A little less jargon
Life insurance, in plain English.
Tap a term anywhere on the site for a quick definition. Here’s the full reference.
- Life insurance
- A contract that pays the people you name if you die while covered, subject to its terms and required premiums.
- Term life
- Coverage for a set period, often 10, 20, or 30 years. It generally provides a larger initial benefit per premium dollar than permanent insurance.
- Term for new parents
- Term coverage chosen to help support children and other dependents during the years they rely on you.
- Mortgage protection
- Life insurance sized around a home loan so beneficiaries can help keep the home. It is different from mortgage insurance that protects a lender.
- Final expense
- A smaller life policy intended to help with funeral costs and remaining bills. Beneficiaries generally choose how to use it.
- Whole life
- Permanent life coverage with contractual premiums and values, provided policy requirements are met. Loans and withdrawals can affect benefits.
- Kids plan
- A small permanent policy on a child. Some include future purchase rights; a child rider on a parent’s policy may cost less.
- Universal life
- Permanent coverage with some flexibility in premiums and benefits. Enough value or qualifying premiums must remain to keep it in force.
- Indexed universal life (IUL)
- Universal life with interest credits linked to an index formula. It is not direct stock investing, and policy charges can reduce value even with a zero-percent crediting floor.
- LIRP
- A strategy using permanent life insurance in retirement planning, not an IRS-defined account or product. Costs, funding, and policy status affect potential tax benefits.
- Cash value
- Value that builds inside certain permanent policies. Available surrender and loan values can differ from the account value.
- Policy loan
- A loan secured by your policy. Interest accrues; outstanding debt reduces available benefits and can cause lapse and tax consequences.
- Cap rate
- A limit on index-linked interest credited for a specified period. Non-guaranteed caps can change within contract limits.
- Floor
- The minimum index crediting rate for a period. Policy fees and loan interest can still reduce value.
- Participation rate
- The portion of an index gain used in crediting. An 80% rate on a 10% gain produces 8% before a cap or other adjustment.
- MEC (modified endowment contract)
- A policy that fails certain federal funding tests. Loans and withdrawals generally receive income-first tax treatment and may trigger an additional tax.
- Premium
- The amount you pay to obtain or maintain coverage. Payment schedules and guarantees depend on the contract.
- Death benefit
- Money payable after the insured dies while covered, subject to policy terms, loans, and any applicable benefit restrictions.
- Beneficiary
- The person or entity designated to receive the policy proceeds.
- Contingent beneficiary
- A backup recipient if the primary beneficiary cannot receive the benefit under the policy rules.
- Policy owner
- The person or entity with control over the contract, including beneficiary and loan decisions.
- Insured
- The person whose life the policy covers.
- Underwriting
- The insurer’s review of health, history, finances, and other information to decide eligibility and price.
- Health class
- An underwriting category used in pricing. Each insurer sets its own criteria.
- Paramedical exam
- An insurer-arranged health check that may include measurements and lab samples. The insurer generally pays for a required exam.
- Accelerated underwriting
- An application review using data and records that may avoid an exam for eligible applicants. Approval is not guaranteed.
- Simplified issue
- Coverage with health questions and usually no medical exam. The insurer can decline an application.
- Guaranteed issue
- Coverage available without health underwriting to applicants meeting eligibility rules. Natural-death benefits are often limited during an initial period.
- Rider
- An optional policy feature or additional benefit with its own conditions, exclusions, and possible cost.
- Child rider
- An addition to an adult’s policy covering eligible children. Benefit limits, age rules, and conversion rights vary.
- Waiver of premium
- A rider that may waive required premiums after a qualifying disability and waiting period, under the contract definition.
- Accelerated death benefit
- Access to part of a death benefit during life after a qualifying illness. It reduces what remains for beneficiaries and may have costs.
- Guaranteed insurability
- A contractual right to buy additional coverage at specified times without new health evidence, within stated limits.
- Conversion
- Changing eligible term coverage to a permitted permanent policy without new health evidence before the conversion deadline.
- Return of premium
- A term feature that returns qualifying premiums if you meet its conditions and outlive the term. It usually costs more.
- Survivorship (second-to-die)
- Coverage on two people that generally pays after the second death. Often considered for estate liquidity.
- Free look period
- A period after delivery when you can return a policy for a refund under applicable law and contract terms. Check your actual deadline.
- 1035 exchange
- A qualifying exchange between certain insurance contracts that may defer recognition of gain. Direction, ownership, loans, and handling matter.
- Estate tax
- A tax on qualifying transfers at death. The 2026 federal basic exclusion is $15 million per person, affected by prior gifts and other rules. Idaho has no state estate tax.
- ILIT (irrevocable life insurance trust)
- A trust designed to own life insurance under specific legal rules. Exclusion from an insured’s estate depends on ownership, control, transfer timing, and administration.
- Financial strength rating
- An independent rating agency’s opinion of an insurer’s ability to meet its obligations. It is not a guarantee, and rating scales differ.
- In-force illustration
- An updated projection for an existing policy using current values and assumptions. Separate guarantees from non-guaranteed outcomes.
- Graded death benefit
- A limited natural-death payout during an initial policy period. The benefit schedule, exceptions, and period depend on the contract.
- Portability
- A right to continue certain workplace coverage after leaving eligible employment, under the group plan’s terms and prices.
- Table rating
- An extra underwriting charge applied above an insurer’s standard rate for a particular risk assessment.
- No-lapse guarantee
- A promise to keep coverage in force if specified premium, timing, and other conditions are met, even when account value is low.
- Dividend
- A non-guaranteed distribution that some participating insurers may declare. Future dividends can change or be zero.
- Paid-up additions
- Small amounts of additional permanent coverage purchased without ongoing premiums for those additions, often using dividends.