Income Protection jargon buster

Income protection umbrellas

Our article “What is Income Protection?” explained what Income Protection is, how it works and the key facts and features you needed to know. Another one of our articles, “Do I really need Income Protection”  gave you examples of people who’s Income Protection has really worked for them, who might have been in similar situations to yourself.

If you are now considering insuring your wage and taking out an Income Protection plan, we have written a quick and easy jargon buster that will help you understand certain terms that are used when applying for Income Protection.

Jargon Buster:

  • Accident- An unplanned event that results in an incapacity
  • Benefit- The amount of money you will receive from us in the event of a successful claim
  • Deferred Period- See ‘Waiting Period’ below
  • Exclusion- A clause in the Plan which specifically excludes incapacity caused by certain medical conditions or injury suffered as a result of taking part in particular pastimes/activities
  • Exclusion Period- The length of time during which any ‘Exclusion’ will apply
  • Incapacity- A condition caused by sickness, accident or injury which stops you from doing your normal occupation or any similar kind of work
  • Income- The money you receive for performing your normal occupation. This can include ‘Dividends’ for Company Directors
  • Income Protection Plan- A type of insurance which pays benefits to the Insured when they are incapacitated (unable to work) due to sickness, accident or injury
  • Injury- Physical damage suffered by a person
  • Insurance- An arrangement in which a company agrees to provide a guarantee of compensation for specified loss of income in return for the payment of a specified premium
  • Insured- The person whose absence from occupation because of incapacity will result in the payment of a claim
  • Medical Condition- A disease, sickness or illness from which a person may suffer
  • Occupation- A job or profession
  • Own Occupation Cover- Insurance which becomes payable if a person cannot perform his/her own specific occupation
  • Plan- A contract between an Insurance Company and the Insured confirming the details of the plan and sets out the circumstances in which a benefit will become payable
  • Plan Term- The length of time during which the plan will remain in force provided the premium continues to be paid
  • Premium- The amount the Insured needs to pay for the Plan
  • Statutory Sick-Pay- A payment made by Employers to most Employees who are unable to work for more than 4 days as a result of incapacity and payable for a maximum of 28 weeks
  • Subrogation- A legal right for an Insurance Company to pursue a third party that caused an insurance loss to the insured
  • Suited Occupation- An occupation for which the Insured may be suited by means of qualifications or experience but is not their ‘Own Occupation’
  • Waiting Period- The length of time selected by the Insured between the onset of the incapacity and the date of the payment of the benefit

 

If you have any more questions feel free to contact our friendly customer service team on 0330 134 5898.

Please note: All information within our news stories is correct at the time of publication, and we make every effort to keep content accurate. However sometimes information may be out of date. You should not rely on this information when making financial decisions as no financial advice has been given.