Life insurance glossary

The following are definitions of commonly used life insurance terms:

Assignment
The owner of a policy may assign the right to name the policy's beneficiary to a third party. A collateral assignment names a lender as the policy beneficiary to secure a business loan for the insured. Humana does allow assignment.

Beneficiary
A beneficiary is the person named by the owner of an insurance policy to receive any benefits provided by the plan if the participant dies.

Contingent beneficiary
A contingent beneficiary is an alternate beneficiary – one whose rights under a contract are dependent upon the death of the primary beneficiary.

Insured
The insured is the person on whose life an insurance policy is issued.

Owner
The owner is the person who owns the policy, as shown in the insurance company's records.

Rider
A document that amends the policy or certificate is called a rider. It may increase or decrease benefits, waive the condition of coverage, or in any other way amend the original contract.

Term life insurance
Term life insurance provides income for a beneficiary if an insured dies during the insured period. Term life insurance gives an insured financial protection for a set period of time. The period (or term) set for the policy can be one year, five years, or more. If an insured dies during that period, the face, or dollar, amount of the policy is paid to the beneficiary.