Beneficiary

The person (or people) who receive the death benefit when you pass. Should always be named specifically, not 'my estate.'

Cash value

The savings component of a whole life policy. Grows slowly, tax-deferred, and can be borrowed against after several years.

Death benefit

The tax-free amount paid to your beneficiary when you pass. On final expense, typically $5,000–$50,000.

Graded benefit

A policy where the death benefit is reduced during the first 2–3 years (usually returns premiums plus interest for natural death) and pays the full amount afterward.

Guaranteed issue (GI)

A policy that accepts every applicant in the age range regardless of health, with no health questions. Always has a graded benefit period.

Issue age

Your age when the policy is issued. Premiums are locked in based on this age — the younger you buy, the lower the lifelong rate.

Level benefit

A policy that pays the full death benefit from day one — no waiting period. Best rates.

Premium

The monthly (or annual) amount you pay to keep the policy active. On whole life, this is fixed for life.

Rider

An optional add-on to a policy — for example, an accidental death rider that pays double for accidental death.

Simplified issue

A policy issued based on a short list of health questions — no medical exam required.

Underwriting

The process the insurance carrier uses to decide whether to approve you and at what rate. Simplified underwriting uses only health questions; full underwriting uses medical records and exams.

Whole life insurance

Permanent life insurance that never expires as long as premiums are paid. Final expense is a type of whole life.