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How to read your life insurance policy

Oct 9, 2020 3 Minute Read

Term life or permanent life? Riders or no? There are many ways to customize your life insurance coverage to protect your family when they need it. That’s why it’s important to learn how to decipher your policy, so you can feel confident that you’re covered.

Daunted by that thick stack of paperwork? Don’t be – here’s how to read a life insurance policy.

Understanding your life insurance policy

Once you sign your policy, you’ll either get a physical or electronic copy of the policy terms. In general, each policy should include a:

Cover page

In most cases, the first page (or two) is a high-level summary of the most important information about your policy. This statement should include the name of your insurance company, the type of plan you’ve bought, the name of the policy owner, and other personal details.

Most insurance companies have a “free look” or trial period that allows you to cancel the policy without penalty for a short time, usually 10 to 30 days, which should be summarized on your cover page as well. 

Schedule of benefits

Next come your life insurance policy details, also known as the schedule of benefits or declaration page. 

This should be a high-level snapshot of all policy specifications, such as:

  • Policy owner 
  • Policy insured
  • Beneficiary or beneficiaries
  • Policy type, such as term or permanent
  • Term length
  • Reference number
  • Policy date
  • Death benefit amount 
  • Rate class (Preferred Plus, Preferred, Standard Plus, Standard) and risk class
  • Attached policy riders 
  • Premium amounts and payments

This section provides an overall look at benefits. Details, conditions, and contract terms are detailed a bit later (see Coverage details).

Policy terms and definitions

If you’re a bit confused by all the insurance-speak, don’t worry. This section will generally offer definitions for the most common terms you’ll see pop up in your policy, such as: 

Death benefit: The amount your policy will pay out in event of your death

Policy date: The issue date or day that the policy becomes active

Premiums: The amount you pay, either monthly or annually, to keep the policy active

Policy owner: The person who applied for the policy and pays the premiums

Insured: The person the policy was bought for and covers  

Beneficiary/Beneficiaries: The person, people, or organization named by the insured to receive the payout after their death

Need more help decoding insurance terms? Check out our glossary

Coverage details

Life insurance is a contract between you and your insurer, and this section spells exactly what that contract covers using the terms and definitions above.

This section typically contains:

  • A summary of the policy’s owner, insured, and beneficiaries
  • Future payment schedule for premiums, which is especially important if they change over time
  • Your grace period, or how long you can go after missing a payment before coverage lapses
  • Information on reinstating coverage and making a claim 
  • Exclusions to receiving a payout 

Finally, the coverage details section may also include information about any additional riders that have been added to your coverage, if relevant. 

Still don’t understand how to read your life insurance policy? 

We’re here to help. Get in touch today so one of our agents can walk you through it.


At eFinancial, our goal is to make life insurance simple, affordable, and understandable for everyday families. This content is intended for educational purposes only. Each post is carefully fact-checked, reviewed and updated regularly to ensure the information is as relevant as possible.