• Face value: The amount of money the policy is worth, or the death benefit 
   
• Cash value: The portion of the policy that earns interest and can be borrowed against or withdrawn 
   
• Premium: The amount paid to the insurance company for the policy, usually each month 
   
• Cost basis: The total amount of all premiums paid 
   
• Gains: The amount of money left over after subtracting the cost basis from the cash value 
   
• Waiver of premium: A clause that waives premium payments if the policyholder becomes seriously injured, critically ill, or physically impaired 
   

   

  Other terms related to insurance

 

• Simplified issue: A type of policy that's easy to get approved for and often doesn't require a medical exam 

• Modified policy: A type of policy that may be good for someone who is in good health 
   
• Immediate final expense policy: A type of policy that's good for someone who is not in good health because beneficiaries can receive benefits without a waiting period 
   
• Guaranteed issue policy: A type of policy that's good for someone whose health may be declining