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Life Insurance Glossary

Use our life insurance glossary to understand the terms used when reading about life insurance, such as critical illness, family income, increasing benefit and lump-sum. Although many terms are self explanatory, some life insurance terms can include subtleties that are best explained before you make any decisions.

Terms defined:


Convertible Term:

A form of term life insurance which pays out the sum insured only in the event of death or critical illness during a specified period, but may also be converted into a whole of life or savings plan at a later date if desired.

Critical Illness Only:

This kind of life insurance pays out the sum insured only on diagnosis of the insured person having contracted one of a range of specified critical illnesses. These illnesses usually include heart disease, stroke, and cancer.

Death Benefit Only:

Pays out the sum insured only in the event of death.

Death or Earlier Critical Illness:

Pays out on the earlier of death or diagnosis of a critical illness.

Family Income Benefit:

Pays out a regular annual income (actual payments can be half yearly, quarterly or monthly) in the event of death or diagnosis of a specified critical illness, during a specified period.

Increasing Benefit:

Increasing benefit is a form of protection against inflation. If you include increasing benefit option on your quotation, the benefits on the plan would increase each year in line with inflation or an agreed factor to give you this protection.

Mortgage Protection:

Pays out a reducing sum insured over a specified period in order to repay a capital & interest repayment mortgage in the event of death or critical illness.

Product Type Term:

Pays out the sum insured only in the event of death or critical illness during a specified period.

Unit Linked Policy:

This is where the premiums you pay go into an investment fund which is divided up into units. The value of your policy depends on how the price of these units moves and that, in turn, depends on the value of the underlying investments in the fund.

Waiver of Premium:

Waiver of Premium is a form of protection which provides that if you cannot follow your normal occupation because of illness or injury, the insurance company will pay your premiums to maintain the benefits under the policy.

More information:


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