Insurance Glossary Of Terms

Assured – Those insured under the terms of an insurance plan.

Benefit – The money paid to the policyholder if a claim is created.

Bid Price – The selling price or cash-in worth of your unit holdings.

Bonus – Relates to a with-profits policy. The sum of money added to the benefit payable under the coverage. The amount depends upon the gains made by the insurance company. Added bonuses can’t be removed.

Convertible Term Assurance – A term insurance policy that provides you the choice to convert your existing policy to some whole-life or endowment insurance policy, without needing to take further medical examinations.

Critical Illness Insurance – A policy that pays out a lump sum on the diagnosis of life threatening illnesses indicated in the terms of the strategy.

Reduced Term – A form of general insurance terminology in which the death benefit decreases each year depending on your policy. Premiums remain level. This kind of certificate is often marketed as mortgage insurance. There’s not any surrender value for this particular coverage.

Endowment Insurance – An insurance policy that pays a specified sum at the end of a specified period or on the death of the insured when it occurs within that interval.

Family Income Benefit – Term assurance that pays money to the life guaranteed’s dependants for a specified period, as opposed to paying a lump sum.

Guaranteed Bond – A bond in which principal and interest are guaranteed by an entity apart from the issuer. Guaranteed Bonds can be income or growth.

Increasing Term – The pay and the amount you pay into the policy are increased by a particular percentage each year calculated on the original sum insured. Designed as a means to increase your life cover as your earnings increase.

Investment Bond – Combines investment with some life cover. The payments you make to an insurance policy or investment bond, usually a lump sum, are invested in the insurance company’s with-profits or unit-linked funds (Life Funds). Various kinds of bonds include the guaranteed bond and unit-linked single premium bond. Not to be confused with a company or government bond, an investment that offers a fixed interest rate and an area where your chosen Life Funds may be spent.