At Insurance Xchange, LLC, located in Lombard, IL, we understand that life insurance concepts can often be daunting. Many people find themselves overwhelmed with insurance terminologies, making it challenging to make an informed decision about their coverage. With this post, we aim to demystify some common life insurance jargon.
Premium
The premium is the amount you pay to the insurance company to keep your policy active. It could be paid monthly, quarterly, semi-annually or annually.
Beneficiary
This refers to the person (or people) who will receive the death benefit – a lump sum payment – when the policyholder passes away.
Term
The term is the length of time the life insurance coverage is effective. It could range anywhere from a specific number of years to a lifetime, depending on the policy.
Cash Value
In certain types of life insurance policies, like whole and universal life insurance, a portion of your premium goes into a cash value account that grows over time and can be borrowed against.
At Insurance Xchange, LLC in Lombard, IL, we want to empower our clients with knowledge. We believe it’s incredibly important to understand life insurance jargon, so you truly comprehend what you’re buying. We hope this quick rundown of some common terms brings you one step closer to understanding life insurance and the critical role it plays in providing financial support.
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Remember, no question is too small or insignificant when it comes to protecting your loved ones’ financial future. Always feel comfortable to ask, clarify and confirm before purchasing any policy.
