Illinois Life Insurance – Everything you Wanted to Know

August 21, 2011 Category: Life & Long Term Care

If you’re like most people, reading an insurance policy can be confusing. It’s not the easiest read in the world even for me at times and I’ve been in the business for close to 25 years. Understand that all policies include definitions of the terms, however, the definitions are often written in terminology that we like to refer to as “insurance speak.”

To help you understand your policy a little easier I have put together some simple definitions:

• Death Benefit – The amount payable to your beneficiary upon your death.
• Beneficiary – the person or persons who will receive the death benefit upon your death. You can name primary and secondary (or contingent) beneficiaries.
• Secondary Beneficiary – the person who receives the death benefit if the primary beneficiary is no longer alive.
• Premiums – the amount of money payable to the insurance company on a regular basis.
• Lapse – the cancellation of your policy when premiums have not been paid.
• Term Insurance – insurance for a specified period of time.
• Permanent Insurance – insurance that is as guaranteed to pay a claim as death is to happen.
• Health Class – a classification system used by insurance companies to determine the risk you present to the company.- Better the health, less is the risk.
• Insured Person – the person whose life the policy covers.

Policy Owner – the person who owns the policy.- The owner and the insured are not always the same person.