Life Insurance Glossary
Here we define some frequently-used life insurance terminology:
- Convertible Term Insurance
- This is effectively level term life insurance with the built in advantage of being able to convert the policy into something different – e.g. you may want to switch to a whole of life assurance policy at a future unspecified date.
- Critical Illness insurance
- Not offered as a standard part of a life insurance policy, this type of cover pays on a doctor’s diagnosis of a critical illness during the life policy term assured – this is frequently regardless of an eventual recovery. LifeCube can offer critical illness quotes in addition to a standard life insurance quote.
- Decreasing Term Insurance
- This type of life insurance decreases at a fixed-rate every year (however, not mortgage linked).
- Guaranteed Premiums
- This simply means that rates are guaranteed to stay the same throughout the policy term. Rates may be reviewed at the insurance company’s discretion – usually after five years.
- Increasing Term insurance
- Insurance that increases every year (no medical required). Useful because individuals may require additional insurance in line with increases in inflation, income or personal circumstance.
- Level Term Insurance
- Life insurance cover that pays a fixed-lump sum if an individual dies within the policy period. The premiums you pay monthly usually remain static as does the lump sum your loved ones would receive.
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