How does it make you feel when your insurance salesman ends a two hour gefuddle with you saying…
“…so I think we'll get you a $500,000 term life policy with stepped monthly premiums, $100,000 accelerated trauma rider, CPI Indexing and premium waiver benefit…”
In my opinion, it would be perfectly reasonable for you to suffer 'insurance rage' if an insurance salesman throws this kind of jargon at you.
Just in case the very worst happens and you're confronted by such an insurance salesman, don't panic... just refer to this Blog for English translations.
And then the only 'waiver benefit' you'll really need is to wave your insurance salesman goodbye, go online, and do it yourself!
Insurance jargon... English…
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Insured event |
This is the reason you’re taking out insurance. For example, if you’re taking out accident insurance then the insured event is ‘an accident’. |
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Insured Person |
This is the person who is covered under the policy. If it’s a life insurance policy, then it’s the insured person’s life that’s covered. |
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Sum Insured or cover amount |
This is the amount that will be paid out under the insurance policy. |
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Insurance Policy |
This is what insurance people call the contract that binds the insurance company and the ‘insured person’. Why not just call it a 'contract' or 'agreement'?? Dunno. |
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Policy Owner |
This is the person that is entitled to authorise changes to the policy and is generally responsible for premium payments. |
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Premiums |
These are your regular life insurance payments... typically monthly. Why the insurance industry had to invent it's own word to replace the perfectly good word 'payment', I'll never know. |
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Single Premium |
Sometimes insurance companies offer you the opportunity to pay your premiums as single instalment when the policy starts. |
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Stepped Premiums |
Many life insurance policies have premiums that increase on a regular basis to match the risks associated with your advancing age. |
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Level Premiums |
Some insurance policies have premiums that do not increase; they remain the same each year. |
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Voiding a Policy |
If you are untruthful when you apply for an insurance policy or when you make a claim, the insurance company can cancel your policy as if it had never existed and without having to pay back your premiums. |
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Beneficiary |
This is who the insurance company pays the proceeds of a life insurance claim to. It is usually a person, but can also be a Trust or a company. |
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Rider benefits |
This term is used to describe additional insurance cover of a different type added onto a policy; for example, a disability benefit added onto a life insurance policy. |
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Accelerated benefit |
Let’s say you have life cover for $100,000 and this includes an accelerated benefit of $20,000 for terminal illness. Then if the $20,000 is paid out for a terminal illness claim, the remaining life cover reduces to $80,000. |
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Waiver of premiums |
Some policies have a benefit such that the life insurance company will waive your premiums in circumstances where your income is interrupted. |
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CPI Indexing |
This is where the insurance company automatically ads a CPI increase to your cover amount each year to keep pace with inflation |
