Life Insurance Policy Meaning

Definition of life insurance policy: Contract between a life insurance company (the insurer) and the entity buying the policy (the insured or policy holder).. Financial Definition of term life insurance. Term life insurance is a policy which provides financial coverage during a set amount of time. Often considered the "simplest" form of life insurance, it is best suited for providing coverage or income for a short term and on a limited budget.. Term life insurance, also known as pure life insurance, is life insurance that guarantees payment of a stated death benefit during a specified term. Once the term expires, the policyholder can either renew it for another term, convert the policy to permanent coverage, or allow the policy to terminate.. As the name implies, the cost of insurance is the minimum amount of a premium payment required to keep the policy active. It consists of several items rolled together into one payment. COI includes the charges for mortality, policy administration, and other directly associated expenses to keeping the policy in force..

A universal life insurance policy allows you to build your wealth while assuring that you have a solid life insurance policy in place. as opposed to term life insurance. The major advantage of the universal life insurance policy is the potential to not have to pay life insurance premiums for life, yet still, be insured into your retirement.. Whole life insurance provides coverage for the life of the insured. In addition to providing a death benefit, whole life also contains a savings component where cash value may accumulate. These policies are also known as permanent or traditional life insurance..

Whole life insurance, or whole of life assurance (in the Commonwealth of Nations), sometimes called "straight life" or "ordinary life," is a life insurance policy which is guaranteed to remain in force for the insured's entire lifetime, provided required premiums are paid, or to the maturity date.. Term life insurance provides life insurance coverage for a specific amount of time. If you or your spouse passes away at any time during this term (usually 20–30 years), your beneficiaries (those you’ve selected to inherit your money) will receive a payout from the term life insurance policy..