Life Insurance Glossary

Accident, Sickness and Unemployment Insurance
This can offer you with a tax-free monthly income should you be in a position where you cannot work due to either sickness or unemployment. This will normally pay out for up to 12 or 24 months when you make a claim.

Amount of cover
This is the amount paid out if the policyholder dies during the term of the policy. This term is often known as Guaranteed Sum Assured.

This title is given to the person who will receive the payout if the person whose life is insured dies during the term of the policy.

Business Life Insurance
Commonly used to protect a business loan or mortgage and will pay out a lump sum in the event of the life insured dying. It can also be used to protect shares by company directors.

Meaning the sum assured.

Critical Illness Cover
This is used to provide protection in the event that you are diagnosed with a specified critical illness. In this case the policy will pay a lump sum.

Decreasing term insurance
This type of policy is one in which the amount you are insured for decreases over the term. It is often used to protect a repayment mortgage.

A life insurance policy that pays out a lump sum of money in the event of the person insured dying or if the policy matures. They are often described as a combination of savings and insurance in which the money will be invested in stocks and shares.

Refers to the property, money and possessions of a person.

Guaranteed critical illness cover
Premiums will not increase throughout the term.

Income Protection
This will provide you with a tax-free monthly income should you be unable to work due to sickness, an accident or injury.

Increasing Term Assurance
Will pay out a lump sum should the policy holder die. The sum assured will increase each year with that of the Retail Price Index.

Inheritance Tax
A form of tax that is paid on a person’s estate when they die or the assets are transferred.

Joint Policy
Two people are insured on the same policy and pays out on the first death. After this the policy expires.

Key Man Insurance
This term refers to an insurance policy used to cover an employee considered to be a key employee or business partner.

Level term insurance
The sum assured remains the same throughout the term of the policy.

Life insurance
This will pay out a set amount of money to named beneficiaries when the policy holder dies. It is useful to have if you have a family and/or dependents to help provide financial security.

Mortgage term insurance
This offers protection to cover a mortgage for a specific term.

A contract of insurance.

This is the amount that you pay each month for your insurance.

The process in which the estate of the deceased person is settled.

Reviewable critical illness cover
The premiums with this type of cover are reviewed to see if they will change.

Reviewable term insurance
The premiums will usually increase every year.

Used to describe the chance of the life insured making a claim. This is assessed using your current health, age, occupation, lifestyle, sex and family medical history.

The named person who will set up a Trust.

Single Policy
Where only one person is insured on a policy.

Sum assured
The amount of cover that you request to be insured for.

The length of time you are insured for.

Term insurance
Life insurance for a set term which will pay out a tax free lump sum in the event of the death of the policy holder.

A means of managing a person’s estate. If used with a will it can help ensure that your assets are passed on as you wish once you die.

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