Glossary

Every term, one line.

The words you will hear on a call or read on a policy, without the fine-print voice.

Accelerated death benefit: A rider that lets you draw part of the death benefit while alive after a terminal diagnosis, usually with a life expectancy of 12 to 24 months.
Accidental death benefit: An extra amount paid if death is the result of an accident. Also the part of a guaranteed issue policy that pays in full from day one.
Annual Enrollment Period (AEP): October 15 to December 7, when anyone on Medicare can change Advantage and Part D plans for the coming year. More

Beneficiary: The person or entity who receives the death benefit. The beneficiary form overrides a will. More

Cash value: The savings component inside a whole life policy. Grows over time and can be borrowed against or surrendered.
Coinsurance: Your share of a covered cost after the deductible, expressed as a percentage. Original Medicare Part B is 20 percent.
Contestability period: The first two years of a life policy, during which the carrier may review the application if a claim is filed.
Contingent beneficiary: The person who receives the benefit if the primary beneficiary has died or cannot be found.
Conversion privilege: The right to convert a term policy to permanent coverage without health questions, before a deadline stated in the policy. More
Copay: A fixed dollar amount you pay for a covered service, such as $20 for an office visit.
Cost-sharing reduction: Lower deductibles and copays on a marketplace Silver plan for households under an income threshold.
Creditable coverage: Drug coverage at least as good as standard Part D. Having it lets you delay Part D without penalty.

Death benefit: The amount paid to the beneficiary when the insured dies. Also called the face amount.
Deductible: What you pay before the plan begins paying. Medicare Part A and Part B each have one; marketplace plans have an annual one.

Effective date: The day coverage begins. For life insurance, usually the date of the first premium draft.

Face amount: The death benefit stated on the policy.
Final expense insurance: A small whole life policy, typically $5,000 to $25,000, designed to cover a funeral and final bills. More
Formulary: The list of prescription drugs a Part D or health plan covers, sorted into tiers with different costs.
Free look period: A window after a life policy is delivered, usually 10 to 30 days, during which you can cancel for a full refund.

Grace period: Time after a missed premium, usually 30 or 31 days, during which the policy stays in force.
Graded benefit: A policy that pays a partial benefit for natural-cause death in the first two years and the full benefit after. For people with moderate health conditions.
Guaranteed issue: Coverage with no health questions and guaranteed acceptance within the age range, with a two-year waiting period for natural causes. More
Guaranteed renewable: The carrier must renew the policy as long as premiums are paid, though the premium can change on renewal.

HMO: A Medicare Advantage or health plan with a set network and a primary care doctor who refers you to specialists.

Initial Enrollment Period (IEP): The seven months around your 65th birthday when you first enroll in Medicare. More

Lapse: A policy ending because premiums stopped. Some policies can be reinstated within a set time with proof of health.
Level benefit: Full death benefit from day one. The best outcome on a final expense application.
Level premium: A premium that stays the same for the life of the policy or the length of the term.

Medicare Advantage (Part C): A private plan that replaces Original Medicare's claims handling, usually with drug coverage and extras, and a network. More
Medicare Supplement (Medigap): A standardized plan that pays what Original Medicare leaves behind. Works with any doctor that takes Medicare. More
Metal tiers: Bronze, Silver, Gold, and Platinum marketplace plans. Higher tiers have higher premiums and lower out-of-pocket costs.

Out-of-pocket maximum: The most you pay in a year for covered services. Every Advantage and marketplace plan has one. Original Medicare does not.

Part A: Medicare hospital insurance. Inpatient care, skilled nursing after a hospital stay, hospice.
Part B: Medicare medical insurance. Doctor visits, outpatient care, preventive services, equipment.
Part D: Medicare prescription drug coverage, sold as a standalone plan or inside an Advantage plan. More
Per stirpes: A beneficiary instruction that passes a deceased beneficiary's share down to their children, rather than to the other named beneficiaries.
PPO: A plan with a network that also allows out-of-network care at a higher cost, usually without referrals.
Pre-need: A funeral arranged and paid for in advance with a specific funeral home. More
Premium: What you pay for the policy, monthly or annually.
Premium tax credit: The marketplace subsidy, paid to the carrier each month to lower your premium and reconciled on your tax return. More

Qualifying event: A life change, such as losing coverage, moving, or a birth, that opens a special enrollment window outside open enrollment.

Rider: An add-on to a policy that changes or adds a benefit, such as accidental death or a child rider.

Simplified issue: Life insurance underwritten with health questions but no medical exam. Most final expense and many whole life plans.
Special Enrollment Period (SEP): A window to enroll or change plans outside the normal periods, triggered by a qualifying event.

Term life: Coverage for a set number of years with a level premium. Ends or becomes expensive after the term. More

Underwriting: The carrier's review of your application and health to decide whether to issue the policy and at what rate.

Waiting period: The time, usually two years, before a graded or guaranteed issue policy pays the full benefit for natural causes.
Whole life: Permanent coverage with a fixed premium and cash value. Lasts as long as premiums are paid. More

A term we missed?

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