Get Familiar With Life Insurance Jargon And Terms

To the beginner, the realm of insurance is riddled with minutiae and jargon. If you are new to the life insurance scene, you most likely find it quite a task, because of all the unfamiliar insurance-related technical terminology. To ensure you get a policy that suits your needs perfectly, you would need to be well informed before searching for life insurance plans in Texas.

Let’s delve into the key terms and phrases you’d need to familiarise yourself with as it will help you when you are setting up your policy.

Policyholder

A policyholder is a person who owns and has purchased the life insurance policy, maintaining the premiums. While the policyholder pays for the policy she or he is not necessarily the person covered in the insurance plan.

Beneficiary

Policyholders can choose a beneficiary or a legal heir to receive the cover benefit from the assured sum and other benefits in the event of their death. Typically parents, children, and spouses are named as beneficiaries of policyholders.

Premium

The sum you pay the insurance company to keep your policy active and benefit from continual coverage is called a premium. When policyholders fail to pay their premium prior to the payment deadline and even exceed the grace period then the policy will no longer be in force.

Death Benefit

The insurance company pays out what is termed a ‘death benefit’ to the beneficiary in the event of the death of the beneficiary within the insurance coverage tenure. Many people are opting for life insurance plans in Texas as part of their financial planning.

Surrender Value

In case a policyholder wants to exit the plan earlier than the maturity date, the policyholder will get an amount that is called a surrender value from the life insurance company.

Riders

As an add-on component, riders maximise the scope of the basic life insurance policy. On top of their base plan, policyholders can opt for various types of riders, though the types and number of riders offered by each insurer would not be identical.

Exclusions

Prior to purchasing life insurance plans in Texas, you would need to go examine the ‘exclusions’ thoroughly. Exclusions are the items that are not covered by a life insurance plan. It outlines the situations or circumstances under which the insurance company would not pay any benefit. 

Maturity age

Maturity age can be described as the age of the beneficiary at which the insurance plan terminates or ends. Essentially, the life insurance company sets the maximum age at the beginning, mentioning the duration till which the coverage will be carried on.

Now that you are familiar with various terms used in policies you won’t be confused with the complex jargon and terminology. You can make a well-informed decision while buying life insurance plans Texas.