Glossary of Terms
Beneficiary
The person receiving the sum assured if the life insured dies during the term of your policy.
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Cover
Another word for the sum assured or cash amount payable.
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Critical Illness Cover (CIC)
Life Insurance provides lump sum protection in the event of death. Critical illness policies provide lump sum protection against diagnosis of one of a range of defined, survivable illnesses, e.g.: a heart attack. The policy may be on a single or joint life basis.
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Decreasing Term Insurance - Mortgage Protection
Decreasing term also known mortgage protection pays out a cash sum if you die during the term of the policy and is designed to be used alongside a repayment mortgage. The sum assured decreases broadly in line with your mortgage to pay off the outstanding balance and is therefore cheaper than level term.
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Gross Earned Income
Is the taxable income before any appropriate adjustments are made, for example income tax.
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Guaranteed Premiums
This means the premiums are guaranteed to remain the same for the duration of the plan, unless you increase the amount of cover via an indexation option.
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Income Protection (IP)
Income Protection, or Permanent Health Insurance (PHI) as it used to be called, provides you with a monthly tax free payment to replace your income if you are unable to work due to sickness or accident and with some policies redundancy. There is no payment if you die, or cash sum if you are diagnosed with a critical illness.
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Indexation
The indexation option allows you to increase your benefits annually in line with inflation or at a fixed percentage, with a corresponding increase in the premium.
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Life/Lives Insured
The person or people insured under the policy.
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Level Term Insurance – Family Protection
Level term insurance or family protection pays out a guaranteed cash sum if you die during the term of the policy. You can take out a plan on your own or as a joint policy with your partner. For joint life policies the cash sum is payable only once on the first death.
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Policy
A formal contract of insurance, that serves as its legal evidence.
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Policy Owner
The owner of the policy. This is normally the life insured, but could also be your employer for example, if you have a policy through them.
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Premium
The amount you pay each month.
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Reviewable Premiums
Policies with reviewable premiums are usually cheaper initially, however, the premiums are reviewed regularly and can increase substantially.
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Sum Assured or Insured
This is the amount you decide to be covered for.
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Term
The duration of the policy.
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Terminal Illness
This benefit is usually a standard feature and this means the cash sum will be paid early if you are diagnosed with a terminal illness.
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Trusts
Writing your policy under trust ensures that the proceeds are payable, tax free & without delay to the beneficiaries of your choice. Full details are available via the Trusts page, with links to insurer sites to enable you to find the most suitable type of trust for your circumstances together with trust forms which can be downloaded. More complicated arrangements may require qualified legal advice.
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Waiver of Premium
Waiver of premium option will pay your premium if you are unable to work through sickness or accident and ensures your cover continues until you are back at work.
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