Basic life insurance terms

• Life insurance. Life insurance is a contract between a policyholder and an insurance company.
• Insured person. An insured person is the person whose death is covered by a life insurance policy.
• Beneficiary.
• Mutual life insurance companies.
• Cash value account.
• Surrender value.
• Dividends.
• Underwriting.

What are the most common variations of whole life insurance?

Whole life or permanent insurance pays a death benefit whenever you die—even if you live to 100! There are three major types of whole life or permanent life insurance—traditional whole life, universal life, and variable universal life, and there are variations within each type.

Which whole life policy premium type is most common?

Whole or ordinary life This is the most common type of permanent insurance policy. It offers a death benefit along with a savings account. If you pick this type of life insurance policy, you are agreeing to pay a certain amount in premiums on a regular basis for a specific death benefit.

Who are the components of a life insurance policy?

In addition to the financial components of life insurance policy, there are other entities that also play a role. These are the policy owner, the insured, the insurance company, and the policy beneficiary.

Which is the most common type of life insurance?

Whole life insurance is the most common type of permanent insurance policy. In addition to providing cash benefits to your beneficiaries upon your death, the coverage comes with guaranteed cash value during the life of the policy.

What kind of insurance is whole life insurance?

Whole Life Whole life insurance is the most common type of permanent insurance policy. In addition to providing cash benefits to your beneficiaries upon your death, the coverage comes with guaranteed cash value during the life of the policy.

What is the cash value of a life insurance policy?

The amount is the cash value stated in the policy, minus a surrender charge, any outstanding loans and interest on those loans. The cash value represents the savings component of a life insurance policy, since you can access the money relatively quickly if you need to.