Life Insurance Glossary

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Life Insurance Glossary

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Terms defined:

• Convertible Term
• Critical Illness Only
• Death Benefit Only
• Death or Earlier Critical Illness
• Family Income Benefit
• Increasing Benefit
• Mortgage Protection
• Product Type Term
• Unit Linked Policy
• Waiver of Premium
• More information on life insurance related issues

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:

• More information about related insurance policies can be found on our health insurance, income protection insurance, and mortgages websites.
• If you are diabetic, and are concerned about how this may affect your life insurance policy, you may find the following sites useful:
• Diabetic Life - specialist company providing life and health insurance cover for people with diabetes.
• Diabetes.co.uk - commercial portal covering issues relating to diabetes, and products which may help reduce the symptoms.
• Our financial services glossary has definitions for a wide range of financial terms from accident insurance to Zero% APR credit cards.

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