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Life Insurance and Term Glossary

Life Insurance may be written for personal or business purposes to provide replacement income in the event of death.

Term Insurance provides for specified amount of coverage for a specific period of time. Typical term policies are for ten, fifteen, twenty or thirty years with the death benefit (amount of coverage) being determined by the client’s estimate of their needs. Term insurance can be used for personal or business (Key person) needs. A key person policy reimburses businesses for financial losses due to the death of the key person in the business. There is no cash value in a term policy.

Universal Life Insurance serves the same purpose as term insurance with the exception that is accumulates a cash value with each passing year that it is in force. An advantage of Universal Life Insurance is that the cash value can be borrowed against if necessary. As a result of the cash value build up a universal policy more expensive.