Glossary of Terms

glossary
Life insurance:
Life insurance or life assurance is a contract between You, the policy owner and the insurer, where the insurer promises to pay a designated beneficiary a sum of money (the benefits) upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger payment.
In return, the policy holder agrees to pay a stipulated amount (the premium) at regular intervals or in lump sums.
Term Life Insurance:
A term insurance is a life insurance policy for a relatively shorter period of time. Term life insurance is only temporary and only covers a specific term, or a specific period of time in a person’s life. Benefits will go to a beneficiary only if the insured person dies during that specific period of time.
Term life insurance does not build any kind of cash value, which makes it an original type of life insurance and considered pure insurance protection.
Level Term:
Level term is the most basic type of life insurance. Normally the cheapest forms of life cover. The face amount remains level throughout the stated period. This policy is often purchased for short term debt or intermediate term debt
Decreasing Term:
This policy is most commonly associated with mortgage protection insurance. The face amount decreases over a stated period of time. It’s also known as mortgage life insurance.
Renewable Term:
This is a variant of the level term life insurance. It provides a level amount of insurance but the premium increases each year at the policy renewal date.
Whole of Life Assurance:
A whole life insurance policy is a policy that generally pays guaranteed sum in the event of the death of the insured to the dependents of the insured. In some cases, the earlier diagnosis of a critical illness also results in the said payment. . This insurance can be without-profits, with profits or unit-linked. Whole life insurance policies are sometimes called straight life insurance policies or permanent life policies.
Family Income Benefit:
Family Income Benefit pays out a regular annual income in the event of death or diagnosis of a specified critical illness, during a specified period for your dependants.
Mortgage Protection:
A lump sum policy to repay a repayment mortgage (also known as decreasing term assurance). Pays out a reducing sum insured over a specified period in order to repay a capital & interest repayment mortgage in the event of death or critical illness. Due to the reducing sum insured the cost of this policy is lower than the level term assurance.
Critical Illness:
This kind of life insurance pays out the sum insured only on diagnosis of the insured person having contracted one of a range of specified critical illnesses. These illnesses usually include heart disease, stroke, and cancer. This is not offered as a standard part of a life insurance policy. Our insurance partners can provide critical illness cover in addition to a standard life insurance policy.
Guaranteed Premiums:
Guaranteed premiums usually are fixed by the insurer and remain the same throughout the policy term. If you have chosen the indexation option, in which case the premiums will also rise linked to inflation.
Reviewable Premiums:
Reviewable premiums are usually increased by the insurer at regular intervals, usually every five years. The benefit of selecting a ‘reviewable’ plan is that usually the premium starts off at a much lower level than a guaranteed plan, particularly when critical illness has been selected as an option.

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