Jargon buster for Insurance Terms

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Accident, sickness and unemployment insurance

See mortgage protection insurance and payment protection insurance.

Buildings insurance

Pays the cost of repairing or rebuilding your home if it is damaged by unforeseen events (as detailed in the insurance policy).

Contents insurance

Covers the cost of replacing possessions lost or damaged due to unforeseen events (as detailed in the insurance policy).

Cover

The protection given by insurance.

Critical illness cover

Insurance that pays a lump sum if you're diagnosed with a specified critical illness covered by your policy.

Dental insurance

A type of health cash plan that focuses specifically on dental care expenses.

Excess

The amount you agree to pay before your insurer pays the rest of the bill (for example, the first £100 of a claim).

Exclusions

Things that your insurance will not cover.

Health cash plans

Provide limited cash sums towards everyday healthcare bills.

Income protection (or permanent health insurance)

Insurance that pays you a monthly income if you're unable to work due to illness or injury, until you are able to return to work, or retirement, whichever is the sooner.

Investment-backed life insurance

Life insurance which has two roles: to protect you, and to act as an investment. These include Whole-of-Life insurance, With-profits bonds, Income and growth bonds, Endowment policies and Maximum Investment plans.

Joint life

Typically, life-cover to protect a family in the event of either or both parents dying.

Mortgage protection insurance

Accident, sickness and unemployment insurance (or payment protection insurance) used to cover your mortgage payments.

Motor insurance

Pays out if you injure someone or damage someone else's property while driving. It may also cover damage to your own car.

No claims discount

A discount if you haven't made a claim on your insurance policy within a specified period of time (for example 3 years) but it does not mean the premiums to which the discount is applied do not rise.

Payment protection insurance (or accident, sickness and unemployment cover)

Pays out a regular amount (repayments of a loan, although some cover bills as well) for a limited time – a year, say – if you can't work for health reasons or redundancy.

Policy

The details of what your insurance covers, what it doesn't, and what it costs, normally provided separately.

Premium

The amount your insurer requires you to pay for insurance.

Private medical insurance

Insurance that pays for you to receive private medical treatment.

Schedule

The specific details of what's covered, and what's excluded, by a policy.

Term insurance (or term assurance)

Life insurance giving protection for a specific amount of time (the 'term').

Travel insurance

Pays out if you unexpectedly have to cancel your holiday; are taken ill while away; accidentally injure somebody or damage somebody else's possessions; lose your own possessions; and so on...

Link to Previous article : Getting help with Travel Insurance

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