insurance policy only requires answering a limited amount of yes/no health questions. These policies usually do not require a medical exam, but sometimes require a phone interview.
The life insurance policy I applied for had simplified underwriting. I was able to answer "No" to all of the health questions, and I was approved the same day!


The length of time that the rates on a life insurance policy are guaranteed.
My 20 Year Term Life Insurance policy only will only cost me $25 per month for the next 20 years!