Life insurance glossary

At Compare Cover, we're committed to helping you make informed decisions about your life insurance. We know that some life insurance terms can be confusing, which is why we've put together this life insurance glossary to help you cut your way through the jargon. Simply scroll down our alphabetical list of life insurance terms to find the definition you need. Where the life insurance glossary refers to a feature or benefit of the cover it should be noted that not all policies will include every feature or benefit mentioned and the exact definitions of those features and benefits could vary by provider.


Accidental death benefit

A benefit included by some providers that gives you some cover whilst your life insurance application is being underwritten. If available, this means that a payment could be made in the event that the insured person dies as the result of an accident after the life insurance application has been submitted and before the policy has started. Terms & conditions will vary dependent upon the provider.



An individual who is entitled to receive a life insurance payout in the event of the policyholder's death.



A formal request to the life insurance provider for a payout because an insured person has died (for a life insurance claim), or in the event that they have been diagnosed with a specified critical illness (for a critical illness cover claim).

Claims handler

A life insurance provider employee who reviews and processes claims.


The sum of money which the policy will pay out in the event of a claim.

Critical illness cover

A form of insurance whereby if an insured person is diagnosed with a specified critical illness within the term of the policy, the insurance provider will make a payout. Critical illness cover can normally either be bought on its own, or as an additional benefit with standard life insurance. Using Compare Cover you can compare the cost of premiums for life insurance both with and without critical illness cover. For more information, visit our What is critical illness cover? page.


Death benefit

The amount paid out by the life insurance provider in the event of an insured person's death.

Death in service benefits

A benefit that some businesses provide their employees with, which guarantees that, if the employee dies while still employed by the company, the insurance provider will pay a lump sum to the deceased's dependants. For more information, visit our sister company Protect My People and view the guide What is death in service insurance?

Decreasing term life insurance

Also known as 'mortgage protection life insurance', decreasing term life insurance is a type of life insurance in which the amount of cover decreases over time, roughly in line with the amount owed on a standard repayment mortgage. For more information, visit our Mortgage protection life insurance page.


An individual who relies on you for financial support, such as a spouse, partner or child.



The total value of an individual's assets, including all money, land, buildings, homes and personal property.


In trust

By writing a life insurance policy in trust, you ensure that the death benefit is paid into a trust, as opposed to your estate. This means it generally will be paid to your beneficiaries much faster and may not be liable for inheritance tax. For more information, visit our Life insurance and inheritance tax page.

Inheritance tax

A tax that is payable on a deceased individual's estate. For more information about how this affects life insurance visit our Life insurance and inheritance tax page.


Joint life insurance

A type of life insurance in which one policy covers two individuals but is limited to only paying out once, on the first death claim. For more information, visit our How to choose life insurance page.


Level term life insurance

This is a type of life insurance in which the amount of cover remains the same throughout the entire term of the policy. For more information, visit our Level term life insurance page.

Lump sum payment

For life insurance this is a one-off payment, in which the full amount due is paid out in one go.

For critical illness cover, if included, there may be an additional payment dependant upon the provider's terms and conditions.



A contract between the policyholder and the insurance provider containing all the terms and conditions of an insurance arrangement.


The amount that a policyholder must regularly pay to their insurance provider in order to continue cover. Premiums can either be guaranteed (they will not change over the term of the policy) or reviewable (likely to change over the term of the policy). All premiums quoted on Compare Cover are guaranteed.


The legal process in which a will is proven to be valid.


Quote (or quotation)

An estimate of how much an insurance provider will charge you for a particular type of policy and level of cover. Click here to get an online life insurance quote today.Life insurance quotations take into account things like the life insured(s) age, smoker status, health and lifestyle plus the type of policy, policy length and amount of cover required. Insurance companies will ask for detailed medical history before the policy is put in force and may adjust the premium if the health, lifestyle or family history shows a life insured to be a higher risk.


Secondary beneficiary

Also known as 'contingent beneficiary'. A named individual who will receive the payout on a life insurance policy in the event that the primary beneficiary has died.

Single life insurance

A type of life insurance policy in which one policy covers one individual.



The length of time for which a term life insurance policy is in force. The policy will only pay out during the term which is chosen when the policy is taken out.

Term Life Insurance

A type of life insurance in which cover will only last for a specified length of time (or 'term').

Total and permanent disability

A benefit offered by some life insurance providers which will pay out in the event that an insured person, due to sickness or injury, is permanently unable to carry out either the occupation for which they are trained (own occupation) or any occupation.


Waiver of premium

An option that for an extra charge can be added to a life insurance policy. This means that, should an insured person be unable to work due to serious illness, they do not have to pay the policy premium but the policy cover continues. The option is subject to the insurance provider's terms and conditions. Typically, the policyholder has to pay the premiums for three or six months following their absence from work before being eligible to claim the waiver. Cover is generally available until a certain age such as 60 or 65. Waiver of premium may not be available to all life insurance applicants depending on their occupation and health.

Whole of life cover

A type of life insurance where cover only ends when the first or second life insured (dependent upon the type of policy) dies

We hope this life insurance glossary has helped answer any questions you might have.

If you still have anything you're unsure about, take a look at our life insurance guides or, if you're ready, get an online life insurance quote now.


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