Plain English definitions
Insurance jargon explained simply — from deferral periods to own occupation definitions. Everything you need to understand protection cover.
54 terms
An option on some combined life and critical illness policies where a critical illness payout reduces the remaining life insurance sum rather than ending the entire policy.
Why it matters
Understanding whether your policy uses accelerated or additional critical illness benefits affects how much life cover remains after a claim.
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Critical illness cover that pays out in addition to life insurance, so a critical illness claim does not reduce the life cover amount.
Why it matters
Additional benefit structures provide more comprehensive protection but cost more than accelerated benefit policies.
An income protection definition that only pays out if you cannot work in any job suited to your skills, experience and education.
Why it matters
Any occupation definitions are harder to claim against than own occupation cover, especially for skilled professionals.
The person or people you nominate to receive a life insurance payout when you die.
Why it matters
Choosing the right beneficiaries ensures the payout reaches the people who need it most, quickly and with minimal complications.
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Insurance covering the structure of your home against damage from events such as fire, flood and subsidence.
Why it matters
Buildings insurance is usually compulsory with a mortgage and protects your largest asset from catastrophic damage.
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An optional add-on paying a lump sum if your child is diagnosed with a specified serious illness.
Why it matters
Provides funds for treatment, travel or time off work if a child becomes seriously ill.
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The specific wording in a policy that determines whether a health condition or inability to work qualifies for a payout.
Why it matters
Two policies covering the same condition may define qualifying diagnoses differently — definitions determine whether claims succeed.
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A single protection policy that includes both life insurance and critical illness cover, paying out once on either event.
Why it matters
Combined policies can be cost-effective but mean you only receive one payout across both death and critical illness.
Cover for your belongings inside the home, including furniture, electronics and personal possessions.
Why it matters
Replacing household contents after theft, fire or flood can cost tens of thousands of pounds without insurance.
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A term life policy that allows you to convert to whole of life or another permanent cover without further medical evidence.
Why it matters
Useful if your health deteriorates during the term and you want to maintain cover without reapplying.
Insurance that pays a tax-free lump sum if you are diagnosed with a specified serious illness and survive the qualifying period.
Why it matters
Surviving a serious illness can create financial pressure while you are still alive — critical illness cover addresses that gap.
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An employer benefit that pays a lump sum to your beneficiaries if you die while employed by the company.
Why it matters
Death in service is valuable but usually limited and stops when you leave the employer — personal cover fills the gap.
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Life insurance where the payout reduces over time, typically in line with a repayment mortgage balance.
Why it matters
Decreasing term keeps mortgage protection affordable because the insurer's risk falls as your debt reduces.
The waiting time between becoming unable to work and income protection payments beginning, also called the waiting period.
Why it matters
Choosing the right deferral period balances premium cost against how long you can manage without income.
Salary or benefits your employer continues paying if you are off work due to illness, beyond statutory minimums.
Why it matters
Knowing your employer sick pay duration helps you choose the right income protection deferral period.
Critical illness policies with broader condition definitions, more covered illnesses and higher partial payment amounts.
Why it matters
Enhanced policies typically offer better claim prospects but cost more — worth comparing for comprehensive cover.
A specific condition, activity or circumstance listed in your policy that is not covered.
Why it matters
Understanding exclusions before you buy prevents surprises at claim time, especially for pre-existing conditions.
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The person responsible for administering your estate after death, including distributing assets and paying debts.
Why it matters
Life insurance written in trust bypasses the estate and probate, reaching beneficiaries faster than going through an executor.
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The UK regulator that oversees financial services firms, ensuring advisers meet standards of conduct and suitability.
Why it matters
Using an FCA-regulated adviser gives you consumer protections, including access to the Financial Ombudsman Service.
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An independent body that resolves disputes between consumers and financial firms free of charge.
Why it matters
Provides a safety net if you disagree with how an insurer or adviser handled your complaint.
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Protection insurance arranged by an employer or association covering multiple members under one master policy.
Why it matters
Group cover is a useful benefit but often limited and not portable when you change jobs.
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A policy feature allowing you to increase cover without further medical underwriting after specified life events.
Why it matters
Lets you increase protection after marriage, having children or taking a larger mortgage without health reassessment.
Premiums that stay fixed throughout the policy term, regardless of claims or age increases within the term.
Why it matters
Guaranteed premiums provide budgeting certainty — you know exactly what you will pay each month.
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Insurance covering your property and belongings, typically combining buildings and contents cover.
Why it matters
Protects your home and possessions against damage, theft and liability claims.
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Insurance that pays a regular monthly income if illness or injury prevents you from working.
Why it matters
Replaces lost earnings for months or years — the most common financial risk for working households.
An option to increase your cover amount each year in line with inflation, with premiums rising accordingly.
Why it matters
Prevents your cover from becoming inadequate as living costs rise over a long policy term.
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A mortgage where you pay only interest each month and repay the capital at the end of the term.
Why it matters
The mortgage balance stays constant, so level term life insurance is usually more appropriate than decreasing term.
A single policy covering two people that pays out once — usually on the first death or first critical illness.
Why it matters
Can be cheaper than two separate policies but leaves the surviving partner without cover after a claim.
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Life insurance that pays a fixed lump sum if you die at any point during the policy term.
Why it matters
Ideal for covering living costs, dependants and debts beyond a reducing mortgage balance.
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Insurance that pays a lump sum to your beneficiaries if you die during the policy term.
Why it matters
Protects dependants from financial hardship and helps them stay in the family home after bereavement.
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An additional premium charge applied by insurers due to health conditions, occupation or other risk factors.
Why it matters
A loading does not mean cover is unavailable — it reflects higher risk and still provides valuable protection.
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Life insurance designed to cover your mortgage if you die, typically using decreasing term cover.
Why it matters
Ensures your family can stay in the home by clearing or covering mortgage repayments after your death.
An income protection definition that pays out if you cannot perform your specific job due to illness or injury.
Why it matters
Own occupation cover is easier to claim against and essential for skilled professionals and specialists.
A reduced critical illness payout for less severe diagnoses that do not meet the full condition definition.
Why it matters
Partial payments provide some financial support for early-stage conditions that might not qualify for a full payout.
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The original name for income protection insurance, emphasising long-term cover until return to work or retirement.
Why it matters
PHI and income protection refer to the same product — monthly income when you cannot work due to health.
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A health condition you had before applying for insurance, which insurers may exclude or load.
Why it matters
Disclosing pre-existing conditions honestly ensures your policy is valid and claims are not rejected later.
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The regular payment you make to keep your insurance policy active, usually monthly or annually.
Why it matters
Understanding what affects your premium helps you structure cover affordably without sacrificing essential protection.
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Insurance that pays for private healthcare treatment, avoiding NHS waiting times for eligible conditions.
Why it matters
PMI provides faster access to diagnosis and treatment, reducing time off work during illness.
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The legal process of administering a deceased person's estate, including validating the will and distributing assets.
Why it matters
Life insurance in trust avoids probate delays, getting funds to beneficiaries quickly when they need them most.
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A term policy that can be renewed at the end of each term without medical evidence, at the insurer's then-current rates.
Why it matters
Provides continued cover if your health deteriorates, though renewal premiums increase with age.
A mortgage where each monthly payment reduces the capital balance until the loan is fully repaid.
Why it matters
The reducing balance suits decreasing term life insurance, keeping mortgage protection premiums lower.
Premiums that the insurer can increase during the policy term, usually at five-year intervals.
Why it matters
Reviewable premiums may start lower but can rise significantly — guaranteed premiums offer more certainty.
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A policy covering one person independently, with their own sum assured and premium.
Why it matters
Separate policies give each partner independent cover that is not affected by the other's claim.
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The minimum sick pay employers must provide — currently £116.75 per week for up to 28 weeks.
Why it matters
SSP alone is rarely enough to cover a mortgage and bills, making income protection essential for most workers.
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The total amount your insurance policy will pay out on a successful claim.
Why it matters
Choosing the right sum assured ensures your cover matches your financial obligations and dependants' needs.
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The number of days you must survive after a critical illness diagnosis before the policy pays out, typically fourteen days.
Why it matters
If death occurs before the survival period ends, critical illness does not pay — life insurance would instead.
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A one-off payment from life or critical illness insurance that is not subject to income tax.
Why it matters
The full payout reaches you or your beneficiaries without tax deductions, maximising financial support.
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Life insurance covering a fixed period — if you die within the term, it pays out; if not, the policy ends with no payout.
Why it matters
Term assurance is the most affordable way to protect your family during years of greatest financial responsibility.
A feature on life insurance that pays the death benefit early if you are diagnosed with a terminal illness.
Why it matters
Provides funds during terminal illness for care, family support or fulfilling final wishes before death.
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A legal arrangement placing your life insurance payout outside your estate, paid directly to beneficiaries.
Why it matters
Trusts speed up payouts, avoid inheritance tax on the sum assured and bypass probate delays.
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The process insurers use to assess your application, including health, occupation, lifestyle and medical history.
Why it matters
Underwriting determines your premium, any exclusions and whether cover is offered — honesty is essential.
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A policy option where the insurer pays your premiums if you cannot work due to illness or disability.
Why it matters
Keeps your protection in place during long-term illness when you may struggle to afford premium payments.
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Life insurance that covers you for your entire lifetime, guaranteeing a payout whenever you die.
Why it matters
Used for inheritance tax planning and legacy provision, but costs significantly more than term insurance.
Access to protection products from a wide range of insurers rather than a single provider's products.
Why it matters
Advisers must tell you whether their service is whole-of-market or restricted to certain providers, so you understand how widely they look.
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