Are you finding life insurance terminology confusing and needing assistance understanding your policy?
Let the professionals at Steiner Insurance Group in Nashville, NC, help you understand commonly used life insurance terms.
Life Insurance Terms Explained
Beneficiary: The "beneficiary" refers to the individual, individuals, or designated entity receiving the death benefits when the policyholder dies.
Cash Value: Some types of life insurance policies offer "cash value" features, allowing withdrawals or borrowing against the policy before the policy owner’s death. Permanent life insurance policies often include provisions that let policyholders borrow against their policy for unexpected emergencies and significant life events.
Death Benefit: This is the predetermined amount insurance companies pay the beneficiaries upon the policyholder’s death. Death benefits are typically non-taxable, but it’s advisable to consult a trusted life insurance professional to ensure these benefits are not taxable in your specific situation.
Premium: The "premium" is the amount paid annually, monthly, or quarterly by policyholders to maintain their benefits. This amount can vary based on your policy type and individual circumstances. It’s recommended to consult with an agent to ensure you’re getting the best value for your money.
Term life insurance provides coverage for a specified term limit. For instance, a term life insurance policy may expire after 10, 20, or 30 years.
Underwriting: Life insurance professionals use underwriting to assess risk and determine the cost of your insurance premiums. Underwriters use mathematical formulas and risk assessment tools to evaluate factors like age, health, and lifestyle when potential policyholders apply for coverage.
Whole Life Insurance: These policies provide lifetime coverage for policyholders. Lifetime policies include special provisions and cash value options that aren’t available with term-life policies.
Contact Steiner Insurance Group in Nashville, NC, to learn more!
