Terms and Conditions

Life insurance

Insurance that guarantees a specific sum of money to a designated beneficiary upon the death of the insured or to the insured if he or she lives beyond a certain age.

Critical illness

Insurance is an insurance that makes a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed on the insurance policy and survives a minimum number of days (the "survival period") from the date the illness was first diagnosed.

The schedule of insured illnesses varies between insurance policies, so make sure you know what illnesses are covered.

The "survival period" also varies between insurance companies. 30 days and 28 days are the most common survival periods but some companies have adopted a 14 day survival period.

Insurance companies insist that the diagnosis of a qualifying critical illness must be made by a physician who specialises in that illness or condition.

Income Protection Insurance

Also known as Income Replacement, Disability Income or Salary Continuance

The definition of income protection insurance is that it will pay a regular income to a person if they are disabled by a sickness or accident. The maximum benefit covered is usually 75% of gross income after business expenses.

The purpose is to continue an income stream in order to repay debts and maintain current lifestyle To provide the ongoing ability to maintain other protection, savings, investment and retirement plans Taxation

The premium can be tax deductible if the person is normally eligible for a tax deduction for their superannuation contributions. For example, a self-employed person. Benefits are not taxed if within a person's Pension RBL. Lump sum tax applies if benefits are paid to non-dependants.

Health Insurance

Insurance against expenses incurred through illness of the insured.

Payment Protection Insurance

(PPI) provides an income to maintain a borrower's debt repayments in the event of an accident or sickness that prevents them from working, or unemployment.

PPI policies are obtainable to protect most forms of personal debt, including personal loans, mortgages, and credit card repayments. Insurance cover is frequently purchased through the lender when the finance arrangement is organized. However, stand-alone policies are available at any time.

To be qualified for PPI cover, the purchaser will typically have to be aged between 18 and 65 (or higher in some circumstances), and employed for at least 16 hours a week (or on a long term contract or have been self-employed for a period of time).

All PPI policies have a waiting period at the start of each claim before payments commence.

Once the insurer has accepted a claim, the payment periods will vary but claims are typically, paid for up to 12 months (but some may last as long as 24 months).

Whilst Payment Protection Insurance is the formal name given to this type of insurance, it is also sold under a host of other names such as: Accident Sickness and Unemployment Insurance, Accident Sickness and Redundancy Insurance, Premium Protection Insurance, Income Protection Insurance, Mortgage Payment Protection, Mortgage Payment Insurance and Loan Protection Insurance.

Total Permanent Disability

(TPD) is a phrase used in the insurance industry. Generally speaking it means that because of a sickness or injury a person is unable to work in their own or any occupation for which they are suited by training, education or experience. An individual or group of individuals can insure themselves against it, oftentimes as part of a life insurance package or sometimes separately.

Insurance companies often have slightly different definitions of what determines permanent disability, however typical definitions would include: Loss of two of: eyes, arms or legs. Absence from work for six months due to an accident or illness, without expectation of returning to work. TPD differs from income protection insurance in that the insured person must be permanently disabled for the insurer to pay out, rather than just absent from work for an extended period of time. Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of catastrophic financial loss.


Buildings Insurance

This covers the cost of rebuilding or repairing the structure of the property. Lenders insist you have enough buildings insurance before they give you a mortgage. With leasehold properties, it is the freeholder's responsibility to arrange buildings insurance, although the freeholder will usually pass on the charges to the leaseholder.


Contents Insurance

This is the insurance of contents within your home, for example jewellery, paintings, furniture, clothing and personal possessions. Lenders usually offer contents insurance to borrowers, but it is not essential that you should take it from them, or at all. Some policies offer a wider policy covering more risks others offer less and with lower premiums. Some contents policies will include items in your cars, on student property, or when you are travelling. Contents cover is a separate type of insurance to buildings insurance, which covers the structure of your property, however they are often sold together and some insurers will offer a discount if purchased together.

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