Life insurance, in plain language
Life insurance comes with its own vocabulary, and much of it sounds more complicated than it needs to. This glossary brings together the terms that come up most often when Canadians explore life insurance, explained in plain language without the jargon.
You don't need to memorize any of this. Most people never think about these words until they're already in a conversation about coverage, and that's completely normal. The goal here is simply to give you a reference you can return to whenever something unfamiliar comes up.
Each definition is intentionally short and general. The specifics of any one product, its eligibility, its cost, and what it covers always depend on the insurer and the policy. Where a term can mean different things in different contracts, that is noted below.
If you read a definition and still feel unsure how it applies to your situation, that is a good reason to ask. Understanding the vocabulary is one thing; understanding how it fits your life is another, and that is where a real conversation tends to help most.
Use this page alongside the main life insurance guide and the resources section. And if a term you are looking for is not here yet, you are welcome to reach out and ask.
Common life insurance terms
Beneficiaries
- Beneficiary
- The person or people you name to receive the benefit from your life insurance policy when you pass away. You can usually change your beneficiaries as your life changes.
Basics
- Death Benefit
- The amount the insurer pays to your beneficiaries when you pass away, subject to the terms and conditions of the policy.
- Coverage Amount (Face Amount)
- The amount of protection a life insurance policy provides. This is typically the amount paid as the death benefit, subject to the policy's terms.
- Policy
- The written contract between you and the insurance company. It sets out the terms, conditions, coverage, and obligations of both parties.
- Insurer
- The insurance company that issues the policy and is responsible for paying any benefit under its terms.
- Group Insurance
- Insurance offered through an employer or association. It can be valuable, but it may differ from personal insurance you own in amount, portability, and terms.
Costs
- Premium
- The amount you pay to keep your insurance policy in force. Premiums may be paid monthly, annually, or on another schedule set by the policy.
Term Life
- Term Life Insurance
- Life insurance that covers you for a specified period, such as 10, 20, or 30 years. If you pass away during the term, the policy pays the benefit to your beneficiaries, subject to the policy's terms.
Permanent
- Permanent Life Insurance
- Life insurance designed to last your entire lifetime, as long as the policy's conditions (such as paying the required premiums) are satisfied. It typically costs more than term insurance.
Application & Underwriting
- Underwriting
- The process an insurer uses to decide whether to offer coverage and on what terms. It may consider age, health, medical history, lifestyle, occupation, and other factors.
- Exclusion
- A situation or condition that a policy does not cover. Exclusions vary between policies and insurers, so it is worth reading the specific contract.
- Waiting Period
- A set time that must pass before certain benefits become available. Waiting periods vary by product and policy.
Have questions? That's a perfectly good place to start.
You don't need to have it all figured out before reaching out. If you're simply trying to understand your options, I'm happy to help.
No pressure, no sales script. Just a real conversation.