Alternate, contingent beneficiary: a person who you name to receive the death benefit if your named beneficiary dies before you, or at the same time as you
Beneficiary: the person, persons or organizations you name to receive the payout (death benefit) when you die. If no one is named, the payment goes to your estate
Life insurance agents: life insurance agents are licensed and regulated to sell life insurance by FSCO. Some agents represent one insurance company while others represent several companies
Life insurance company: a life insurance company is licensed and regulated by FSCO to issue and sell comprehensive financial products including individual and group insurance policies to individuals and to employers, and promises to pay benefits to holders of those policies
Capital gains tax: tax which is applied to the value of your assets (other than a principal residence) when you die
Cash value: the amount of money that builds up in a permanent life insurance policy. You can use the cash value to boost your death benefit, pay your premiums, supplement your retirement income, or take out a policy loan
Death benefit: the amount of money that the insurance company agrees to pay to your beneficiaries when you die
Declaration: a page in your policy which lists basic information such as your name, address, policy dates, company contact information and key details of the policy
Dividends: a portion of the insurance company’s profits which are paid back to your policy on a regular basis. You may be able to use dividends to purchase additional insurance (paid-up additions), or reduce your premiums. Dividends are not guaranteed and are only available under participating insurance policies
Estate administration tax (formerly known as probate fees): a tax applied to your estate to cover administration fees such as checking your will and paying creditors
Estate: the sum of all your property, possessions, financial assets and debts
Exclusions: risks that your insurance company will not insure
Group life insurance: life insurance that is offered through an employer or professional association
Individual life insurance: life insurance that you purchase independently of any group insurance
Irrevocable beneficiary: a named beneficiary that you, as policyholder, cannot change without the beneficiary’s consent
Living benefits: the ability to receive a partial pre-payment of the death benefit if you have a terminal illness
Permanent life insurance: typically used to cover needs that have no forseeable end such as funeral expenses or supplemental income for your survivors
Policy illustration: a written proposal showing how a life insurance policy may perform based on different interest rates
Policy loan: a loan that you can borrow against the cash value of your life insurance policy
Premium: a yearly or monthly fee that you pay for an insurance policy
Rescission right: your right to cancel a life insurance policy within ten days of receiving your policy
Revocable beneficiary: a named beneficiary that you can change
Rider: additional provisions that you can purchase to give extra coverage for individual needs
Term life insurance: suitable for more temporary needs or expenses that have a foreseeable end like your mortgage or putting your children through university