Insurance Glossary Of Terms
Keywords: insurance, home insurance, life insurance, house insurance, insurance quote
Assured - Those insured under the terms of an insurance policy.
Benefit - The money paid to the policyholder when a claim is made.
Bid Price - The selling price or cash-in value of your unit holdings.
Bonus - Relates to a with-profits policy. The amount of money added to the benefit payable under the policy. The amount is dependent upon the profits made by the insurance company. Added bonuses cannot be taken away.
Convertible Term Assurance - A term insurance policy which gives you the option to convert your current policy to a whole-life or endowment insurance policy, without having to take further medical examinations.
Critical Illness Insurance - A policy that pays out a lump sum on the diagnosis of life threatening illnesses indicated in the terms of the plan.
Decreasing Term - A form of term life insurance where the death benefit decreases each year as per your policy. Premiums remain level. This type of certificate is frequently sold as mortgage insurance. There is no surrender value for this policy.
Endowment Insurance - An insurance policy that pays a stated amount at the end of a specified period or upon the death of the insured if it occurs within that period.
Family Income Benefit - Term assurance which pays money to the life assured’s dependants for a set period, rather than paying a lump sum.
Guaranteed Bond - A bond in which principal and interest are guaranteed by an entity other than the issuer. Guaranteed Bonds can be income or growth.
Increasing Term - The cover and the amount you pay into the policy are increased by a specific percentage each year calculated on the original sum insured. Designed as a way to increase your life cover as your earnings increase.
Investment Bond - Combines investment with some life cover. The payments you make into an insurance policy or investment bond, usually a lump sum, are invested in the insurance company’s with-profits or unit-linked funds (Life Funds). Different types of bonds include the guaranteed bond and unit-linked single premium bond. Not to be confused with a company or government bond, an investment that offers a fixed rate of interest and an area where your chosen Life Funds may be invested.
Life Fund - This usually refers to Unit linked Investment Funds. These are funds run by Life Assurance or Pension Companies. Such funds are used for individuals holding life assurance policies to invest in. The assets held within the fund are divided into a number of units. When an investor contributes to a Life Fund, units are allocated to investors in proportion to their investment.
Maturity - An agreed date when an endowment policy ends and the proceeds, including any bonuses, are payable.
Mutual - A life insurance company that is owned by its with-profits policyholders.
Offer Price - The price at which fund units are bought.
Premium - The amount of money paid into an insurance policy.
Proprietary - A life insurance company that issues its profits to its shareholders.
Qualifying Policy - A life assurance based savings plan that has to be written for a minimum of 10 years and must fulfil certain qualifying policy criteria to ensure the final payout is tax free.
Renewable Term - Term Insurance that may be renewed for another term without evidence of insurability.
Single Premium Policy - Where a single lump sum is paid for an insurance policy.
Sum Insured - The amount of money that is guaranteed to be paid under an insurance policy, before any bonuses are added.
Surrender Value - Not applicable to all life insurance policies. The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage
Term Insurance - Provides policyholder with protection only. Life insurance payable to a beneficiary only when an insured dies within a specified number of years (the term). If you live beyond the term you do not receive any payment. This is thought to be the cheapest type of insurance.
Terminal Bonus - This is an extra bonus determined when a death or maturity claim is paid. Terminal bonus is often only paid if the policy has been in-force for a minimum number of years at claim time. The amount is dependent upon the profits made by the insurance company.
Unitised With Profits Fund - Also known as a Unit-Linked With Profits Fund. A type of Life Fund that can invest in UK and overseas shares, property, fixed interest securities and cash. When you invest in this fund through an insurance policy, you buy ‘units’. When an annual bonus is declared, you can either receive more units or it is added to the unit price on a daily basis. Due to the addition of bonuses the unit price does not reflect the value of the underlying investments.
Unit-Linked - Also called Unitised. If your insurance policy is unit-linked, some of your money is used to purchase ‘units’ in a fund. The value of your policy at maturity is dependent upon the growth of the fund in which the policy is invested. Generally refers to policies that offer protection and saving such as endowment insurance, whole life insurance and investment bonds.
Unit-Linked Single Premium Bond - A single lump sum life insurance policy where your investment is spread over a number of Life Funds.
Whole Life Insurance - Whole life insurance provides a death benefit for the policyholder as it builds up cash value. The policy remains in force for the lifetime of the insured, as long as premiums are paid according to the policy agreement. You can choose insurance that pays out on death a guaranteed sum only, the sum plus any bonuses that have been added, or the sum plus any additional value from the growth of the funds invested in.
Without Profits - When a policy reaches maturity or the policyholder dies, the amount paid out is the basic guaranteed sum only. You would not be entitled to any bonuses.
With Profits - Relates to insurance policies that combine investment with protection. This type of policy is entitled to a share of the profits made by the insurance company. Premiums are invested in the with profit fund, reversionary bonuses are applied usually on an annual basis which reflect the investment growth of the fund assets. On death and/or maturity a further terminal bonus might be applied to the fund value.
With Profits Bond - An insurance policy where your lump sum is in most cases invested in a Unitised With Profits Fund (which is listed under the Life Funds section).
First Hand Insurance are Life Insurance (www.firsthandinsurance.com and House Insurance (www.firsthandinsurance.com specialists in the UK.
This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.
Previous Articles Highlighter:
Are You Marketing By Example? (1)
Then you need to ask the questions: What makes this business so successful? Why is that business struggling to keep the doors open? Do a little sleuthing and find out why a business is going under.
Finding A Non Profit Debt Consolidation Companies (2)
What should these companies offer to their potential clients? That should be the question that you should consider. There are non profit debt consolidation companies that offer variety of services that you can avail when we talk on how to control your finances.
Why Those Don Quixote Start-Ups Are Great For Your Career, Creativity And Sanity (3)
But why even try something that has a high probability of failure? For the experience, stupid, might be Don Quixote's reply in one of his more lucid moments. Start ups sometimes are often made of up a handful of employees comprising the 'team'.
How To Understand Planning Permission (4)
Not only can this be expensive and time consuming, but just because you were successful with gaining planning permission the first time, it doesn't necessarily mean you will be successful on your second application.
How To Find The Right Tax Consultant (5)
Keywords: tax consultants london When it comes to tax consultants London it can be hard to know which one to choose because there are so many to choose from. There are certain things you can look out for and ask for though that will help you to get the most out of the person you have hired.
Debt Consolidation Quote: The First Step To Conquering Debt (6)
Many of these paper trails are from different bills that need to be paid. Each bill comes at a different time with a different due date. While keeping track of a few might be manageable, when you have ten or more bills, it can become a struggle.
Debt Relief : Finding A Way That Works For You (7)
This has proven to be a steady form of debt relief for a lot of people. Only Fools Rush In People in debt are often in a hurry to get rid of their debt as quickly as possible.
Have You Burned Any Travelogs? (8)
In LA he thinks I should watch out for two-legged sharks. My husband and I share the driving when we travel by car, but I prefer seeing America by ship.
Knowing Non Profit Debt Consolidation Services (9)
There are just a number of non nonprofit debt-consolidation companies that are offering these extended services, and these could be, somehow, valuable to you. Their program allows you to understand what are the reasons of your financial instability and how you can get out of it.
For Physical Fitness, Online Training Workouts Work Like Crazy (10)
There are two different kind of online personal training websites. The first one, film their own exercise videos which enables them to customize exercises for their client's personal need.
Newer Articles Highlighter:
Create An Action Plan To Deal With Your Poor Credit Score (1)
The problems that influence your credit problems should dictate how you decide to start to repair your credit score. As you read this article, make a note of those tips that apply to you and from there develop a checklist of things you can do to improve your credit situation.
A Credit Card Glossary Of Terms (2)
You will see many offers with "LOW 4.9% APR" in the headline followed by "for first six months, 21.9% thereafter" in the small print. Teaser offers can sometimes be worth taking, but not if they tie you in for longer than the period of the offer.
Understanding UK Life Insurance Cover (3)
But you might instead want UK life insurance cover that pays off your mortgage. If so, you have a choice and it depends on the type of mortgage you have.
Are You Considering Bankruptcy? Wait! (4)
You may believe you can't afford one, but many are willing to work for free for those who really need a lawyer but are unable to pay. Get more General Finance advice and help including - Debt, Credit Cards, Mortgages, Investing, Real Estate, etc.
Securing Commercial Finance (5)
Let's look at each of the things that can be used and how they work. Property This can be in the form of residential property owned by the principles involved in the business.
Whole Life Vs. Cheap Life Insurance (6)
And while it may not be the cheapest form of life insurance, it does seem to meet the needs of those who purchase it. You will be hard pushed to find such Cheap Life Insurance in the UK from any other company than www.life-insurance-online.co.uk.
Is A Debt Consolidation Loan For You? (7)
Don't fall in to this trap! Consolidating your debt and then accumulating more is an very bad idea. Your Home Is At Risk Of course, this is the biggest risk when you take on any major loan.
How To Check Your Credit Rating And How It Affects You (8)
How Your Credit Rating is Worked Out. 'FICO', named after the Fair Isaac Corporation, who invented it, is the most common method of coming up with your rating. Your present credit status is prioritised thus: 1: Whether you've paid previous debts 2: How much debt you now have 3: Your credit history 4: What types of debt you use 5: How many times your credit rating has been checked of late Things that happened in recent times are given more weight than things that happened a while ago.
Why Use Bridging Finance? (9)
A Short Term Solution Bridging Finance can bridge a financial gap. But it should never really be considered a permanent solution. A more permanent solution in the form of a regular mortgage should be considered if the property is to be held on to long-term.
Cashing In On Your Spare-Time Interests (10)
The best thing about profiting from your hobbies is that you're doing something that relaxes you and gives you joy in life. Not many people can say that about their jobs.