SPEAKING THE

LANGUAGE OF
LIFE INSURANCE
Whether you want to provide protection for your loved ones,
prepare for retirement, or just be ready for the unexpected,
life insurance can be a valuable addition to your financial plan.
However, navigating the world of life insurance and understanding
the lingo can sometimes be a challenging task. With the help of
your LifeAnswers insurance professional and this guide, you’ll be
speaking the language and making informed, confident decisions.

Common Terminology
Death Benefit - amount a policy will pay out in the event of the death of the insured person.
Underwriting - process through which an insurer decides whether it will provide you with
life insurance based on potential risks associated with your age, past medical history and
other factors.
Premium - periodic payments you make in return for your insurance coverage, which can
be in the form of annual, semi-annual, quarterly or monthly payments.
Beneficiary - the person who receives the death benefit, or payout, upon the death of the
insured.
Cash Value - a feature of some permanent life insurance policies that you could potentially
withdraw or borrow from. The cash value grows tax-deferred so you don’t pay taxes on the
gains.
Riders - benefits that you can add to your policy, usually for an additional premium.

Term versus Permanent

Term life policies are sometimes referred to as temporary life and offer life insurance
protection for a specific period of time, usually 10, 20, or 30 years. Term life can provide the
flexibility and affordability you need to protect what is important to you while meeting your
needs and budget. You may also have the option to convert to a permanent policy in the
future.
Permanent life insurance, which includes whole life and universal life, is designed to
provide lifelong financial protection as long as the policy is in force. It also can build cash
value, tax-deferred, to provide funds for future needs such as paying off the mortgage,
education expenses, or medical costs.

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© Copyright LifeAnswers Financial Group. All rights reserved. This entire document is confidential and no pages can be presented individually.
 Types of Permanent Life Insurance
INDEX UNIVERSAL
WHOLE LIFE UNIVERSAL LIFE
LIFE (IUL)

ff Offers protection for your
entire life with premiums
that never increase
ff Provides guaranteed death
benefit
ff Build cash value you can
use while you are living to
help meet a wide range of
your financial goals
ff Provides lifetime protection
and cash value accumulation
potential
ff Amount and frequency of your
premium payments can be
adjusted
ff Can access money from the
policy via withdrawals and
loans
ff Choice to add policy riders
that can provide additional
living and death benefits
ff Same features as tradition-
al universal life but with an
opportunity to earn interest
linked to the performance
of an indexed account
ff The policy’s cash value is
protected from market risk
ff More cash value accumula-
tion potential than other UL
products

Benefits of Life Insurance Additionally with permanent

ff Guaranteed protection of your assets
ff Cover final expenses
ff Leave an inheritance to your heirs
ff Death benefit is generally income tax-free
ff Help pay off personal or business debt
coverage:
ff Tax-deferred growth of cash value
ff Protection from market risk
ff Source of tax-free supplemental income
for retirement
ff Maintain quality of living in retirement
ff Provide living benefits like college fund-
ing, money for long-term care, and money
for unexpected events

To learn more about life insurance, contact:

This is not a complete list of terminology or features of life insurance as products and features differ with various policies. Always consult your
insurance agent and your policy for a complete list of features and benefits. Access to cash values through borrowing or partial surrenders will
reduce the policy’s cash value and death benefit, increase the chance the policy will lapse and may result in a tax liability if the policy terminates
before the death of the insured. Index life insurance products are not registered securities or stock market investments and do not directly partici-
pate in any stock or equity investments.
© Copyright LifeAnswers Financial Group. All rights reserved. This entire document is confidential and no pages can be presented individually.