Death Benefit: The amount of money paid to the beneficiaries upon the insured person's death. It is the main purpose of a life insurance policy and provides financial support to the loved ones left behind.
Short Story illustration:

Emily was a 34-year-old single mom with three young children who wanted to ensure her family's financial stability in case anything happened to her. She was in fairly good health and was able to purchase a $250,000 life insurance policy. Tragically, Emily passed away unexpectedly. Her grieving family received the death benefit from the insurance company on behalf of her children, which helped them cover funeral expenses, pay off debts, and maintain the children's standard of living during this difficult time. There was also enough money to set aside for her children's college education.

Premium: The regular payment made by the policyholder to the insurance company to keep the life insurance policy in force or active. It can be paid monthly, quarterly, biannually, or annually. If you are struggling with paying your premium, do not cancel your policy without speaking with your broker.
Short Story illustration:

David had been paying his life insurance premiums faithfully for many years. However, due to a financial setback, he struggled to make the payment for a couple of months. Worried about losing his coverage, he contacted his agent and explained his situation. Understanding his predicament, the agent worked with the insurance company to customize a more manageable payment plan for David, making it possible for him to keep his coverage and continue to protect his family's financial future.

Beneficiary: The person or entity named in the life insurance policy to receive the death benefit upon the insured person's passing.
Short Story illustration:

Sarah was a devoted grandmother who adored her grandchildren and wanted to leave a lasting legacy for them. She named them as beneficiaries in her life insurance policy. Unfortunately, Sarah fell ill and passed away surrounded by her family. During her last hours, she expressed how she was at peace, knowing that her grandchildren would receive the financial support to pursue their dreams. The insurance company distributed the death benefit among her beloved grandchildren, helping secure their education and future endeavors.

Cash Value: The savings component of a permanent life insurance policy that accumulates over time and can be accessed by the policyholder during their lifetime.
Short Story illustration:

Michael has had a permanent life insurance policy with cash value accumulation for several years. He has been paying the premiums diligently but hasn't noticed how much cash value his policy has accumulated. During his annual review with his independent agent, he was pleasantly surprised to discover that his policy had built up a significant cash value. Not long after, he needed funds for a down payment on a new home. Michael contacted the insurance company and utilized some of the accumulated cash value to make the down payment for his new home. This allowed Michael to achieve his dream of homeownership while maintaining his life insurance coverage.

Term Life Insurance: A type of life insurance that provides coverage for a specific term, usually 10, 20, or 30 years, comparable to renting a house rather than owning it. If the insured person passes away during the term, the beneficiaries receive the death benefit.
Short Story illustration:

Mark was a young professional who recently got married. He wanted to ensure his wife would be financially secure if anything happened to him. He decided to purchase a $500,000 term life insurance policy for 20 years since he had a limited budget. A few years into the policy, Mark unexpectedly passed away in a tragic accident. His wife contacted the insurance company and received the full death benefit. The funds helped her cover funeral costs and pay off Mark's debt and the mortgage. Having the funds available allowed her to grieve without the stress of how to survive without his income.

Underwriting: The process through which the insurance company evaluates an applicant's risk factors, such as health, lifestyle, and occupation, to determine eligibility for coverage and the premium amount.
Short Story illustration:

Rebecca wanted to secure life insurance coverage to protect her family. She completed the application, and the insurance company initiated the underwriting process. They requested her medical records and also conducted a review of her medications. As a result, they discovered that Rebecca had a pre-existing medical condition. However, the insurance company determined that her condition was well-managed and did not pose a high risk. Rebecca was then approved for coverage.

Policy Loan: A feature available in certain types of life insurance policies that allows the policyholder to borrow against the policy's accumulated cash value.
Short Story illustration:

Karen was aware of the benefits of cash value accumulation. As a result, she had been diligently building up cash value on her permanent life insurance policy for many years. She found herself facing a financial emergency and needed funds quickly. Instead of seeking a traditional loan, Karen explored the policy loan option offered by her insurance company. She contacted them, completed the necessary paperwork, and was approved for a loan using the cash value as collateral. This allowed her to address her urgent financial needs without disrupting her long-term financial goals.

Surrender Value: The amount of money available to the policyholder if they choose to terminate their life insurance policy before the end of its term.
Short Story illustration:

Robert had a life insurance policy that accumulated cash value. He considered surrendering the policy to access the accumulated cash when faced with a difficult financial situation. He contacted the insurance company to inquire about the surrender value. They explained the process and told him the amount he would receive upon surrendering the policy. After carefully evaluating his options, Robert surrendered the policy, receiving the surrender cash value, which provided him with much-needed financial relief during a challenging period.

Grace Period: A specified period after the premium due date during which the policyholder can make a premium payment without the risk of the policy lapsing.
Short Story illustration: 

Lisa had been consistent with her life insurance premium payments, but one month, she forgot to pay her premium by the due date. Worried about her coverage, she called the insurance company to explain the situation. The representative informed her that her policy had a grace period of 30 days. Her coverage would remain intact as long as she made the payment within that timeframe. Grateful for the grace period, Lisa paid promptly, ensuring her life insurance protection continued.

Convertible Term Insurance: A type of term life insurance policy that allows the policyholder to convert their policy into a permanent life insurance policy without undergoing additional underwriting or providing evidence of insurability.
Short Story illustration: 

Alex purchased a convertible term life insurance policy when starting his career. As the years passed and his financial situation improved, he wanted the long-term benefits of a permanent life insurance policy. Thanks to the convertible feature in his policy, Alex contacted the insurance company and expressed his desire to convert his term policy into a permanent one. Without needing a new application or medical exams, he converted his policy, ensuring lifelong coverage and financial protection for his loved ones.