Picking the right life insurance product can often be a little confusing. Have a quick look at our life insurance glossary to understand the terms found when reading about life insurance. Some are self-explanatory but others are a little trickier.
Level Cover
Level Cover or Level Term life insurance cover is the most common, and probably the simplest type of life insurance cover. Level life cover pays out a cash sum in the event of death, this amount remains constant during the life of the policy. This is normally bought to protect the lifestyle of your family and loved ones in the event of your death.
Decreasing Cover
Decreasing life cover pays out a decreasing lump sum over the life of the policy, this is because it is designed to pay off a mortgage in the event of death. It will decrease or amortise at a fixed rate.
Convertible Term
Convertible term cover is simply a type of level cover. It pays out the sum insured in the event of death or critical illness during the policy, but importantly may be converted into a savings plan or whole of life policy at a future date.
Renewable Term
Another type of level cover. This has the added flexibility which gives you the option to extend the policy for a further term after the original term.
Critical Illness Only Cover
Critical illness cover pays out the sum only on diagnosis of a pre-defined illness. These usually include cancer, heart disease and stroke. Our life insurance broker partners can include this in addition to a standard life insurance policy.
Death Benefit Only Cover
Death benefit only life cover pays out the sum insured in the event of death only.
Death or Earlier Critical Illness
Death or earlier critical illness cover will pay out on the diagnosis of a critical illness or on death, whichever is first.
Family Income Benefit
Family income benefit will pay out regular payments in the event of death or the diagnosis of a pre-defined critical illness, during the specified period of the policy.
Increasing Benefit
Increasing benefit is a type of life cover than helps protect against inflation, as the benefits of the policy will increase each year.
Mortgage Protection
Mortgage protection is also known as decreasing cover which is described above.
Unit Linked Policy
A unit linked policy is one where the premiums you have paid are invested into a fund which is divided into ‘units’. As such the value of your policy will depend on the success of the underlying investments in the fund and can therefore go down as well as up.
Whole of Life Assurance
Whole of life assurance are policies that are designed to provide cover for the holder for their entire life. Whole of life assurance will pay a guaranteed sum on the event of death of the holder of the policy. This type of insurance can be designed with profits, without profits or linked to a unit trust.
Guaranteed Premium
Guaranteed premiums will be fixed by the life insurance provider and therefore remain the same throughout the term of the policy.
Reviewable Premium
Reviewable premiums are reviewed at regular intervals by the life insurer and the premiums going forward could be adjusted either lower or higher depending on a number of variables such as their claims experience.
Waiver of Premium
Waiver of premium is a form of life cover protection that means the life insurance provider will pay the premium in the event of the policy holder being unable to work because of illness or injury
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