Glossary of Terms

There are many different kinds of insurance available. Here are some of the better known types and a brief explanation of what they cover:


Pays out on the death of the person insured.

Other types

There are many other types of life insurance – for example Endowment and Key Person cover.


(Also known as Critical Illness)

Pays you a lump sum if you are diagnosed with any of the illnesses specified in the policy. Cover may be purchased separately or added to your term life insurance.

Total and Permanent Disablement

Pays you a lump sum if you have a serious illness or accident that means you will never work again. You can often add Total and Permanent Disablement cover to term life insurance.

Income Protection

Cover to replace some of your income if illness or an accident in excess of ACC, stops you from working.


Covers you for health problems that require hospital care.

You can also be covered for specialist consultancy and diagnostic tests.

ACC Cover

ACC covers you for injuries following an accident. The cover includes most treatment costs and can include compensation of up to 80% of your average weekly income before your accident. You pay a share of the ACC premiums through PAYE deductions from your salary.