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TRANSLATING THOSE WORDS FOR YOU
JARGON
BUSTER
We know it’s hard to get sorted when you’re wading through technical terms and industry speak – so here’s a handy jargon-translator to help you talk the talk.
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The Accident Compensation Corporation supports New Zealander’s who suffer a physical injury. It’s main role is to cover people’s treatment costs and/or lost income whilst they recover. Does not cover illnesses or deaths due to natural causes.
Is a payment for a Disability benefit which reduces the total sum of your Life Cover.
Specialist in risk analysis in relation to insurance. Their job is to analyse risks and to calculate pricing based on that analysis.
The terms by which an insurer or lender agrees to accept an application for insurance.
An qualified insurance person registered as an adviser (RFA ) who is independent of the insurance providers whose products they sell.
The annual equivalent of the premium payable by the customer e.g. $100 per month is the equivalent of an API of $1200.
The maximum period for which a benefit will be paid. Standard periods are 2 years, 5 years, to age 60, to age 65 and to age 70.
Sometimes known as an advisor or agent, a broker is an intermediary appointed by a person seeking insurance. They advise clients on insurance matters and arrange appropriate cover.
A measurement of obesity. The calculation is weight in kg divided by height in m2. for example, if someone weighed 66kgs and they were 1.65m tall, the BMI calculation would be 66/2.72 = 24.
Underweight = BMI < 18.5; Average = BMI 18.5 – 24.9, Overweight = BMI 25 – 29.9; Obese = BMI 30 – 35; Morbidly obese = BMI> 35.
The process by which a demand is made against the proceeds of an insurance policy.
The payment made by product providers to intermediaries for the sale of their products.
The amount of protection provided by an insurance policy.
The maximum period for which a benefit can be claimed on.
This is where the sum insured increases each year by the Consumer Price Index (CPI) percentage in order to keep the benefit amount in line with the cost of living. This mean total premium will increase accordingly. Some insurance providers also offer a minimum percentage option.
Usually known as either “Critical Illness”, “Trauma” insurance, Progressive Care or “Living Insurance”, this benefit may be paid on diagnosis of one of a range of medical conditions or accidents specified in the policy. Underwriting considerations are generally similar to those for life insurance. This type of cover may be sold as a “stand-alone” benefit or accelerated from another benefit, generally life cover. It is similar in principle to Term Insurance except that it insures against a number of major traumatic illnesses rather than death.
When an insurer or lender refuses to accept an application for its products or where a claim against an insurance policy is turned down by the insurer.
When an insurer delays the acceptance of an application for insurance until a current risk reduces to an acceptable level or an unknown risk is able to be quantified.
Failing to disclose information requested or providing false information is called non-disclosure and can have a serious impact on your ability to claim.
The first portion of a loss, being an agreed or fixed sum, which the insured (sometimes in consideration of a reduction in premium) agrees to bear. Voluntary – An excess chosen by the insured in exchange for a discount in premium. Imposed – An excess applied by the Group as a result of either higher than usual risk or an adverse claims experience (or past losses with a previous insurer).
Anything that is not covered by the policy. There may be blanket exclusions that apply to all customers and specific exclusions that apply only to specific customers.
A special condition that applies to an insurance policy for example an endorsement may state that drivers younger than a nominated age are not covered under the policy or it may state that a particular medical condition is not covered e.g. asthma.
Anything that is not covered by the policy. There may be blanket exclusions that apply to all customers and specific exclusions that apply only to specific customers.
By law there is a 15 day ‘free look’ period for insurance policies whereby the client can cancel and receive all premiums back.
A single insurance policy which insures a group of individuals. Commonly provided for employees of the same company. A master policy is issued to the company rather than individual policies being issued to the employees.
no terms available
A benefit paid in advance of the full sum insured eg The funeral benefit on a life insurance policy. The funeral benefit is paid out immediately, while the remainder of the life cover will require receipt of further paperwork like the death certificate.
The date a contract of insurance comes into force and an insurer goes on risk (i.e. the effective date).
This is a form of income replacement cover under which an income benefit is paid when a person is totally or partially unable to work due to an accident or a medical condition. After the initial waiting period, a benefit is usually paid until the individual is declared fit to return to work. Different underwriting considerations apply to disability insurance because there is a higher likelihood of disability than of early death. Like Term insurance, Disability Income Insurance has no surrender value.
Benefit amount is not agreed. Evidence of income is required at claim time and may be less than specified in the policy schedule.
A contract is issued once the application has been accepted by the product provider and all requirements to complete the contract have been received.
The IFSO Scheme provides a free, independent service for consumers with a complaint about services provided in New Zealand by participating financial service providers. www.iombudsman.org.nz
Two alternative ways in which 2 people can be covered by 1 policy
1) First death: The life insurance company will pay a death benefit when the first person dies and then the policy will finish
2) Survivor: The life insurance company will pay a death benefit for both lives. Once the second person dies the policy will finish.
This is insurance cover a business can take out to protect itself in case a vital member of staff dies or becomes ill and cannot work.
A policy of insurance lapses when premiums remain unpaid for a predetermined period. A lapsed policy provides no coverage during the period it remains lapsed.
Life policy in which the amount to be paid on the death of the life assured remains constant throughout the term of the contract. Premiums generally increase throughout the term reflecting the increasing age of the life assured.
A life insurance policy pays a benefit on the death of the life insured. That is the basic benefit but a life insurance policy may have additional benefits such as critical illness cover, in which case a benefit will be payable before the death of the person insured.
A person covered by a life insurance policy.
An additional benefit (rider) on an accelerated trauma or disability policy that gives you the option (after a specified period) to “buy-back” the amount of life cover that has been deducted.
A declaration made by the policy owner to confirm that their original policy document has been lost, destroyed, or not received. Upon receipt of the declaration, a copy of the policy document, which replaces the original document in all respects, is then sent to the policy owner. Loss of Policy Declaration forms can be obtained from the Insurance Company.
Process carried out by insurers before entering into a contract of insurance. Depends on the amount of insurance and the medical condition of the insured. Can involve medical examinations and blood tests. Costs are normally met by the insurer.
Government body responsible for establishing the safety and efficacy of medications. Only Medsafe approved treatments are able to be prescribed in NZ.
The legal form required to be completed which enables ownership of a contract to be assigned from one party to another.
This is the failure to disclose material information to the life insurance company. Applicants for insurance have a legal duty to advise life companies of any material facts or matters that may affect the insurance company’s decision to accept the application for insurance, or setting the terms and conditions of cover. Failure to fully and accurately disclose all such material facts or matters could result in a future claim being declined.
The requirements needed by a product provider to enable a contract to be assessed, completed and issued.
A person applying for life insurance will be required to complete a statement giving details of their personal medical history and that of their immediate family in order for the life insurance company to assess their health risk.
A report of an applicant’s complete medical history provided by the applicant’s normal attending physician at the insurer’s cost. Used for assessing the health risk of an applicant.
The entire contract terms and conditions.
Fixed amount charged by the insurer and included in the premium.
A physical defect, medical condition or disease that an applicant has suffered from or is suffering from at the date of an application for life or health insurance benefits.
The total amount payable to an insurer for an insurance policy. Is usually paid Fortnightly or Monthly but can be Annual.
The rate charged for each unit of insurance for that client excluding policy fees and loadings.
The new premium calculated each year for insured benefits.
Most life insurance contracts provide for a period between renewals of twelve months. The premium review date indicates the date that premiums will next be renewed.
Life policy for a specified term (eg 20 years) where the premiums remain level throughout. This levelling of premiums normally means that premiums will be higher than normal in the early years.
Government body responsible for deciding which Medsafe approved medications will be publicly subsidised.
The individual or organisation to whom the proceeds of the policy will be paid and whom has the right to make changes to the policy details subject to the insurance company’s normal processes.
Included as part of the policy document, the schedule outlines the specific details relating to the insured e.g. name, address, types and amounts of cover, premium payable etc…
An application form for insurance benefits. Completed by the Life Assured.
no terms available
When an insurance company pays a wholesale insurance company to share the claims risk with them. This helps the insurer to spread the impact of any one type of risk.
When an insurance policy has lapsed the insurer may allow those benefits to be put back into force upon receipt of the outstanding premiums. The company may require the insured to be re underwritten before agreeing to reinstate the coverage.
Benefit (usually trauma or disability) will not reduce the life cover if a claim is made.
The amount of protection provided by an insurance policy.
no terms available
The assessment of the risk posed to an insurer or lender by the individual demographics of the applicant and/or the asset to be insured.
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The period immediately following a disability for which no benefit is payable by the insurer. Clients can select their own qualifying period. Longer qualifying periods result in lower premiums.
Additional benefit offered by insurers whereby, for an increased initial premium, future premiums will be waived during periods of disability.
no terms available
no terms available
no terms available
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