16 December 2020
Reading time: 5 minutes
Life insurance can be a tricky subject to navigate. Our Jargon Buster will help you tell your Over 50 Life Insurance from your Whole of Life Insurance.
Beneficiary: the person you have designated to receive the payout if you die during your policy term. Most likely to be your partner, child or a relative but can be anyone. You can name multiple beneficiaries.
Critical Illness Cover: cover that is added to a life insurance policy or purchased as a standalone policy. Critical Illness Cover will pay a lump sum if you are diagnosed with a critical illness covered by your policy.
Decreasing Term Life Insurance: lasts for a specific period of time, with the payout amount declining every year. As they pay a smaller sum the longer you live, Decreasing Term policies are often taken out to pay off mortgages and loans you expect to reduce during your lifetime.
Increasing Term Life Insurance: again lasting for a specific period of time, but the payout increases every year, normally in line with inflation to keep pace with the rising cost of living.
Joint Life Insurance: covers two people who often have shared financial responsibilities. This policy only pays out once, to the surviving policyholder following the first death. (first death policies)
Level Term Life Insurance: lasts for a specific period of time and pays the same fixed lump sum regardless of how far into the policy you die.
Premium: another word for your monthly payments. If you miss payments your policy could be cancelled, although some providers such as Royal London offer payment holidays in certain cases.
Over 50 Life Insurance: for people aged 50-80. Over 50 Life Insurance cover lasts for the whole of your life and acceptance is guaranteed with no medical questions.
Term: the length of time your policy runs. Different providers offer different policy terms, but they can range from 1-70 years depending on your needs.
Whole of Life Insurance: a life assurance policy that lasts indefinitely. The payout is a fixed lump sum agreed when you take out the policy and paid whenever you die.
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