Final Expense Insurance Glossary

The essentials, translated into practical questions you can use when reviewing a policy or planning expenses.

A–C

Accelerated death benefit — A rider that may allow early access to part of the benefit after a qualifying diagnosis.
Beneficiary — The person or entity designated to receive policy proceeds.
Cash value — Value that may accumulate inside a permanent life policy.
Contestability period — An early period when an insurer may investigate application statements after a claim.

Death benefit — The amount payable under the contract when the insured dies.
Face amount — The policy’s stated benefit before adjustments such as loans.
Free-look period — The limited time to review and return a new policy for a refund.
Graded benefit — Coverage that pays a reduced natural-death benefit during specified early years.
Guaranteed issue — Coverage generally available without health questions, often with a waiting period.

Insured — The person whose life the policy covers.
Lapse — Loss of coverage after required premiums are not paid and available protections are exhausted.
Level premium — A scheduled premium intended not to increase with age.
Modified benefit — An early-period benefit formula that differs from the full face amount.
Nonforfeiture option — A contractual choice that may preserve some value after premium payments stop.

Owner — The person or entity with contractual control of the policy.
Policy loan — Money borrowed against available cash value; unpaid amounts may reduce proceeds.
Premium — The amount required to keep coverage in force.
Rider — An added contract provision that changes or supplements coverage.

Simplified issue — Underwriting based mainly on application health questions and database checks, usually without an exam.
Surrender value — The amount available if the owner ends a cash-value policy, after applicable deductions.
Underwriting — The insurer’s process for deciding eligibility, class, and price.
Waiting period — A defined period when the full benefit may not apply to natural death.
Whole life — Permanent life insurance with lifetime coverage potential, level premiums, and possible cash value.