The life insurance glossary
Every term we use across LifeRate, defined in plain English — no jargon left untranslated. 40 terms so far, each with a longer explainer behind it.
A
1 termB
1 termC
4 termsCash surrender value
The cheque you'd actually receive for cancelling — usually less than the raw cash value.The net amount actually paid to you if you cancel a permanent policy — cash value minus surrender charges and any outstanding loans.
Cash value
The living benefit inside permanent insurance — useful, but not free money.The savings component inside a permanent life insurance policy that grows over time and can be borrowed against or withdrawn.
Conversion privilege (group life)
The right to convert employer group life coverage into an individual policy when you leave your job, without a medical exam — usually within 31 days, depending on the contract.
Cost of insurance
The engine charge inside your premium — and it usually climbs with age.The portion of your premium that pays for the pure protection — the death benefit — as opposed to cash value or fees.
D
1 termE
1 termF
2 termsFace amount
The number on the front page — and why the payout can end up higher or lower.The base coverage amount stated in your life insurance policy — the death benefit before any adjustments.
Free-look period
A short window after your policy is delivered — commonly 10 days, varying by province and contract — when you can cancel it for a full refund of the premiums paid.
G
3 termsGrace period
The window — usually 30 or 31 days — after a missed premium is due during which your policy stays in force and a death claim would still be paid.
Guaranteed cash value
The floor under your policy's value — the part the insurer can't take back.The minimum cash value a whole life policy is contractually promised to reach, regardless of dividends.
Guaranteed issue life insurance
Coverage with no medical questions or exam — acceptance is guaranteed within age limits, in exchange for higher premiums, smaller amounts, and often a deferred death benefit in the first two years.
I
1 termJ
1 termL
2 termsM
2 termsMinimum premium
The floor that keeps the policy alive — pay only this, and you leave yourself exposed.The lowest payment needed to keep a flexible-premium policy, such as universal life, in force.
Mortality charge
The actuarial heart of your premium — priced from risk, not opinion.The specific charge within a policy that reflects the statistical risk of a death claim, based on age, health, and other factors.
N
1 termO
1 termP
8 termsPaid-up additions
The compounding engine inside a participating policy.Small chunks of fully paid-up insurance you can buy with policy dividends, increasing both your coverage and your cash value.
Participating policy
You share in the insurer's good years — as long as you read the guarantees, not the projections.A permanent life insurance policy that shares in the insurer's favourable experience through non-guaranteed dividends.
Per stirpes
A beneficiary designation meaning a deceased beneficiary's share passes down to their own descendants. Per capita instead splits it among the surviving named beneficiaries.
Permanent life insurance
Coverage that doesn't expire — the right tool for permanent needs, the wrong one for temporary ones.Life insurance designed to cover you for your entire life, as long as premiums are paid — the category that includes whole life, universal life, and Term-100.
Policy dividend
A share of the insurer's good years — welcome, but never promised.A non-guaranteed payment that participating life insurance policies may distribute when the insurer's experience is favourable.
Policy loan
Access to your cash value without cancelling — but it isn't interest-free, and it isn't always tax-free.Borrowing against the cash value of a permanent life insurance policy while keeping the policy in force.
Post-claim underwriting
When an insurer only fully reviews your health history after a claim is filed — common with lender mortgage insurance, and a frequent reason those claims are denied.
Premium
What you pay, why it's priced the way it is, and what changes it.The amount you pay — monthly or annually — to keep your life insurance policy in force.
R
1 termS
4 termsSimplified issue
Faster and easier to get — at the cost of price and coverage size.Life insurance you can qualify for by answering a short list of health questions, with no medical exam.
Single premium
Pay once, done — but the tax rules deserve a close look.A policy you fund with one lump-sum payment up front instead of ongoing premiums.
Surrender value
What cancelling actually gets you — often less than you'd expect in the early years.The amount you receive if you cancel a permanent life insurance policy — the cash value less any surrender charges and outstanding loans.
Survival period
The number of days — typically 30 — you must survive after a covered diagnosis before a critical illness benefit is paid.
T
2 termsTemporary insurance agreement (TIA)
Limited interim life coverage that starts when you apply and pay your first premium, protecting you while underwriting is completed. Limits and exclusions vary by carrier.
Term-100 (T100)
Permanent coverage stripped down to the guarantee — no savings frills.Permanent life insurance with level premiums payable to age 100, offering lifelong coverage but typically little or no cash value.
U
2 termsUnderwriting
The step that decides your rate — and why honesty on the application protects your family.The process insurers use to assess your risk and decide whether — and at what price — to insure you.
Universal life insurance
Permanent coverage with more levers to pull — and more responsibility to manage them.Permanent life insurance that separates the insurance cost from an investment account, giving you flexibility over premiums and how the cash value is invested.
W
2 termsWaiver of premium
Insurance for your insurance — it keeps coverage alive when you can't pay for it.A rider that pays your life insurance premiums for you if you become totally disabled and can't work.
Whole life insurance
Coverage that never expires — and the trade-offs that come with paying for that guarantee.Permanent life insurance that covers you for your entire life and builds a guaranteed cash value alongside the death benefit.