Life Insurance Glossary
Beneficiary
The person receiving the payout if the life insured dies during the term of your policy.
Cover
Another word for the sum assured or insured.
Critical illness cover (CIC)
Pays out on diagnosis of a specified condition during the policy term, after surviving at least 14 days.
Gross earned income
Is the taxable income before any appropriate adjustments are made, for example income tax.
Guaranteed and reviewable premiums
Guaranteed rates ensure that the premium you pay will stay the same throughout the term of the policy. Reviewable rates can be reviewed by the insurer and can be increased, subject to the policy conditions.
Income Protection (IP)
Pays you a tax-free monthly income during periods when you are unable to work due to sickness, accident or injury.
Life insurance
A type of insurance that pays a set amount of money to specified beneficiaries upon the death of an insured person.
Life/Lives insured
The person or people insured under the policy.
Policy
A formal contract of insurance, that serves as its legal evidence.
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.
Premium
The amount you pay each month.
Sum assured or insured
This is the amount you decide to be covered for.
The period of time you are insured for.
Terminal illness
Defined as an advanced, fast progressing incurable illness. People diagnosed with such an illness are not expected to live more than 12 months.
Waiver of Premium
This is a form of protection where the insurance company will pay your premiums during periods where you are making a claim due to ill health.
