Insurance Terminology
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Understand life insurance jargon with our comprehensive glossary. Clear definitions of terms you'll encounter when comparing quotes and policies.

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A

Terms beginning with "A"

Actuary

A professional who calculates insurance risks and premiums using statistics and mathematics.

Annual Premium

The total amount you pay for insurance coverage each year, usually paid monthly or annually.

Annuity

A financial product that provides regular payments over time, often used for retirement income.

Assignee

A person or entity to whom policy benefits are transferred or assigned.

B

Terms beginning with "B"

Beneficiary

The person or entity designated to receive the insurance payout when the policyholder dies.

Benefit

The amount of money the insurance company pays out to beneficiaries upon the insured's death.

Broker

An independent agent who helps you find and compare insurance policies from multiple insurers.

C

Terms beginning with "C"

Cash Value

The investment component of permanent life insurance that builds value over time.

Claim

A formal request to an insurance company for payment following the death of the insured.

Coverage

The amount of insurance protection, or the types of losses covered by an insurance policy.

Critical Illness Cover

Insurance that pays a lump sum if you're diagnosed with a serious illness covered by the policy.

D

Terms beginning with "D"

Death Benefit

The amount paid to beneficiaries when the insured person dies, also known as the sum assured.

Decreasing Term

Life insurance where the benefit amount decreases over time, often used for mortgage protection.

Deferred Premium

A premium payment that is postponed to a later date, subject to policy terms.

E

Terms beginning with "E"

Exclusions

Specific conditions or circumstances that are not covered by the insurance policy.

Endowment Policy

A life insurance policy that pays out after a set period or on the death of the insured.

F

Terms beginning with "F"

FCA

Financial Conduct Authority - the UK regulator that oversees insurance companies and intermediaries.

Family Income Benefit

Insurance that pays regular income to your family rather than a lump sum.

G

Terms beginning with "G"

Grace Period

A period after a premium due date during which the policy remains in force even if payment is late.

Group Life Insurance

Life insurance provided by an employer or organization covering multiple people under one policy.

I

Terms beginning with "I"

Income Protection

Insurance that replaces a portion of your income if you cannot work due to illness or injury.

Insured

The person whose life is covered by the insurance policy.

Insurer

The insurance company that provides coverage and pays claims.

L

Terms beginning with "L"

Level Term

Life insurance where the benefit amount stays the same throughout the policy term.

Life Assured

The person whose life is insured under the policy (same as "insured").

Lapse

When a policy ends due to non-payment of premiums.

M

Terms beginning with "M"

Medical Underwriting

The process where insurers assess your health to determine premiums and coverage.

Mortgage Protection

Decreasing term life insurance designed to pay off your mortgage if you die.

P

Terms beginning with "P"

Policy

The contract between you and the insurance company outlining coverage terms and conditions.

Policyholder

The person who owns the insurance policy and is responsible for premium payments.

Premium

The amount you pay for insurance coverage, typically monthly or annually.

R

Terms beginning with "R"

Rider

An additional benefit or feature that can be added to a basic life insurance policy.

Renewable Term

Term life insurance that can be renewed at the end of the term without medical exams.

S

Terms beginning with "S"

Sum Assured

The amount the insurance company will pay out when the insured person dies.

Surrender Value

The amount you receive if you cancel a permanent life insurance policy early.

T

Terms beginning with "T"

Term Life Insurance

Temporary life insurance that provides coverage for a specific period (term).

Terminal Illness Benefit

A feature allowing early payout of death benefits if diagnosed with a terminal illness.

U

Terms beginning with "U"

Underwriting

The process insurers use to evaluate risk and determine whether to offer coverage.

Universal Life

A type of permanent life insurance with flexible premiums and death benefits.

W

Terms beginning with "W"

Waiver of Premium

A rider that waives premium payments if you become disabled and cannot work.

Whole Life Insurance

Permanent life insurance that provides coverage for your entire life with a cash value component.

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