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Bibliography of Terms:

Our Life Insurance definitions will explain what these terms actually mean.  We’ve gone with a list of A-Z, because it’s handy.

Accelerated (Specified / Serious / Critical Illness) Cover

Serious Illness Cover protects you if you get sick with one of the serious illnesses covered in your policy, such as cancer.  Accelerated Serious Illness Cover is the most cost-effective way of buying Serious Illness Cover.  So let’s say you buy Life Insurance and then add Accelerated Serious Illness Cover; any Serious Illness claim will reduce the amount of Life Insurance or Mortgage Protection by the amount of the claim.

Example:

You buy a Life Insurance policy of €500,000.
You add Accelerated Specified Illness Cover of €100,000.
You’re diagnosed with a cancer, as specified in your policy.
You receive €100,000 from your specified illness claim.
Your life cover is reduced by €100,000 leaving you with life cover of €400,000.

Additional (Specified/Serious/Critical) Illness Cover.

Sometimes this is mistakenly called standalone cover. A claim on this type of Serious Illness Cover won’t affect your Life Insurance cover. Let us use the same example as above.

Example:

You buy a Life Insurance policy of €500,000.
You add Additional Specified Illness Cover of €100,000.
You’re diagnosed with a cancer, as specified in your policy.
You receive €100,000 from your Specified Illness claim.
Your life cover isn’t affected. It remains at €500,000.

Additional Specified Illness Cover is more expensive than Accelerated Specified Illness Cover.

Broker

Someone, like Money Plus, who arranges and negotiates Life Insurance cover for clients. Let’s say you want to find the best deal.  If you contact us, we will go to all five of the life insurers in Ireland and get you the best offer.  We are an impartial Broker and we are particularly good at getting you a deal if you have a medical condition.

Convertibility (Medical Free Conversion / Guaranteed Cover Again)

This lets you convert your cover into a new policy when you’re older, even if you’re in bad health at that stage.  It’s a very valuable option in later years.

We find an example explains this best.

When Mary and Susan were 25, they both took out a 20 year Life Insurance policy.  Susan paid €10 per month. Mary added convertibility and paid €11 per month.  They were healthy & young when they first got their policy but in the 20 years until the term expires, they both get diabetes.  Mary and Susan’s policies are now up and they need new ones.

Mary’s policy is convertible, so she doesn’t have to tell the insurer about her diabetes. As she’s older, her premium is more expensive and comes in at €50 per month.

Poor Susan, however, doesn’t have a convertible option so has to tell the insurer about the diabetes and do a medical. She’s landed with cover of €150 per month.

It’s the same policy as Mary’s.

Dual Life Cover (Pays out on both deaths)

If you and your partner are insured on a dual life basis, there will be a pay-out on EACH death.

You don’t have to have the same amount of cover, which is important if there is a big difference in income. You can also insure yourself for a different amount of Serious Illness Cover than your partner.

Right now there is a life insurance company that offers Dual Life for the same price as Joint Life cover. Therefore, shopping around will always bring you value for your money.

Guaranteed Whole of Life

It fairly much does what it says on the tin: you’re insured for the entirety of your life. Naturally, this is more expensive than other types of Life Insurance as unlike Term Life Insurance (see below), the insurer is on the hook for a pay-out as long as you keep paying your premiums. There are several different types, see further down.

Income Protection/Permanent Health Insurance

Income Insurance/Protection gives you a replacement income of up to 75 percent of your salary if you can’t work because of an illness or injury. It kicks in after you’re unable to work for a certain amount of time, known as the deferral period.

The deferral period can be 4, 8, 13, 26, or 52 weeks. And the longer the deferral period, the cheaper it’ll be.

Indexation/Index Linked (Inflation Protection)

Indexation is a bit like inflation. Basically, you’ll get your Life Cover and it will increase yearly by a certain percent. The amount you pay will increase too.

Example

Let’s say you take out €100,000 index linked life cover. You are paying €10 a month for the first year. In year two, your cover and premium both increase by 3 percent.

You’ll have €103,000 cover and a premium of €10.30. In year three, it’ll go up again, unless you opt out.

It’s super useful if you want to increase your life cover over time in line with income increases – without having to do a medical.

Joint Life Cover

If you and your partner are insured on a Joint Life basis, the insurer will pay-out on one death. You can choose whether it pays out on the first or second death.

Mortgage Protection

A type of insurance you have to get if you’re buying a house in Ireland. Mortgage Protection pays off your mortgage to the bank if you die.  The premium is fixed (level) but the sum assured diminishes over the term. Your Bank will look for a legal assignment over it (hold it as security).

Over 50s No Medical Life Cover

This is a special (but very tricky) type of Life Insurance for those over 50 who want to get cover without underwriting.

You complete an application form and you get cover automatically.

Which sounds unreal and a bit too good to be true.  Because it sort of is. Usually, you can only get a small amount of cover and it only pays out on accidental death within the first two years.  It’s also expensive, so make sure you know exactly what you’re getting in to before you sign up. If you have an illness that prevents you getting normal life cover but isn’t imminently life-threatening then you should consider over 50s cover.

Should you shuffle off within the first two years due to an illness, the insurer will refund your premiums.

Premium

Your premium is the amount you pay for your Life Insurance.

Private Medical Attendants Report

A Private Medical Attendants Report is a medical questionnaire that an insurer sends to your GP to complete. It usually happens if you have a health issue and will ask questions about your medical condition, the treatment, and the prognosis.

This information will then go back to the insurers and the underwriters, who’ll use it to calculate the cost of your policy based on how much risk you pose to them.

Reviewable Whole of Life

Reviewable Whole of Life is not something we would recommend.  Keep that in mind as you read this definition.

So, Reviewable Whole of Life covers you for your whole life (good) but with the caveat of a review/premium increase by your insurer every 10 years when you’re young (bad), every 5 years as you get older and every year once you hit 60 (evil).

The policy will keep getting more and more expensive until you eventually cancel. You lose your cover and they keep all your premiums.

Serious Illness Cover/Specified Illness Cover

If you’ve read all the other definitions in this guide, you’ll already know what this is – Serious/Specified/Critical Illness Cover provides you with financial support if you’re diagnosed with one of the serious illnesses listed in your cover.

One thing to keep in mind is that this type of cover can be a bit tricky and that the illness you get has to match the definition of the illness as outlined in your policy, so be sure to know what you’re actually insured for before you sign up.

Section 72 Whole of Life

This is a type of Life Insurance that means your parents are really sound – or in fact you are a really sound as a parent.

This is basically a loophole to get out of paying inheritance tax: so Section 72 is a Revenue-approved Life Insurance policy that’s used to cover the cost of inheritance tax.

Term Life Cover

Term Life Cover, pretty descriptively, gives you Life Insurance cover for a set term, or an amount of time – in regular people speak.

It’s generally cheaper than Whole of Life, as your chances of outliving it are greater. If you are getting Term Life, make sure you get a convertible option, so you can get another policy without being poked and prodded at a medical exam or a massive price hike.

Underwriting

Before you get your policy, the insurer you apply to will assess the possibility of you making a claim on your policy (read: you dying/getting sick/becoming unable to do your job). Underwriters use maths and statistical analysis and other things you were probably taught a bit of in school to determine your chances of claiming.

They’ll look at stuff like your health, your medical history, your occupation, and any dangerous hobbies – anything that’ll raise your chance of kicking the proverbial.

In some (rare) cases, the underwriters will determine that you’re too high of a risk and decline or defer you, though that almost never happens. Worst case scenario, you’ll get coverage but it might be for a smaller amount or it might cost you more.