21 May Life Insurance Glossary
When researching for the best life insurance it is helpful to know for sure what all those terms really mean. Only when you know what is meant by a particular term will you be able to make a true life insurance comparison between different companies and so find the best insurance for your needs without paying too much. The following terms are frequently used by insurance agents or found on insurance websites: –
- Automatic Indexation of Benefits Policies. These insurance policies have a clause that automatically adjusts the amount of benefits to the Consumer Price Index.
- Premium: this is the amount you pay to get a certain amount of life insurance. It can be paid monthly, annually or bi-annually.
- Beneficiary or Nominated Beneficiary is the person who will receive the payment upon your demise.
- Cover or Death Cover is another name for life insurance.
- Life Insurance Calculator is an online tool that can help you work out how much insurance you need and how much you will have to pay for it.
- Renewal is simply the date that your insurance policy is renewed each year. Certain changes in premiums or the policy may take effect at renewal.
- Duty of Disclosure means that it is your duty to tell the insurance company everything pertaining to your health and lifestyle that could pose a greater risk.
- Exclusions. Some sports or hobbies that are deemed extremely high risk are excluded from some life insurance policies. If you partake in one of these and are killed, your beneficiaries will not be paid.
- Guaranteed Future Insurability means that you will be able to increase your future insurance without any health checks.
- Premium Loading means that you may be asked to pay more if your risk factor goes up.
- Stepped Premium means that your payments will be recalculated each year – mostly they go up.
- Underwriting. This is the process of being evaluated for insurance. Your occupation, health, income and sporting activities are all examined to ensure you are an insurable person. If you are not your application will be rejected.