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Your guide to reading the fine print.
Your life insurance policy lays out the details of your plan
You’ll find your term length, death benefit amount, riders, and more in your policy
You should keep your policy in a safe place for yourself and your beneficiaries to reference
Buying life insurance is an involved process, and chances are, once you’ve signed the dotted line, you know what you’re getting into. But if you have your policy in your hands and still have questions, we can help decipher what you’ve just purchased.
Your life insurance policy is a binding document, and as such it has a lot of legalese, but it’s nothing you can’t handle. Each carrier’s policies will look at little different, so if your policy isn’t in this exact order, that’s okay.
In this article:
This section goes by a few different names — it’s often also called either policy specifications or schedule of benefits —but the content is the same: this is the executive summary, with all the the important info about you and your policy, including:
Also known as general provisions, the policy terms and definitions section of your life insurance contract is devoted to decoding some of the more complicated language that you’ll encounter in your policy.
Here are some of the terms likely to be included:
Death benefit: The amount of money that will be paid out to your beneficiary or beneficiaries upon your death.
Beneficiary: A recipient of your policy’s death benefit. Your beneficiary can be one person, multiple people, or even an organization. You choose who the death benefit goes to, and what percentage of the benefit each beneficiary receives.
Coverage date / Policy date: The date that your policy is considered to be in force, or active. If you die on the effective, then your policy will pay the death benefit.
Insurance age: Your age on your birthday closest to the policy date.
Premium: Amount you pay for your policy.
Non-participating: Means that the policy doesn’t receive in any dividends issued by the insurer.
Learn more about life insurance definitions.
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Also called the insuring agreement, this section puts to use all the terms and definitions from the previous section, summarizing the promises the insurance company is making to you that you’re making to it (namely, how much you’re going to pay them, and how much they’ll pay your beneficiaries in the event of your death).
This section lists your premium amounts. For term life policies with level premiums that do not change as you age, this section will include monthly and annual premium amounts. For permanent policies, which act as investment vehicles and may have variable premiums, this section will showcase a table with the premiums over time.
This section also includes info on the grace period — the time you have after your premium due date during which your policy will remain active — and reinstatement terms, which will detail when and how you can reinstate your policy if you let it lapse. This section also usually has exclusions, for example, a suicide exclusion, which notes that the policy won’t pay a death benefit if you commit suicide within two years of the policy issue date.
This section details your rights to transfer your policy or convert it to a permanent life policy. The language in this section will let you know what your options are.
This section will list out the person, people, or organizations that you’ve chosen to receive your death benefit when you die. It will also outline payment details for your beneficiaries, including whether they can choose a lump sum payment or installments.
This section details the riders listed on the policy specifications page. Each rider will be fully detailed here, including definitions, exceptions, and guidelines. Here are some common life insurance riders that may be built into your policy or that you may have opted to include:
Learn more about life insurance riders.
Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.
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Yes, we have to include some legalese down here. Read it larger on our legal page. Policygenius Inc. (“Policygenius”) is a licensed independent insurance broker. Policygenius does not underwrite any insurance policy described on this website. The information provided on this site has been developed by Policygenius for general informational and educational purposes. We do our best efforts to ensure that this information is up-to-date and accurate. Any insurance policy premium quotes or ranges displayed are non-binding. The final insurance policy premium for any policy is determined by the underwriting insurance company following application. Savings are estimated by comparing the highest and lowest price for a shopper in a given health class. For example: for a 30-year old non-smoker male in South Carolina with excellent health and a preferred plus health class, comparing quotes for a $500,000, 20-year term life policy, the price difference between the lowest and highest quotes is 60%. For that same shopper in New York, the price difference is 40%. Rates are subject to change and are valid as of 2/17/17.
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