Most Commonly Used Terms in Life Insurance
Reader’s Question:
I am very unfamiliar with life insurance and the terms used for it. It seems to me there are just too many in Washington. Can you explain the most commonly used terms in life insurance?
Carlos
Bellingham, WA
There are indeed several terms akin to life insurance. But the truth is, it doesn’t take too long to figure these things out. There are online sites dedicated for defining terms used in life insurance, and there may even be sites giving out free quotes for life insurance. If you look closely, you will find out that this page is one such example. On this page, you will see a space bar asking for your zip code. Once you’ve typed in your zip code, there are a few questions you’d need to answer but they will be routine questions.
The most common term used in all life insurance policies is “death benefit”. This is the amount of money that the insurance company in Bellingham Washington WA will give you your pre-named beneficiary in the event of your death. Perhaps the next popular term is “premiums” which simply refers to the amount you need to pay to make your life insurance policy active. Then there is “term”, applicable only to term life insurance, which refers to the short duration of time the policy is applicable. The last word I’ll discuss would be “cash value” which is a sort of interest your money earns while it is with the insurance company in Bellingham Washington WA.
Your insurance agent (ideally) should be your first port of call. If you have any clarifications or uncertainties regarding your life insurance policy, do not hesitate to approach him.