Whole Life Insurance – a life insurance policy which will remain in force for as long as the insured is alive and premiums due the insurance company are paid. Whole life premiums stay level throughout the life of the insured. Whole life insurance unlike term insurance develops a cash value.

Premium – the cash amount required to pay the cost of insurance coverage for a period of time. Applies to term insurance; whole life insurance; universal life insurance; disability income insurance; and long term care insurance. Generally premiums are fixed for a specific period of the insurance policy.

Disability Income Insurance – a policy designed to pay a specific amount of money on a monthly basis after a person cannot work in their occupation for a period of time. Coverage can vary based on the premium paid; the occupation of the insured; and the benefits desired. Disability insurance benefits and availability will be effected by the occupation of the applicant. Individual disability insurance is very different than state mandated disability insurance and also may be different than group disability insurance which may be offered by an employer.

Universal Life – a life insurance policy that provides a death benefit to a beneficiary of the insured so long as the policy has a cash value. Premium payments are not required beyond a minimum period of years that is fixed by the insurance company and once the minimum has been satisfied premiums of almost any amount may be paid by the policy owner. Cash value in the insurance policy is effected by interest rates ( which vary over time ) and the amount of money which the policy owner pays into the policy.

Long Term Care – Is an insurance policy which provides cash benefits to pay for the costs associated with nursing homes; adult facility care; and home health health care. The benefits in the policy are activated when the insured cannot perform two or more activities ( ADL’s ) of daily living.

Annuity – A form of life insurance product designed to absorb a lump sum of cash and credit interest on a tax – free basis until the annuity owner starts to take a distribution – generally at retirement. Annuities are designed to pay a sum of money ( during ) the payout stage – which the annuity owner cannot outlive.

Pension Maximization – a financial planning concept in which a person who is about to retire from a pension plan requests the maximum monthly payout from the plan which leaves no additional benefits for a beneficiary. To compensate for this a life insurance policy is purchased on the retiree with the beneficiary receiving the death benefit. Generally, whole life insurance or universal life insurance is used for this purpose.