Life insurance jargon buster

Life insurance jargon explained

• Term life insurance
  Provides a fixed cash lump sum pay-out if you pass away during the term of the policy. Comes in the form of either level term or decreasing term options
• Whole of life insurance
  Lifelong protection that guarantees a pay out when (not if) you pass away, (as long as premium payments are up to date)
• Joint life insurance
  Covers two lives simultaneously, however only pays out once, normally on the first death. Usually around 25% cheaper than paying for 2 single policies
• Family income benefit (or FIB)
  FIB is a term-based policy providing ongoing, tax-free, monthly payments instead of a cash lump sum as with traditional life insurance.
• Critical illness cover (or CIC)
  CIC is a tax-free, lump sum pay out if diagnosed with a life-changing illness. Can be added as either an additional element to a life insurance policy or as a standalone product
• Terminal illness cover
  Claim early if you're predicted to die of a terminal illness within next 12 months. Comes as standard on most life insurance policies, (and all policies we sell)
• Impaired life insurance
  Cover for higher-risk individuals including health and lifestyle implications. Reassured offer a dedicated inhouse impaired risk team, who are on hand to help those who've previously been declined
• Sum assured
  The pay out amount from an insurance policy is called the sum assured
• Non-disclosure
  Failure to provide complete and honest information during application. Lying on your life insurance application could invalidate your policy and a pay-out may not be issued
• Life assurance
  Life assurance guarantees a pay out when you die. Whole of life insurance and over 50 plans are examples of life assurance policies
• Guaranteed Insurability Option
  Ability to change policy details without additional underwriting
• The Financial Conduct Authority (FCA)
  Financial services regulatory body.
• Waiting period (or qualifying period)
  The period in which cover must be active before protection is valid. The waiting period is usually 12 or 24 months and is present on the vast majority of over 50 plans
• Waiver of premium
  Premium payments paused if you are out of work for 26 weeks or more
• Write life insurance in trust
  Signs over the rights of your policy to a trustee upon your death, (similar to an executor of a will). By doing this the proceeds from your policy avoid forming part of your estate and thus are not subject to 40% inheritance tax and probate. At Reassured our customer services team can help guide you through the trust process and help with the application