Did you know? Most people overestimate the cost of life insurance by 3× — for many healthy adults, coverage runs less than $1 a day. — LIMRA
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Glossary

40 life insurance terms, in plain English.

A reference guide. No jargon, no loopholes, no fine print. If a term you need isn't here, email hello@unitedtrustlife.com and we'll add it.
ABCD EFGH ILM NOP RST UW
A
Accelerated Death Benefit rider
A policy feature that allows the insured to access part of the death benefit while still alive if diagnosed with a terminal or chronic illness. Most UTL policies include this at no extra cost.
Annual Renewable Term
A term life policy where the premium increases each year as you age. Cheapest in year one, expensive by year twenty. Usually a poor fit for long-term gap-filling.
B
Beneficiary primary / contingent
The person or entity named to receive the death benefit. "Primary" is first in line; "contingent" receives the benefit only if the primary cannot. Review after marriage, divorce, or new children.
Benefit Period
The length of time a policy provides coverage. For term life, this is the term length (e.g., 20 years). For whole life, this is your entire lifetime.
C
Cash Value
The savings component inside a whole life policy that accumulates tax-deferred. You can borrow against it for emergencies, a down payment, or retirement income without triggering taxes.
Conversion Window
The limited period (typically 31 days) after leaving a group plan during which you can convert to individual coverage without new medical underwriting. Rates are higher than open-market individual rates.
Contestability Period
The first 2 years of a policy, during which the insurer can investigate and deny claims for material misrepresentation on the application. After 2 years, a claim cannot be contested on these grounds.
D
Death Benefit
The amount paid to beneficiaries when the insured passes away. Also called "face amount" or "face value."
Dividend participating policies
A refund paid by mutual life insurers to policyholders when company performance exceeds projections. Not guaranteed, but common on participating whole life.
E
Effective Date
The date coverage officially begins. Different from the application date — coverage starts when the insurer issues the policy and the first premium is paid.
Estate Tax
Federal tax on large estates. Life insurance death benefits are generally income-tax-free but can count toward estate tax thresholds (~$13M federal exemption in 2026).
F
Face Amount
The death benefit. The amount the policy will pay out when the insured dies. Not the same as cash value.
Fraternal Benefit Society
A member-owned insurance organization operating on a non-profit basis for a shared group — religious, ethnic, or occupational.
G
Grace Period
The window (typically 30–31 days) after a missed premium payment during which the policy remains in force. Miss the grace period and the policy may lapse.
Group Life Insurance
Coverage provided through an employer or union covering many people under a single master policy. Usually not portable and often ends at retirement. See union guide →
Guaranteed Issue
Coverage sold without any health questions or medical underwriting. Premiums are higher, coverage amounts lower, and there's typically a 2-year waiting period before full death benefit applies.
H
Health Class
The rate category assigned during underwriting, reflecting your health, lifestyle, and risk factors. Common classes: preferred plus, preferred, standard plus, standard, table-rated.
I
In Force
A policy that is currently active — premiums are current and coverage applies.
Insurable Interest
The legal requirement that the policy owner have a financial or emotional stake in the insured's life. Spouses, children, and business partners qualify; strangers do not.
L
Lapse
Termination of a policy due to non-payment of premium beyond the grace period. Some policies can be reinstated with back premium and proof of insurability; others cannot.
Level Premium
A premium that does not change over the life of the policy. Whole life premiums are level for life; some term policies have level premiums for the term length.
Loan, Policy
A loan taken against a whole life policy's cash value. Not taxable (because you're borrowing your own money), but unpaid loans reduce the death benefit.
M
MIB Medical Information Bureau
A nonprofit database insurers use to share medical history for fraud prevention. Most underwriting pulls a record from MIB.
N
No-Exam Policy
A policy issued without a physical exam, using "simplified issue" underwriting based on health questions and database checks. Most UTL policies are no-exam. See FAQ →
Non-Forfeiture Options
Options for what happens to cash value if a whole life policy is surrendered — cash surrender, reduced paid-up insurance, or extended term insurance.
O
Owner
The person or entity that controls the policy — pays premiums, names beneficiaries, and can cancel or borrow against it. Usually, but not always, the same as the insured.
P
Paid-Up Addition
Additional permanent coverage purchased with policy dividends, increasing both death benefit and cash value over time.
Portability
The ability to keep a policy when you change employers or leave an organization. Individual policies are portable; group policies typically are not.
Premium
The amount paid to keep a policy in force. Can be paid monthly, quarterly, or annually.
R
Rated Policy
A policy issued with a higher-than-standard premium due to health or lifestyle risk factors. Sometimes described in "tables" — Table 2, Table 4, etc.
Rider
An optional policy add-on that provides additional benefits — accelerated death benefit, waiver of premium, child term rider, etc.
S
Simplified Issue
Underwriting based on a short set of health questions — no physical, no blood draw. The approach used for most UTL policies.
Surrender Value
The cash amount paid to the policyholder if they cancel a whole life policy. May be less than total premiums paid, especially in early years.
T
Term Life Insurance
Coverage for a fixed period (10, 20, 30 years). No cash value. Expires worthless if you outlive the term. Cheaper per dollar of coverage than whole life.
U
Underwriting
The process an insurer uses to assess risk and decide whether to issue a policy, at what price, and at what health class.
Universal Life
A type of permanent insurance with flexible premiums and adjustable death benefit. More complex than whole life — variations include indexed UL and variable UL.
W
Whole Life Insurance
Permanent coverage for your entire lifetime with level premium and cash value accumulation. The main product UTL places for union gap-filling. See union guide →
Waiver of Premium
A rider that waives premium payments if the insured becomes totally disabled. Coverage continues without premium until disability ends or the insured reaches a specified age.