Life insurance isn’t a pleasant thing to think about, and it may seem like an unnecessary expense. But if you have dependents who rely on you for financial support, then life insurance is really about protecting them in case something happens to you.

At Cornerstone, we will walk you through all the types of life insurance policies available, and which one is best suited to your lifestyle. Life insurance can be overwhelming, so we have compiled a list of the most common terms used when discussing coverage:

  • Beneficiary: The person or party named by the owner of a life insurance policy to receive the policy benefit.
  • Cash value: The savings element of a permanent life insurance policy that represents the policy owner’s interest in the policy.
  • Contingent beneficiary: The party designated to receive proceeds of a life insurance policy following the insured’s death if the primary beneficiary predeceased the insured.
  • Convertible term insurance policy: A term life insurance policy that gives the policy owner the right to convert the policy to a permanent plan of insurance.
  • Dividend: A return of part of the premium.
  • Face amount: The amount of the death benefit payable under a life insurance policy.
  • Irrevocable beneficiary: A life insurance policy beneficiary who has a vested interest in the policy proceeds even during the insured’s lifetime because the policy owner has the right to change the beneficiary designation only after obtaining the beneficiary’s consent.
  • Insurable interest: The interest an insurance policy owner has in the risk that is insured. The owner of a life insurance policy has an insurable interest in the insured when the policy owner is likely to benefit if the insured continues to live and is likely to suffer some loss or detriment if the insured dies.
  • Insured life: The person on whose life the policy is issued.
  • Original age conversion: A conversion of a term life insurance policy to a permanent plan of insurance at a premium rate, based on the insured’s age when the original term policy was purchased.
  • Permanent life insurance: Life insurance that provides coverage throughout the insured’s lifetime and also provides a savings element.
  • Policy anniversary: As a general rule, the date on which coverage under an insurance policy became effective.
  • Premiums: Amount paid to the insurance company to buy a policy and keep it in force.

Even if you already have life insurance through your employer, you may be underinsured. Contact Cornerstone Insurance Brokers today —we can work with you to ensure that there aren’t any gaps in your current coverage.

You may be interested: 5 Life Insurance Myths Debunked

Disclaimer: This post is provided for informational purposes only. The information provided herein is not intended to be exhaustive, nor should it be construed as advice regarding coverage. Eligibility for coverage is not guaranteed and all coverages are limited to the terms and conditions contained in the applicable policy.

Cornerstone Insurance Brokers is a full line insurance brokerage with offices in Woodbridge (Vaughan), Aurora, Markham, and Barrie. Cornerstone provides car insurance, home insurance, motorcycle insurance, farm insurance, equine insurance, rural insurance, business insurance, life insurance, disability insurance, critical illness insurance and health insurance, as well as employee group benefits all over Ontario.