Life Insurance Terms You Should Know In Tennessee

Unless you’re an insurance agent yourself, industry jargon can be intimidating. If you don’t understand the terms, how can you make an informed decision on a policy? At Zander, we want you to feel secure when purchasing term life insurance. It’s one of the most important decisions you’ll make, which is why we’ve put together some key life insurance terms that you should know if you live in Tennessee.

Beneficiary

The person(s) who will receive the proceeds from the policy upon the death of the insured. There are restrictions on who can be named a beneficiary. If the chosen person is under 18 years of age, we recommend a trust be created and named as the recipient of the death benefit.

Child Rider

This may be added to a policy to pay out death benefit of up to $25,000 to the policyholder if one of their children dies while their policy is active. The amount of child rider coverage available varies by insurance company.

Death Benefit

The amount of money paid to the beneficiary when the policyholder dies.

Free Look Period

The amount of time after a policy is placed in force that the policyholder has to make changes or cancel the policy and receive a full refund of their initial premium. In Tennessee, this period lasts 10 days.

Grace Period

The amount of time that a policy remains active after a premium payment goes unpaid. In Tennessee, this period lasts 30 days.

Term

The number of years the insured is covered by their policy.

Underwriting

The process a life insurance company uses to determine if an applicant is eligible to be insured, and at what rate. The typical underwriting timeframe is 4-6 weeks.

This is not a comprehensive list of insurance terms. If you have questions about your policy, or if you are just starting the process and want to learn more, give us a call. We are here to listen, care, and serve. That’s the Zander Way.