Life insurance jargon buster
Do you know the difference between decreasing term assurance with waiver of premium or level term assurance with critical illness cover?
Let us try and explain some of the key terms:
Accidental death cover
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.
Terms and conditions may apply.
Cover
The protection provided by your policy
Optional critical illness cover
Cover which pays out a lump sum if you’re diagnosed, and meet our definition of one of the specified critical illnesses, during 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.
Decreasing term insurance
(or decreasing term assurance)
A policy that 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.
Guaranteed critical illness premiums
Where the premiums do not change throughout the term of the policy.
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:
- you get married or enter into a registered civil partnership;
- you become a parent;
- you increase your mortgage because you are moving home or making major home improvements to your existing home;
- your salary increases as a result of a new job or promotion.
Terms 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 level term assurance)
A life insurance policy where the amount of cover, remains the same throughout the term.
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
Where the premiums for critical illness cover 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
This 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. 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
This option, which 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.
