Life cover jargon buster.
Do you know the difference between decreasing term assurance with waiver of premium or level term assurance with critical illness cover?
In the table below we’ve listed a number of life insurance related terms and an explanation for each. We hope this will help you when reading through our web pages:
In the table below we’ve listed a number of life insurance related terms and an explanation for each. We hope this will help you when reading through our web pages:
| Accidental death benefit | Accidental death benefit is the cover provided by us for up to 90 days while your application is being processed. It will pay out a lump sum if you die following an accident that meets our definition. The lump sum that is paid is the amount you applied for, including all concurrent applications, or £300,000, whichever is lowest. Read more about accidental death benefit. |
| Cover | The protection provided by your policy. |
| Optional critical illness cover | Cover which pays out a lump sum if you’re diagnosed, and meets our definition of one of the specified critical illnesses, during the chosen period of cover. Optional critical illness cover can only be taken out as part of a life insurance or mortgage life insurance policy. When adding critical illness cover to a life insurance policy you can choose between guaranteed and reviewable premiums. Find out more about critical illness cover. |
| Decreasing term insurance (or decreasing term assurance) | Decreasing term assurance pays out a lump sum, if you die during the chosen period of cover. The level of cover reduces over the term of the policy, and is typically taken out to help protect a repayment mortgage. Find out more about decreasing term assurance. |
| Guaranteed critical illness premiums | If you choose guaranteed premiums, the premiums do not change throughout the term of the policy. |
| Guaranteed insurability option | The guaranteed insurability option allows you to increase the amount of cover during the term of your policy, without the need to provide further medical evidence. You can do this if:
Term and conditions apply. |
| Joint life | You can take out a plan, so it covers you and another person. The policy will pay out only once following a claim, and then ends. |
| Level term insurance (or mortgage level term assurance) | Level term life insurance is a policy where the amount of cover, remains the same throughout the term. Read more about level term life insurance. |
| Policy documents | The documents that we send to you once your cover has started. It includes details of the cover, premium, and the basis of cover. |
| Premium | The amount you’ll regularly pay us for providing cover. |
| Reviewable critical illness premiums | If you choose reviewable premiums, the premiums are reviewed at the fifth anniversary and every five years thereafter. The premiums you pay are reviewed, so we can make sure that we’re able to provide the level of cover selected. |
| Terminal illness cover | Terminal illness cover is provided at no extra cost on all our life insurance plans. It is also included as one of the specified illnesses under our critical illness plans. The lump sum is paid out upon diagnosis and meeting our definition of a terminal illness, rather than when you die, and then the policy ends. If you choose decreasing cover, the amount of your terminal illness cover will decrease roughly in line with your sum assured.. To include terminal illness cover, your policy must run for two or more years. This cover doesn't apply during the last 18 months of the plan. |
| Waiver of premium | Waiver of premium is available at an additional cost, pays your premiums if you’re too ill to continue working for more than 26 weeks due to incapacity caused by illness or injury. |
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Key Documents
Policy Conditions
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