ordinary life insurance
Noun: A type of permanent life insurance policy where the insured person pays a fixed, level premium amount each year for their entire lifetime, and in return, the insurance company guarantees to pay a fixed, predetermined death benefit to the beneficiaries upon the insured's death. It combines lifelong coverage with a savings or cash value component that grows over time.
This term is used in the context of personal finance, estate planning, and insurance to describe a specific, traditional form of whole life insurance. - Many people choose ordinary life insurance for the stability of knowing their premium will never increase. - The key feature of ordinary life insurance is the accumulation of cash value alongside the death benefit.
- "Straight life insurance": Another common name for ordinary life insurance, emphasizing the level premium structure.
- Straight life insurance is another term for the product we call ordinary life insurance.
- In financial planning, it is often contrasted with term life insurance, which provides coverage for a specific period without a cash value component.
- Whole life insurance: A broader category of permanent insurance; ordinary life is a common type of whole life policy.
- Cash value: The savings element of an ordinary life insurance policy that can be borrowed against or withdrawn.
- Level premium: Describes the fixed annual payment characteristic of this insurance.
- Whole life insurance (in its traditional form)
- Straight life insurance
- Permanent life insurance (general category)
- Payable at death: Describes the guaranteed benefit of ordinary life insurance.
- The policy's face value is payable at death to the named beneficiary.
- Premium payment period: For ordinary life insurance, this period is the entire lifetime of the insured.
- The premium payment period for an ordinary life policy lasts until the insured's death.
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insurance on the life of the insured for a fixed amount at a definite premium that is paid each year in the same amount during the entire lifetime of the insured
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