Life insurance glossary - reading between the lines
If you have decided to apply for life insurance, you have taken the first step to ensure peace of mind for yourself and your loved ones. But do you understand exactly what you are getting, and what all of those confusing terms mean in the mountain of paperwork? Many insurance providers use hard to understand language, and not all customer service agents take the time to break down each term so that you know what you are signing up for.
To help you better understand the various jargon you will come across in life insurance quotes and applications, use this helpful glossary to read between the lines.
€ Annuities €" this is the same as a policy or life cover plan. In other words, it applies to the policy itself as well as the premiums that you are required to pay. Many providers use this term, so expect to see it a lot in the various documents you are given.
€ Premiums €" these are the monthly payments that you will make. Many insurers have set premiums, while others allow you to calculate premiums according to your budget. Always be sure that you can afford to pay this amount, as you may end up paying a lot of money for an extended time period. Also find out if life insurance premiums are reduced after a certain time.
€ Beneficiary €" this is the person or persons who will receive payouts in the event of your death. In some cases where you have included disability cover as part of your plan, you may be the person receiving this sum. Payments are generally done as a lump sum, anything from a few days to a few weeks after the claim has been made.
€ Claim €" this is the process of requesting the payouts, in the event of your passing. Your beneficiary or lawyer will usually go through this process. There are a number of documents required to claim, but in general the process should be fairly simple. Verification such as death certificate and ID documents are usually required to prevent life insurance fraud.
€ Term life €" this is a specific type of life cover that has a fixed time period. You should be able to ask your insurer whether this is possible, and they will also explain how this works. If you have any questions, it is essential to ask before you sign anything.
€ Whole life €" this is a long-term cover that can also give you interest on the payments that you make. If you are young and in good health, this option is often beneficial. In some instances, there may be factors that prevent you from taking out this option, such as pre-existing conditions or other terms.
Once you have received various life insurance quotes from major insurers that you trust, take the time to go through their plans and ask questions to be sure that you understand how it all works.
To help you better understand the various jargon you will come across in life insurance quotes and applications, use this helpful glossary to read between the lines.
€ Annuities €" this is the same as a policy or life cover plan. In other words, it applies to the policy itself as well as the premiums that you are required to pay. Many providers use this term, so expect to see it a lot in the various documents you are given.
€ Premiums €" these are the monthly payments that you will make. Many insurers have set premiums, while others allow you to calculate premiums according to your budget. Always be sure that you can afford to pay this amount, as you may end up paying a lot of money for an extended time period. Also find out if life insurance premiums are reduced after a certain time.
€ Beneficiary €" this is the person or persons who will receive payouts in the event of your death. In some cases where you have included disability cover as part of your plan, you may be the person receiving this sum. Payments are generally done as a lump sum, anything from a few days to a few weeks after the claim has been made.
€ Claim €" this is the process of requesting the payouts, in the event of your passing. Your beneficiary or lawyer will usually go through this process. There are a number of documents required to claim, but in general the process should be fairly simple. Verification such as death certificate and ID documents are usually required to prevent life insurance fraud.
€ Term life €" this is a specific type of life cover that has a fixed time period. You should be able to ask your insurer whether this is possible, and they will also explain how this works. If you have any questions, it is essential to ask before you sign anything.
€ Whole life €" this is a long-term cover that can also give you interest on the payments that you make. If you are young and in good health, this option is often beneficial. In some instances, there may be factors that prevent you from taking out this option, such as pre-existing conditions or other terms.
Once you have received various life insurance quotes from major insurers that you trust, take the time to go through their plans and ask questions to be sure that you understand how it all works.