Over 50s jargon buster
It’s easy to get bogged down by technical terms and abbreviations when trying to research what type of insurance is best for you. Here at financialadvice.co.uk, we have asked our insurance experts to put together a handy jargon buster which focuses on over 50s life insurance, but also talks about what other types of insurance options are open to you. Don’t forget, if you have a financial question about anything we have covered, please free feel to call, email or send us your question via our question box and we can guide you on what insurance may fit your circumstances best.
Convertible term assurance
Convertible term assurance policies have a known level of cover that will pay-out in the event of death within a set time. However, they also have the option to convert. The conversion option allows you to adapt the plan if your circumstances change. It can be converted to either an endowment assurance policy , which is a life insurance contract designed to pay a lump sum after a specific term, or a whole of life assurance (provides life insurance for an unlimited period).
Decreasing term life insurance
With decreasing term life insurance policies the sum assured decreases over the term of the policy. These policies are often used to cover a debt that reduces over time, such as a repayment mortgage. The premiums may be cheaper than for level-term cover as the amount insured reduces over the term of the policy.
Family Income Benefit policies
Family Income Benefit policies are a type of decreasing term policy. Instead of a lump sum, it pays out a regular income to the beneficiaries until the end of the policy term if you die.
Financial Adviser
This is someone who has the compulsory professional qualifications to advise people on their financial planning. The matters they can discuss include: Pensions, Investments, Insurance, Mortgages, Wills & Trusts, and Tax.
To discuss the issues listed above, the financial adviser would have to be regulated, and this means being registered with the government appointed body which oversees financial services – the FCA (Financial Conduct Authority).
Advisers working with pensions and investments also must be on the Financial Services Register, which is a public record of all the firms and individuals in the financial services industry that the FCA regulates.
Fixed premium
This is a regular payment amount that is guaranteed to remain the same till the end of a policy.
Guaranteed acceptance
‘Guaranteed Acceptance’ is used to describe a life insurance plan where no medical information or history is requested and the applicant is therefore guaranteed to be accepted for the plan. An example of this type of plan is an Over 50s Plan.
Guaranteed Insurance Payout
This is the the minimum amount that is guaranteed to be paid in the event of a claim on an insurance policy.
Legacy
A ‘Legacy’ is a sum of money left to an individual’s next of kin upon their death.
Level Term Life Insurance
A ‘Level Term Life Insurance’ policy has a payout (the sum assured) that remains the same throughout the policy term, no matter when a claim is made.
Life Assured
The way to describe the person whose death will result in a policy becoming payable
Lump sum
This is the single sum of money paid out in the event of a claim on an insurance policy
Over 50s Life Insurance
This is a “whole of life” regular premium insurance policy that is only open to people aged 50 or over. The lump sum paid out when a person dies can be used to cover funeral costs, and the proceeds of the plan can be paid directly to a specified funeral provider if the policy holder so chooses.
Premiums
“Premiums” are the regular payments made by a policyholder to maintain the insurance policy.
Policyholder
This is the person who is the actual “owner” of the policy and can be someone other than the “Life Assured”.
Renewable term assurance
This insurance can be renewed at the end of it’s term, without the life assurance having to provide any medical evidence.
Sum assured
This is the agreed amount paid by an insurer to a policy holder when a claim is made.
Whole of life insurance plan
This is an insurance policy that provides life insurance to a person for the whole of their lives and is guaranteed to pay out whenever death occurs.
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