Glossary of Insurance Terms

Below is a glossary of some of the more common insurance terms you might see around this site and hear when talking to an insurance adviser.

If you are looking for a more detail explanation on a insurance term or if you cannot find the information you are looking for feel free to contact us on 0800 567 7450.

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  • Accident and Sickness Cover

    A short-term protection policy providing a monthly income for a period between 12 and 24 months in the event of illness.


  • Accident, Sickness and Unemployment Cover

    A short-term protection policy providing a monthly income for a period between 12 and 24 months in the event of illness or redundancy.


  • ASU

    An alternative name to 'Accident, Sickness and Unemployment Cover'.


  • Beneficiaries

    The people that you intend your Life Insurance policy payout to be paid to.


  • Business Protection

    A form of Life and/or Critical Illness Cover that provides protection for the business. For example protection for shareholders, key persons and business loans.


  • Certificate of Verification of Identity

    Identity verification procedures to reduce the risk of Money Laundering.


  • Cover Term

    An alternative name to 'Policy Term'.


  • Critical Illness Cover

    A protection policy providing a lump sum payout in the event of you being diagnosed with a critical illness listed in your policy documents.


  • DDM

    An alternative name to 'Direct Debit Mandate'.


  • Declinature of Cover

    The refusal of an insurance provider to offer insurance to an individual.


  • Decreasing Critical Illness Cover

    A protection policy where the lump sum payable reduces over the term of your policy, paying out upon diagnosis of a specified critical illness.


  • Decreasing Life Insurance

    A protection policy with a reducing sum assured over the policy term, paying out a lump sum to your family upon your death.


  • Deferment Period

    The time period that you wait for until your Income Protection or Accident, Sickness and Unemployment Cover begins your monthly benefit payments.


  • Direct Debit Mandate

    The full details of the bank account that the insurance policy is to be paid from.


  • Exclusions

    Due to occupation, medical history, foreign travel and/or pastimes you may have exclusions placed upon your policy for certain types of claims.


  • Executive Income Protection

    Income Protection for company directors that can be paid through a limited company.


  • Family Income Benefit

    A protection policy that provides a monthly income to your family in the event of your death.


  • FCA

    The Financial Conduct Authority.


  • Funeral Cover

    A policy that provides a sum of money to pay for a funeral, for example 'Whole of Life' Cover.


  • Identity Verification Certificate

    An alternative name for 'Certificate of Verification of Identity'.


  • Income Protection

    A long-term protection policy providing a monthly income when you are incapable of working, with a benefit payable period from two years through to your chosen retirement age.


  • Key Features Document

    The primary terms and conditions of your policy document, detailing the circumstances where you can and cannot make a claim.


  • Key Man Insurance

    A type of business protection that pays out to the company in the event of the death or critical illness of a 'key person'.


  • Level Critical Illness Insurance

    A protection policy that pays a lump sum to yourself upon the diagnosis of a critical illness.


  • Level Life Insurance

    A protection policy that pays a tax free lump sum to your beneficiaries upon your death, or if included to yourself upon diagnosis of a terminal illness (a prognosis of 12 months or less).


  • Level Term Assurance

    An alternative name to 'Level Life Insurance'.


  • Life Assurance

    An alternative name to 'Life Insurance'.


  • Life Insurance

    A protection policy that places Insurance of a specified sum assured, or policy benefit, upon your life in the event of your death during a set period of time.


  • Medical Disclosures

    The medical history of the insurance applicant.


  • Mortgage Term Assurance

    An alternative name to 'Decreasing Life Insurance'.


  • Non-Disclosure

    When an insurance applicant does not disclose their full medical history, family history, pastimes, smoker status, occupation, BMI. The insurance provider reserves the right to refuse to pay a claim.


  • Normal Terms

    This is when an insurance application is accepted at standard terms with a base premium for the cover.


  • Occupation Class

    Occupations fall into classes 1, 2, 3 or 4, depending upon the perceived risk of the regular working tasks with the job role. This is usually used to price Income Protection policies.


  • Over 50s Plan

    A protection policy that is not medically underwritten and provides a lump sum benefit to your loved ones on the event of your death. These often do not pay in the first 1-2 years of cover.


  • Policy Application

    The application document for an insurance policy.


  • Policy Benefit

    An alternative name to 'Sum Assured'.


  • Policy Illustration

    The provisional policy summary that outlines premium, cover type, term and level of cover.


  • Policy Schedule

    The official certificate of your insurance policy. You or your family will require the original of this at the point of claim.


  • Policy Term

    The length of time that your insurance policy is active for, assuming premiums are kept up to date.


  • Rated Terms

    An alternative name to 'Special Terms'.


  • Smoker Status

    If you have smoked within the last 12 months you are classed as a smoker. You may also be required to declare the use of nicotine replacement products used within the last 12 months.


  • Special Terms

    This is when an insurance application is accepted at rated terms. This can include health exclusions, premium increases, a maximum sum assured and/or a maximum policy term.


  • Standard Rates

    An alternative name to 'Normal Terms'.


  • Sum Assured

    The amount of money that you are insured for.


  • Term Assurance

    An alternative name to 'Life Insurance'.


  • Term Insurance

    An alternative name to 'Life Insurance'.


  • Trust

    A legal document that names Trustees to allocate the funds of your insurance policy to your intended beneficiaries.


  • Trustees

    The individuals named within a Trust who are entrusted to allocate the funds from any insurance claims to the intended Beneficiaries.


  • Underwriting

    The process where an insurance provider considers the acceptance terms that they can offer on an Insurance application.


  • Unemployment Cover

    A protection policy providing a short-term monthly benefit in the event of redundancy.


  • Whole of Life

    A protection policy that provides a lump sum payout upon your death at any age.


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