Life insurance terms, explained
What these terms mean when they appear on life insurance. Each definition describes the term itself, not what to do about it.
- Beneficiary
- The person or entity you name to receive the death benefit.
- Cash value
- A savings component in some permanent policies that grows over time and can be borrowed against. Term policies have none.
- Contestability period
- An early window, often two years, during which the insurer can investigate and deny a claim for misstatements on the application.
- Death benefit
- The amount paid to your beneficiaries when the insured person dies, as long as the policy is in force.
- Level term
- A period during which your premium and death benefit stay the same. Premiums often rise sharply after it ends.
- Rider
- An optional add-on that changes or extends coverage, such as a waiver of premium or an accelerated death benefit.
Other policy types
These are general definitions. Your own policy is what governs your coverage, and the same term can be defined differently from one policy to the next. Read your own policy to see what these terms say in your document, cited to the page.