- Accelerated Benefits/Living Benefits Riders:
These riders let policyholders, which may be terminally ill or critically ill, draw upon a percentage of the face value of their life insurance policies. Conditions under which this option can be used and the amount available to the policyholder can vary depending on your cover.
- Accidental Death Benefit:
An extra feature of a life insurance policy that provides an additional benefit equal to the face amount of the policy if the insured dies as a result of an accident prior to a certain age.
A financial contract that provides ongoing income, usually used for retirement.
- Application form:
A form that supplies the company with necessary information on the applicant. Eg: age, sex, address, occupation, earnings, amongst others. The company uses this information to determine whether or not the applicant is insurable.
- Accumulation Value:
In Account Summary, the value of the annuity on the specified "as of date." Upon surrender of this policy, this value may be reduced by a surrender charge, policy fee, or outstanding loan.
- Needs Analysis:
A method for finding out how much life insurance the client needs.
The beneficiary in a life insurance policy is the person selected who is entitled to receive an insurance payout or inheritance on the insured’s death.
- Cash Value:
The savings element that builds up in a permanent life insurance policy, an endowment policy, or an annuity contract.
- Cash Surrender Value:
The Cash Surrender Value equals the Cash Value less policy debt.
In insurance, this is another name for the policy. With the completed and signed application attached, the issued life insurance or annuity policy forms a legally binding contractual agreement between the insurance company and the policy owner.
- Contingent Beneficiary:
The person selected to receive the death proceeds of a life insurance policy if the primary beneficiary predeceases the insured.
A type of life insurance policy that pays the face amount if the insured dies during a specific period of time and also pays the face amount if he or she lives to end of that period.
This term refers to losses or risks that a policy does not cover.
- Face amount:
The amount stated on the policy that will be paid at death or maturity. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the use of policy dividends.
- Cooling off period:
The time you have to change your mind and have your money back when buying insurance or other financial products or services. The actual time varies, so check your paperwork. The customary length of time for a "cooling-off period" is 30 days.
A request for payment of a loss which may come under the terms of an insurance policy.
A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.
- Death Benefit:
A payment made to a designated beneficiary upon proof of the death of the life assured.
- Decreasing Term Insurance:
A form of Term assurance under which the sum assured decreases during the term of the policy. It is a term life insurance policy with a level premium and a death benefit that decreases over time. Decreasing term insurance is sometimes used as a home loan cancellation insurance, with the death benefit reducing as the principal amount of the mortgage declines over the term of the mortgage.
An individual who relies on you for financial support.
- Financial advice:
Discussion and a recommendation about the most suitable financial product for you made by an adviser who is regulated by the MFSA.
- Final Expenses:
These are costs associated with one's death that must be settled prior to distribution of that person's estate. Final expenses may include funeral and burial costs, existing debts, taxes and other outstanding expenses.
- Grace Period:
An additional period of time, usually 30 days, granted in some types of insurance for the policy owner to pay the premium after it has become due. During the grace period, the coverage remains in force.
- Group Life Insurance:
Life insurance usually offered without medical examination on a group of people through a master policy.
- Guaranteed Renewable:
A provision included with some term life insurance policies that allow the insured to renew the coverage at the end of the term, generally at the insured's attained-age premium rate.
- Insurable Interest:
The principle requiring that no policy will be issued unless the policy owner and beneficiaries would be in a position to suffer a financial loss at the death of the insured. For example, eg: A business relationship (as in one partner on the life of another).
- Life Insurance:
Life insurance is a way to provide some financial security if you die, for people who depend on you. There are different types, but the policy usually pays out a lump sum or an income when the person insured dies.
- Long Term business:
Policies of insurance that are not renewable annually at the option of the insurer but continue for a number of years. Life assurances are the most common form.
- Level Premium:
A premium which remains unchanged throughout the life or term of the policy. With a whole life policy, the premium remains level for the insured's life. With level term insurance, the premium remains level for the life of the term; it may increase at each renewal, or the start of a new term.
- Level Term Rider:
Proceeds of this rider are payable to the beneficiary upon receiving proof that the person named as Covered Insured died while his or her coverage under this rider was in effect.
- Life Expectancy:
The average number of years of life remaining for a group of persons of a given age.
- Liability Insurance:
Coverage to meet expenses resulting from legal, financial obligations to others. For example, if you are sued because you are found to have caused an injury to another person (such as if your dog bites the paper boy) and the incident is covered under your homeowners' policy, the insurance company will assume the responsibility of paying legal fees and costs that result according to the terms and limits of the policy.
- Life Insurance:
A financial tool protecting against the loss of a particular person (the insured). A policy under which the insurance company promises to pay a death benefit upon the death of the person insured.
- Lump Sum:
In general, the receiving of annuity, pension or life insurance death benefits in a single payment.
Malta Financial Services Authority (Regulator of financial services in Malta).
- Maturity Date:
In life insurance, the date upon which the policy endows for its full face value.
- Joint Life Insurance:
A type of life insurance policy covering two or more people in which the proceeds are payable on the death of the first one to die.
In insurance, a false, incorrect or incomplete statement of a material fact, made on the application.
- Natural Death:
Death by means other than accident, murder or suicide.
- Option Renewable Policy:
The company may or may not renew the policy at each premium due date. The policy cannot be cancelled between such dates.
- Policy owner:
The person or organisation that owns an insurance policy. The policy owner generally has the right to change, renew, or cancel the policy and the obligation to comply with policy conditions, such as premium payments.
- Preexisting Condition:
An illness or condition that existed prior to the issuing of the policy.
The price charged for a period of coverage provided by an insurance policy and found by multiplying the rate by the number of units of coverage.
- Paid-up Policy:
Policy kept in force for a reduced sum assured after the premiums have ceased to be paid prematurely.
A vehicle used to provide a replacement income when you retire. There are different types of pension. In Malta there is only the Pension provided by the Government.
The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the insurance policy or the contract.
- Policy fee:
A charge made by an insurer for issuing a policy to help cover the one-time costs involved in issuing a policy.
- Policy Term:
That period for which an insurance policy provides coverage.
A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance.
An application by a proposer for insurance, on a printed form. The proposer becomes the insured when the application has been accepted and the contract brought into existence.
- Proposal Form:
The form used in most classes of business to elicit basic information about the insured and the risk being proposed.
The replacing of one life insurance policy with another. To prevent financial harm to the policy owner, agents and insurers must follow prescribed procedures.
The chance of loss. In life insurance, the probability of death.
Limitations or exclusions in a policy.
An addition to an insurance policy, generally one that expands or adds benefits (such as Waiver of Premium or Accidental Death Benefit or permanent and total disability).
- Suicide Clause:
A life insurance policy provision that specifies that if the insured, whether sane or insane, commits suicide during the first one or 2 years of the policy, the insurer will be liable only for a return of the premium.
- Sum Assured:
The cash benefit guaranteed by a Life assurance policy. The maximum amount for which an insurer is liable under a policy of indemnity or the sum payable as a benefit in policies such as Life assurance or Personal accident.
- Surrender Charge:
An amount retained by the insurer when a policy is cancelled, typically assessed only during the first five to ten years of a policy.
- Surrender Value:
Cash value of an insurance policy when discontinued. Surrender values are small in the early years of a policy - usually Nil over the first year or two. This is because expenses are highest at the beginning of the term of a policy and in the first few years there has been little time for interest to accrue.
- Single Premium Policy:
In life insurance - a contract in which the entire premium is paid in a lump sum at the beginning of the contract period. No additional premiums are required.
- Term Insurance:
Life insurance written for a specific time period after which expires with no value. This is payable only if the policyholder dies within the specified time period.
- Variable Universal Life Insurance:
A type of life insurance policy that combines the premium flexibility features of universal life insurance with the policy owner-directed investment aspects of variable life insurance.
- Whole Life:
Life insurance coverage that remains in force during the insured's entire lifetime, provided premiums are paid as specified in the policy.
An insurance company employee who reviews applications and makes underwriting decisions.
The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk and provide the applicant with insurance coverage.
- Uninsurable Risk:
One not acceptable for insurance
- Utmost Good Faith:
A duty imposed on both parties to an insurance contract. It is of greater force than ordinary good faith. The legal duty implies full disclosure of all facts material to the contract during negotiations for the contract.
- Waiver of Premium:
Enables you to stop paying policy premiums for the length of your disability, while continuing to receive life insurance coverage. Please refer to your contract for additional information including the qualifying criteria.