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Glossary

Accidental Injury Benefit
A benefit paid by the insurer if death is caused by a visible and external event, which was unexpected and unintended, and which caused the injury and death of the person insured

Accidental Death Cover
A limited policy that only pays claims if you die in an accident.

Adviser (financial adviser)
Authorised by the Australian Securities and Investments Commission to provide advice and sell financial products, including life insurance products.

Agreed Value Policy
The monthly benefit paid in relation to an income protection claim, benefit is usually agreed and commencement of policy based on financial evidence provided.

Benefit Payment
The amount you may receive in the event of a claim generally either a lump sum or monthly amount

Benefit Period
The benefit period is the maximum period of time that you will be paid a benefit for any one illness or injury while the life insured is disabled during an income protection claim

Claim
The process to receive a payout in the event an injury, illness or death is triggered by the insured.

Cooling off period
A period of time after the commencement of a policy where the insured can cancel their policy without financial penalty, usually 30 days.

Cover Amount
The amount you are insured for in the event of a claim.

Death Benefit
The amount your beneficiaries are to be paid in the event of a death claim.

Duty of Disclosure
When applying for cover you are required to disclose to the insurer every matter that you know, is relevant to the insurer’s decision.

Exclusions
Certain events or conditions that are not eligible to be paid in the event of a claim eg if life insured dies in the first 13 months of the cover from an intentional act.

Expiry Ages
The age at which your policy expires, Life insurance policy can expire at age 99

Funeral Expense
An advance payout made in the event of death.

Future insurability
Permits you in increase your amount of insurance cover in the future without any medical requirements. Typically the increase is tied to personal events, e.g. at the birth of a child you can increase cover without medical requirements.

General Insurance
Insurance for cars, homes, travel, and home contents.

Health Insurance
Insurance for those events not covered by medicare, such as hospital stays and some medical procedures.

Income Protection
Insurance that provides a monthly payment in the event the insured can not work due to illness or injury.

Increasing Claims
An important feature of Income Protection Insurance policies. In the event of a claim the amount you receive each year is increased in line with inflation. This feature allows your benefit amount to increase and have a lesser affect your standard of living.

Increasing Cover with Inflation
A feature that increases the benefit payment with inflation of your life insurance policy and each anniversary.

Indemnity Style Policy
The amount paid in for an Income Protection claim based on the insured’s income at the time of claim.

Interim Cover
As soon as an application for insurance is lodged interim cover will be in place. With Life Insurance this will mean accidental death cover is in place while the application is underwritten.

Level Premiums
Premiums based on the age of the insured at the commencement of their insurance and will generally remain at the same level for the life of the policies subject to any increase in levels of cover.

Life insurance
Is a class of product which includes Term Life Insurance, Total Permanent Disability, Trauma and Income Protection insurance.

Life insured
The person insured under the policy.

Product Disclosure Statement (PDS)
Law requires insurers to include all the terms and conditions of the insurance product in a single document, known as the product disclosure statement (PDS). Always read this document carefully before buying insurance.

Policy
The insurance contract with the insurer, provided to the policy owner.

Policy Owner
Is the owner of an insurance policy. It may vary from the life insured as the owner could be a company, superfund or spouse.

Premium
The monthly, quarterly, or annual cost of an insurance policy.

Premium Waiver
In the event of a claim the premiums due on the insured’s policy are waived while they are on claim.

Stepped Premiums
Premiums are based on the age of the insured at the anniversary of the policy.

Terminal Illness Benefit
If you are diagnosed with a terminal illness and have less than 12 months to live you can claim on your Life Insurance policy.

Total and Permanent Disablement
In the event that you are unable to work and likely to never return to work again due to an illness or injury.

TPD Insurance
This is simply an abbreviation of Total and Permanent Disablement insurance.

Trauma Insurance
Insurance for specific medical events including heart disease, cancer and stroke and is generally paid as a lump sum in the event of a claim.

Upgrade Guarantee
This is a feature of some life insurance policies, that automatically updates the policy with new features or benefits incorporated after the policy was established.

Waiting Period
This relates to Income Protection Insurance and is how long you must be unable to work due to sickness or injury before your Insurance payments begin. E.g. with a 30 day waiting period, you would have to be unable to work for 31 days before being able to receive any benefits.

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