Conversion: One type of life insurance contract can be exchanged for a different type assuming the contract is "convertible." For instance, term insurance can be converted to whole life or some other form of permanent insurance. Conversion occurs under a group policy when an insured individual applies for an individual policy without evidence of insurability within a stipulated period of time before the group insurance coverage terminates.

Conversion, Attained Age: The premiums for the converted policy are based on the insured's age attained at time of conversion.

Conversion, Original Age: Premiums for the converted policy are based on the insured's original age at issue. The policyowner must pay the difference in premiums, plus interest, for the time the policy has been in force.

Convertible Term Insurance: A term contract that may be converted to a permanent form of insurance without a medical examination, if conversion is made within a limited period as specified in the contract. The premium is usually based on the attained age of the insured at the time of conversion.

Credit Life Insurance: A policy issued on the life of a borrower with the creditor named as beneficiary to cover the repayment of a loan in the event the borrower dies before the loan has been repaid. Usually written using monthly decreasing term based on a relatively small, decreasing balance installment loan.

Date of Maturity: The date upon which a life insurance policy endows if the insured is still living.

Death Benefit: The amount stated in the policy as payable upon the death of the insured.

Decreasing Term Insurance: If the face value of term insurance decreases over time in scheduled increments until the policy expires, the insurance is a form of decreasing term. Typically in such policies, the premium remains level.

Deferred Annuity: A series of payments that are not begun until the lapse of a specified period of time or until the annuitant reaches a specific age.

Disability Premium Waiver Insurance: This is an important option or rider in a life insurance policy that provides that if an insured becomes totally disabled for six months or longer, no further premiums will be due and the policy will be continued in full force until death or recovery occurs.  Upon recovery, the policyowner does not have to repay premium payments made by the insurer on behalf of the policyowner during the disability period. (WARNING): This is a popular provision and it can provide a tremendous benefit if structured properly. The problem here is there are dozens of different definitions for disability. Example: Gainful employment, any occupation for compensation, your regular occupation, your occupation at time of disability, etc. As you can see, some of the wording in these definitions can make it very difficult to qualify for a benefit, hence you pay a premium for a benefit you most likely couldn't qualify for. The best definition is "your occupation" or "the material and substantial duties of your regular occupation". This definition usually applies for 2 years and a few companies have a 5 year period which would be ore preferable. After the 2 or 5 year initial period then the best I've seen would be an "occupation fitted by education training and experience". Also be aware that this benefit is totally different in Universal Life and Variable type products. Get a full explanation before you buy. The term "Waiver of Premium" has many different meanings. (BEWARE!)

Dividend: When a policy participates in the favorable investment, mortality, and expense experience of the insurer (so called "par" policies), the policyowner receives "dividends" as a refund of an "overcharge" in premiums. For tax and other purposes, these dividends are considered a return of capital rather than a profit payment. To make it simple the insurance company rewards present policyholders for good health and better mortality experience.

Dividend Additions: Participating policies provide that their dividends may be used as single premiums to purchase paid-up insurance at the insured's attained age as additions to the amount of insurance specified on the face of the contract. These additions are purchased at net rates (no commissions or other charges) to the policyowner. (See paid-up additions.)

Dividend Options: The different ways in which the insured, under a participating policy, may elect to receive dividends. The dividend options generally include receiving payments in cash, applying them to reduce premiums, purchasing additional paid-up insurance, having them held by the insurer to earn interest for the policyowner, or purchasing additional term insurance.

Double Indemnity: Usually will pay an extra benefit if death is a result of an accident. (Typically 2x's the face amount.)

Evidence of Insurablilty: A statement or proof of a person's physical condition, occupation, etc., affecting the acceptance of the applicant for insurance.

Expense Charge: In variable, universal life and other current-assumption policies, all costs are individually deducted and accounted for within the policies. These expense charges are fixed amounts or percentages deducted from gross premiums paid and cash value, as specified in the policy.

Extended Term Option: A nonforfeiture option that provides that the net cash surrender value of a policy may be used as a net single premium at the attained age of the insured to purchase term insurance at the face amount of the original policy for as long a period as possible.

Family Income Policy: A life insurance policy that combines whole life and decreasing term to provide income protection against the premature death of the family breadwinner. If the insured dies within a specified period, the family will receive a stated amount of income from date of death until the end of the period. The face amount of the policy is then paid to the family.

Family Income Rider: Similar to a family income policy except that the decreasing term coverage is written as a rider to a whole life policy rather than as combination of both coverages.

Family Policy: A policy that combines whole life and convertible term to provide insurance on each family member in units of coverage. Each unit generally consists of $5,000 of whole life on the wage earner, $1,250 of convertible term on the spouse and $1,000 of convertible term on each child.

Family Rider: An optional policy supplement attached to the insurance policy issued to the head of a family and insuring other members of the family, generally the spouse and children.

FIFO: This term refers to First In First Out and it simply means that First money in is your money and first money out is your money with no tax due. Any gain earned is still in account and won't be taxed until you receive your basis first.

Fifth Dividend Option: Because this option is usually listed after four other possibilities, it is often called the "fifth dividend" option. If selected, each year the insurer will use the prior year's dividend to purchase (at no commission or expense charge) one-year term insurance up to specified limits (usually no more than the policy's cash value) with the balance applied toward one or more of the other options. The fifth dividend option is useful to maintain level or increasing protection, to keep coverage high even if a policy loan has been taken out, or where the parties are involved in a split dollar arrangement.

Final Expenses: Costs incurred during a last illness, funeral and burial costs, debts, probate expenses, death taxes and any other taxes or obligations that must be paid in order to settle the estate of a decedent.

Fixed-Amount Settlement Option: A life insurance policy beneficiary can request that proceeds be paid in regular installments of a fixed dollar amount. The number of payment periods is determined by the policy's face amount, the amount of each payment, and the interest earned. (For contrast, see: fixed-period settlement option.)

Fixed Annuity: An annuity that provides fixed payments during the annuity period. (For contrast, see: variable annuity.)

Fixed-Period Settlement Option: A life insurance settlement option in which the number of payments is set by the payee, with the amount of each payment determined by the amount of proceeds. (For contrast, see: fixed-amount settlement option.)

Flexible Premium Annuity: An annuity which allows the owner of the contract to vary premium payments (within limits) from year to year.

Free-Look Provision: A provision in life insurance policies that gives the policyowner a stated amount of time (usually ten days) to review a new policy. It can be returned within this time for a 100 percent refund of premiums paid, but cancellation of coverage is effective from date of issue.

Grace Period: Most life insurance contracts provide that premiums may be paid at any time within a period of generally 30 or 31 days following the premium due date, during which time the policy remains in full force. If death occurs during the grace period, the insurer will pay the face amount less the amount of the earned but unpaid premium (and any outstanding loan). Generally, an insurer will not charge interest on overdue premiums if they are paid before the end of the grace period.

Graded Premium Life Insurance: To make life insurance premiums more affordable (and therefore marketable), some insurers sell a form of modified life insurance that starts with relatively low premiums which increase slowly each year. After a period of years, the premium remains level. The death benefit remains level throughout the term of coverage.

Group Life Insurance: A form of life insurance covering a group of persons generally having some common interest or activity, such as employees of the same company or members of the same union or association. Most group insurance is issued using yearly renewable term, without requiring medical examinations.

Guaranteed Cash Value: The guaranteed amount available to the insured on surrender of a policy according to a table of guaranteed values scaled to the number of years in which the policy is in force. In a universal or variable policy, there is no guaranteed cash value.

Guaranteed Cost: This is another term for nonparticipating (non par) insurance. Guaranteed cost can also be defined as the maximum costs that can be deducted from cash value under the terms of the policy in universal or variable life contracts.

Guaranteed Insurability Rider: A rider now offered on most life insurance policies that gives the policyowner the right to purchase additional insurance at specified future times without evidence of insurability. Rates are generally based on attained age at the time of purchase.

Guaranteed Interest Rate: The minimum annual rate of interest used in calculating policy reserves from year to year, or annual increases in dividend accumulations, or the interest factor in proceeds held under a settlement option, or the amount payable under the interest income option, etc. This term also refers to the minimum rate credited to cash value in interest-sensitive policies.