Glossary
Death Benefit
Pays out if you die or
meet the definition of a terminal
illness
Death or early
critical illness benefit
Pays out if you die,
meet the definition of a terminal
illness or suffer a critical illness or
disability listed on the plan that meets
the definition
Critical Illness
Benefit
Pays out if you suffer
a critical illness or disability listed
on the plan that meets the definition
and survive for 14 days
Disability Income
Benefit – Also known as income
protection
Replaces some of your
earnings if you can’t work or do a
number of work or life tasks because of
sickness, accident or disability, either
temporarily or permanently
Health Cash Benefit
(Term personal plans only)
Pays out if you have
to go to hospital or covers the cost for
a number of treatments
Unemployment benefit –
also known as waiver of premium
Takes care of your
premiums if you lose your job or if you
are unable to work or do a number of
work or life tasks because of sickness,
accident or disability, either
temporarily or permanently
Level benefit
The amount insured or
selected level of benefit would remain
the same throughout the term of the
contract
Increasing Benefit
The amount insured or
selected level of benefit will increase
on an annual basis in order to keep up
with any rise in the cost of living or
inflation. We use the increase in the
Retail Price Index as a measure and the
benefit will increase by this each
anniversary or by a maximum of 10%,
whichever is lower
Decreasing Benefit
The amount of cover
you require will reduce over the years.
This option will allow the cover to
reduce annually in line with your
mortgage or loan
Fixed Term
Provides over until
the end of the selected term. It does
not have any investment element and so
when it finishes it will have no value.
Renewable Term
Provides Cover for the
term you select (either 5 or 10 years)
and is suitable if you do not need a
long term commitment in your financial
planning. Your policy may be renewed at
the end of the selected period without
any further medical or financial
assessment, but the premiums or
definitions on the new plan may differ
from the original plan. There is no
investment element with this version
either. Each benefit you choose will
have its own premium. The premiums can
be calculated using guaranteed or
reviewable rates.
Guaranteed rates
This is available for
all benefits except Unemployment
benefits or Health cash benefits. This
means that the premiums for each benefit
are fixed for the whole term of the
benefit and will not change unless you
request an amendment.
Reviewable Rates
This is available for
all benefits. The premiums are reviewed
at regular intervals.
Whilst fixed or
guaranteed premiums sometimes work out
to be slightly more expensive than
reviewable premiums initially, they do
allow you to budget and plan into the
future.
Your plan has no cash
in value during or at the end of each
benefit term. If you stop paying
premiums, you won’t get anything back,
your plan will stop and you will no
longer be covered for your benefits.
Lump Sum Payment
This pays out the
amount insured in one payment
Regular Income
This allows the
benefits to be paid as a regular income
rather than a lump sum. It can be on a
level or increasing basis
Instalments
This is spreading the
payment of the amount insured over 3-5
years in equal payments
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