Glossary terms

A

Accelerated benefit

If a claim pays out under an accelerated benefit, this reduces the cover amount under any related benefit on the policy. For example, 1Life has a Pay Now funeral benefit that pays out R50 000 of the life insurance cover within 48 hours of a valid claim being approved. Once the life insurance claim is finalised, the balance of the cover amount will be paid out less the R50 000.

Accidental death

A sudden and unforeseen event occurring at an identifiable place and time, which has a visible, violent or external cause, and results in the death of the life assured.

Accidental death benefit (ADB) cover

An accidental death benefit covers the life assured for accidental death, such as in a car accident, and not for death due to natural causes such as a terminal illness.

Accidental disablement

A sudden and unforeseen event occurring at an identifiable place and time, which has a visible, violent or external cause, and results in the disablement of the life assured.

Aggregation of cover

The sum of life insurance benefits owned by the policyholder, across all insurers, used to determine the maximum allowed. The insurance industry uses aggregation to prevent clients from purchasing life insurance with the intention to better their circumstances.

Annual benefit escalation

The percentage by which cover increases each year on the policy anniversary.

Annual premium escalation

The percentage by which premiums increase each year on the policy anniversary.
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B

Beneficiary

On the death of the life assured, this is the person or institution stated in the life or funeral insurance policy to whom the insurer pays the cover amount to.

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C

Commencement date

The date on which cover under the contract starts.

Contract term

The length of time the life assured will enjoy cover under the contract.

Cooling-off period

The policyholder may reconsider and/or cancel his/her contract during this period, without incurring any penalties, provided he/she has not made any claims.
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D

Deferment period

The period of time that has to elapse, after occurrence of an event that leads to a disability insurance claim, before the life assured is entitled to receive a benefit.

Disablement cover

The benefit that pays out in the event of the disablement of the life assured. Disability benefits vary with different insurers and products; for instance, some products cover the life assured for specific events and other for occupation-related disability events. 

Dread disease cover

The benefit that pays out if a doctor diagnoses the life assured with a life-impacting or life-threatening disease.

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E

No entries available

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F

Financial services provider

The authorised financial services provider that sells a life insurance or other policy to you.

Financial underwriting

measures the potential financial loss to the insurer to determine the proposed sum assured and product they can accept. Medical underwriting measures the health status of the life assured to determine whether to offer or deny cover and at what premium.

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G

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H

Hazardous pursuits

Activities (normally of a physical nature) that increase the risk of death or disablement for the life assured. These activities include, but are not limited to, rock climbing, scuba diving, paragliding, hang-gliding, fighting (except for self-defence) and speed contests.

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I

In force

The policy benefits have not expired or been cancelled; premiums are being paid and are up to date.

Insurable interest

A person has an insurable interest in the life of the life assured if the death, disablement or illness of the life assured would result in financial loss for that person. This means that there needs to be a recognised relationship between the policyholder/owner and the life assured. Because of this relationship, the policyholder/owner would suffer a financial loss, should an unexpected event occur to the life assured. Where no insurable interest exists, the applicable benefits will be void from the commencement date.

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J

No entries available

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K

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L

Life assured

The person on whose life events the benefits under the policy become payable.

Life cover

The life insurance benefit that pays out in the event of the death of the life assured.

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M

Material information

The life assured must provide information to enable the product supplier to accurately assess the risk they are taking on. They must supply the information before the policy commences because the product supplier will use it to determine acceptance or declinature of the risk, any special conditions that may be applied, and whether there is a need for extra evaluations before they confirm cover. This could include, but may not be limited to, the life assured’s medical history, smoking status, lifestyle, hazardous pursuits, occupation, income, and any existing life assurance policies for the life assured.

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N

Natural death

Death that occurs from natural causes such as disease or old age, rather than from an act of violence or injury sustained in an accident.

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O

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P

Policy anniversary

The date one year from the commencement/cover start date, and every year thereafter for the life of the policy.

Policyholder/owner

The person or institution that owns the policy and is usually the life assured. Although there may be a different person paying premiums on the policy, the policyholder/owner is ultimately responsible for the payment of premiums on the policy.

Premium guarantee period

The length of time for which the product supplier guarantees premiums not to change, other than through compulsory annual premium escalations.

Premium payment term

The length of time for which premiums are payable for cover. This would apply when disability insurance is purchased. Policy holders are covered for the full amount up to their 60th birthday or age of retirement, which ever happens first. From 60 to 65, the level of cover deceases until a zero balance is reached.

Product supplier

The authorised financial services provider that underwrites the life insurance policy.

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Q

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R

Retrenchment benefit

This benefit is only applicable to credit life cover and is payable on the termination of the life assured’s employment. Retrenchment due to adverse business conditions, introduction of new technology, or the reorganisation of the business, resulting in staff reductions, may result in a benefit payout.

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S

Stand-alone benefit

If a claim pays out under a stand-alone benefit, this will not reduce the cover amount under any other benefit on the policy.

Sum assured

The amount of cover that the life assured applied for with the product supplier. The cover amount for a level sum assured product remains the same for the life of the policy; for an escalating or increasing sum assured it increases on every policy anniversary; and for a decreasing sum assured, it reduces gradually. An example of a level sum assured policy is life insurance, where you are insured for a set amount. A decreasing sum assured policy example would be that of disability insurance that starts to decrease from the life assured’s 60th birthday or retirement age.

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T

Term assurance

A type of life insurance that limits cover to a specified period.

Terminal illness cover

The life insurance benefit that pays out the full life cover amount to the life assured, while they are still alive and in the event of their doctor’s and the insurer’s chief medical officer’s (CMO) diagnosis that the life assured suffers a terminal illness with a life expectancy over a certain time frame, as defined by the life insurer.

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U

Underwriting

The process during which the product supplier determines the level of cover it is prepared to offer, taking into consideration various financial limits based on age, gender, education, occupation, income, current life insurance cover, avocation, personal health status, family health history and insurable interest.

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V

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W

Waiting period

The period after taking out the policy during which time premiums are payable but the policyholder cannot claim certain benefits.

Whole of life

A life insurance benefit that provides cover throughout the entire lifetime of the life assured.

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X

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Y

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Z

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