Beneficiary The individual(s) designated by the policy holder to receive the proceeds of the life insurance upon the death of the insured person.

Cash surrender value The cash value a policy owner would receive in the event the policy is surrendered to the insurance company providing the coverage.

Death benefit The insurance amount stated in the policy and payable to the beneficiary upon the death of the insured.

Life settlement A financial transaction in which a policy holder sells their life insurance policy to a third party – typically a financial institution – for a cash lump sum. The purchaser pays all remaining premiums and receives the life insurance benefit when the policy matures.

Life settlement broker The person acting on behalf of a policy holder, and for a fee or commission, to facilitate a life settlement transaction by obtaining one or more purchase offers for the policy.

Life settlement provider A firm specializing in purchasing life insurance policies in the life settlement marketplace on behalf of investors.

Premium A regularly scheduled payment made to the insurance company to buy a policy and to keep it in force.

Universal life insurance A type of whole life insurance that accumulates cash value through investment of the premium payments and has variable premiums, benefits and payment schedules that are tied to interest rates and the performance of the investment portfolio.

Viatical Settlement A life settlement in which the insured person is terminally or chronically ill.

Whole life insurance A type of life insurance that provides coverage for the entire life of the policy holder, who pays the same fixed premium throughout his or her life. The policy builds up cash reserves that may be paid out to the policy holder when he or she surrenders or partially surrenders the policy or uses the cash reserves to fund a loan.