Life Insurance Glossary: High-Impact Terms You Need to Understand
Definitions for the terms that most affect policy performance, ownership control, claim outcomes, and tax treatment.
Why Definitions Matter
- In life insurance, one contract definition can change tax treatment, claim approval, or policy longevity.
- Marketing language is not controlling; policy language and governing law are.
- Always verify term usage in your specific carrier contract.
Start With These First
- Beneficiary, owner, insured, and contingent beneficiary.
- Contestability period, grace period, nonforfeiture options, and reinstatement.
- Modified endowment contract (MEC), policy basis, and tax-free death benefit rules.
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