Insurance Basics
Deductible
The amount you pay out of pocket on a covered loss before your insurance begins to pay. Generally, a higher deductible goes with a lower premium, and the reverse.
Death Benefit
The amount paid to the people you name (your beneficiaries) when the insured person passes away.
Beneficiary
The person or entity you choose to receive the death benefit. You can name more than one and set the percentages.
Term vs. Permanent Insurance
Term coverage lasts for a set number of years and pays only if the insured person passes away during that period. Permanent coverage is designed to stay in force for the insured person’s entire life, as long as it is kept up. They are different structures built for different jobs, not better or worse versions of the same thing.
Cash Value
A savings component that is part of some permanent policies. The policy owner may be able to access it while living, subject to the policy’s terms, and fees and charges can affect it.
Living Benefits
Features on some policies that let you access part of the benefit while you’re still alive under qualifying circumstances, such as a serious illness — rather than it only paying out at death.
Rider
An optional add-on to a policy that provides an extra feature or benefit, usually for an additional cost.
Underwriting
The process an insurer uses to review an applicant’s health and risk factors to decide whether and at what cost to offer coverage.
Saving & Growth Basics
Compound Interest
Earning growth not just on your original money, but on the growth it has already earned — which is why time is such a powerful factor.
Tax-Deferred Growth
Growth you aren’t taxed on each year while it stays in the account. The tax is postponed until you take money out — it is deferred, not eliminated — and is owed under the rules in effect at that time.
Emergency Fund
Money set aside in an easily accessible account to cover unexpected costs, such as a vehicle repair, a medical bill, or a gap in income. Its job is to keep a surprise from turning into debt.
Inflation
The general rise in prices over time, which means the same amount of money buys less than it used to.
Liquidity
How quickly and easily you can turn something into cash without losing significant value. Cash is highly liquid; land is not.
Net Worth
What you own minus what you owe. Add up your assets (savings, property, equipment, accounts), subtract your debts, and what’s left is your net worth.
Equity
The portion of an asset’s value that you actually own after subtracting what is still owed against it — such as the part of a home or ranch not covered by a loan.
Retirement & Taxes
401(k) / IRA / Roth
Common retirement account types. A traditional 401(k) or IRA is typically funded with pre-tax dollars and taxed when withdrawn; a Roth is funded with after-tax dollars and designed for tax-free qualified withdrawals later.
Tax Bracket
The rate at which your next dollar of income is taxed. Income is taxed in tiers, so being “in” a bracket doesn’t mean all your income is taxed at that rate.
Capital Gains
The profit when you sell an asset — such as land, equipment, or an investment — for more than you paid for it. How and when it’s taxed depends on the asset and how long you held it.
Required Minimum Distribution (RMD)
The minimum amount the IRS requires you to start withdrawing from certain retirement accounts after a set age.
Estate & Heritage
Estate
Everything you own — property, accounts, business interests, personal belongings — considered together, especially in the context of passing it on.
Probate
The court-supervised process of validating a will and settling an estate. Depending on the estate and the state, it can be public, slow, and costly.
Will vs. Trust
A will states your wishes and goes through probate. A trust is a structure that can hold assets and pass them to heirs according to your instructions, often avoiding probate. Documents are drafted by an attorney.
Power of Attorney
A legal document that lets you name someone to make financial or legal decisions on your behalf if you are unable to. It is drafted by an attorney.
Succession Plan
A written plan for who will run a business or ranch — and how ownership will pass — when the current owner steps back or passes away.
Rather see it than read it?
We made short, plain-English videos on these ideas — no pitch, just the concept.
Watch the short explainers Read the 4 Steps guide