Shopping for life insurance can be confusing and sometimes described in terms that we just don’t understand. To help you with your journey, here are answers to questions people often ask and an explanation about what certain terms mean.

 

What is a death benefit?

The money the beneficiaries of the policy receive when the insured dies

 

What is cash value?

Part of the premium payments that grow tax-deferred over time. If your policy earns dividends these funds can also be added to the cash value and earn interest. If you need to access your cash value funds you can either take a loan or withdraw a portion.

 

How do riders work?

Riders are used to customize your policy and add additional value, and provide ways to get more death benefit or future access to the death benefit if you become terminally ill.

 

What is a dividend?

This is how an insurance company shares part of the profit with you. Dividends are not guaranteed and most often they are paid annually.