Definitions of Terms

death benefit:
The amount of money paid or due to be paid when a person insured under a life insurance policy dies. This amount does not include adjustments for outstanding policy loans, dividends, paid-up additions, or late premium payments.

convertible term insurance:
A type of term insurance that allows the policyowner to change the term insurance policy to a whole life policy without providing evidence of insurability.

renewable term insurance
A type of term insurance which includes a renewal provision that gives the policyowner the right to renew the insurance coverage at the end of the specified term without submitting evidence of insurability.

yearly renewable term (YRT) insurance
Term life insurance that gives the policyowner the right to renew the coverage at the end of each year. This renewal right continues for a specified number of years or until the insured reaches the age specified in the contract.

rider
An amendment to an insurance policy that becomes a part of the insurance contract and expands or limits the benefits payable. Also called an endorsement.

premium
The payment, or one of a series of payments, required by the insurer to put an insurance policy in force and keep it in force.

permanent life insurance
Life insurance that provides coverage throughout the insured's lifetime and also provides a savings element that builds a cash value.

term insurance
Life insurance under which the benefit is payable only if the insured dies during a specified period.

policy
A written document that contains the terms of the contractual agreement between an insurance company and policyowner.