Final Expense Insurance Glossary
Understand insurance terminology with our comprehensive glossary of final expense and life insurance terms.
A
Accelerated Death Benefit
A provision that allows policyholders to receive a portion of their death benefit while still alive if diagnosed with a terminal illness.
Actuary
A professional who analyzes risk and uncertainty, helping insurance companies set premiums and reserves.
Age Verification
The process of confirming an applicant's age, often required for insurance coverage.
B
Beneficiary
The person or entity designated to receive the death benefit when the insured person passes away.
Burial Insurance
Another term for final expense insurance, specifically designed to cover funeral and burial costs.
C
Cash Value
The savings component of a permanent life insurance policy that builds over time and can be borrowed against.
Claim
A request made to an insurance company for payment of benefits due under an insurance policy.
Contestability Period
Usually the first two years of a policy during which the insurance company can investigate and potentially deny claims for misrepresentation.
Coverage Amount
The dollar amount of protection provided by an insurance policy, also known as the death benefit or face amount.
D
Death Benefit
The amount of money paid to beneficiaries when the insured person dies.
Declined Coverage
When an insurance company refuses to provide coverage to an applicant, usually due to health or other risk factors.
E
Elimination Period
A waiting period during which certain causes of death may not be covered under a new policy.
Evidence of Insurability
Proof that a person qualifies for insurance coverage, typically through health questions or medical exams.
F
Face Amount
The dollar amount of life insurance coverage, equal to the death benefit.
Final Expense Insurance
A type of whole life insurance designed to cover end-of-life expenses such as funeral costs, medical bills, and debts.
Free Look Period
A period (usually 10-30 days) after purchasing a policy during which you can cancel for a full refund.
G
Grace Period
A period (usually 30-31 days) after a premium due date during which the policy remains in force even if payment is late.
Graded Benefit
A type of life insurance where the full death benefit is not available immediately but increases over time.
Guaranteed Acceptance
Life insurance that accepts all applicants within certain age ranges without health questions or medical exams.
H
Health Questions
Medical inquiries on insurance applications used to assess an applicant's health risk.
I
Immediate Coverage
Life insurance protection that begins as soon as the policy is issued and the first premium is paid.
Insurable Interest
A financial relationship between the policyholder and the insured person that justifies insurance coverage.
Issue Age
The age of the insured when the policy is first issued, used to determine premiums.
L
Lapse
The termination of a policy due to non-payment of premiums.
Level Benefit
Insurance coverage where the full death benefit is available from the first day the policy is in force.
Level Premium
A premium that remains the same amount throughout the life of the policy.
Life Settlement
The sale of a life insurance policy to a third party for more than its cash value but less than its death benefit.
M
Medical Exam
A physical examination sometimes required for life insurance coverage (not typically required for final expense insurance).
Modified Coverage
Insurance where the death benefit or coverage terms change after a certain period.
N
No Medical Exam
Life insurance that doesn't require a physical examination, relying instead on health questions or guaranteed acceptance.
Non-Contestable Clause
A provision stating that after a certain period (usually 2 years), the insurer cannot contest the policy for misstatements.
P
Policy
The legal contract between the insurance company and the policyholder outlining coverage terms and conditions.
Policyholder
The person who owns the insurance policy and is responsible for paying premiums.
Premium
The amount paid (monthly, quarterly, or annually) to keep an insurance policy in force.
Pre-existing Condition
A health condition that exists before applying for insurance coverage.
R
Rated Policy
Insurance coverage issued at higher than standard premiums due to increased risk factors.
Rider
An addition to a basic insurance policy that provides additional benefits or coverage.
S
Simplified Issue
Life insurance that requires only basic health questions and no medical exam for approval.
Suicide Clause
A provision that excludes or limits coverage for death by suicide within the first 1-2 years of the policy.
T
Term Life Insurance
Temporary life insurance that provides coverage for a specific period, typically 10-30 years.
Terminal Illness
A disease or condition that is expected to result in death within a relatively short time period.
U
Underwriting
The process of evaluating an insurance application to determine coverage eligibility and premium rates.
W
Waiting Period
A period of time that must pass before certain benefits become available under an insurance policy.
Whole Life Insurance
Permanent life insurance that provides coverage for the insured's entire life and builds cash value over time.
Need More Information?
If you don't see a term you're looking for or need clarification on any insurance concept, our licensed agents are here to help.
Licensed Agent NPN: 20704118