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You can use our glossary
to find the definitions of many terms you will come
across when arranging a secured homeowner loan
Click on a letter A
to Z for terms beginning with that letter
A
ABI - Association of British Insurers
The ABI is a trade association of British
Insurance Companies. It has more than 400 members, who
provide over 97% of the insurance business in the UK.
(www.abi.org.uk)
Actuary
An actuary is somebody who calculates insurance risks and
premiums.
Assured
Those insured under the terms of an insurance policy.
B
Benefit
The money paid to the policyholder when a claim is made.
Bid Price
The selling price or cash-in value of your unit holdings.
Bond
A form of investment offered by insurance companies which will be paid back at
maturity as a lump sum with interest.
Bonus
Relates to a with-profits policy. The amount of money added to the benefit
payable under the policy. The amount is dependent upon the profits made by the insurance company.
Added bonuses cannot be taken away.
C
Churning
This refers to the process involved when a client
surrenders one insurance policy
to take another out with a different insurance company. It is usually inadvisable from the point of view
of the consumer as there is most often financial loss involved.
Convertible Term Assurance
A term insurance policy which gives you the option to convert your current policy to a
whole-life or endowment insurance policy, without having to take further medical examinations.
Critical Illness Insurance
A policy that pays out a lump sum on the diagnosis of life threatening illnesses indicated in the terms of the plan.
D
Decreasing Term
A term insurance policy in which the cover is reduced by a specific amount each year,
decreasing to nil at the end of the term. The amount you pay into the policy in most circumstances will
stay the same throughout the term. This type of insurance is commonly used to cover a repayment mortgage,
as they are designed to pay the outstanding debt in the event of your death. There is no
surrender value for
this policy.
Deferred Period
A period of delay prior to payment of benefits under a protection policy. Periods are
normally 4, 13, 26, 52 weeks, the longer the period the cheaper the
premium.
E
Endowment Insurance
Combines saving with some protection. If you have a
unit-linked endowment insurance plan,
your money is invested in an insurance company's Life Funds.
The plan is designed to pay the policyholder
a sum of money after an agreed number of years (or on the death of the policyholder); the exact amount
received depending upon the growth of the funds invested in.
Estate
This term refers to a person's collective assets; the combined value of their savings,
property and possessions minus any debts or other financial obligations.
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Life insurance guide
