Common terms and definitions

Premium
This is the monthly or annual cost of the policy.

Settlor
The term given to the person gifting assets in to a Trust he/she is setting up.

Lapse
This is the term used when a life insurance policy comes to an end due to non payment of the premium. The policy is said to have “lapsed”.

Deferred period
This is the period of time that has to pass before a claim for a benefit can be made. For example, the period of time before a claim for “waiver of premium” or premium protection benefit can be claimed.

Inheritance tax
This is the tax charged on the value of the estate of a deceased person. It is sometimes known as a wealth tax and is charged only on estates over a certain value.

Donor
A person making a gift to another or in to a Trust.

Beneficiary
A person named in a Trust who is entitled to all or a share of the benefits of the Trust.

Close company
A private limited company with 5 directors or less.

Death in service
The term used where an employee dies while working or still in service with the employer. The term is used in connection with a life insurance benefit set up by the employer for the benefit of an employee.

Family Income Benefit
This is a special type of term life insurance plan that provides a regular monthly income in the event of a claim rather than a lump sum. The income is paid for the period of time left on the plan and will then cease with the plan coming to an end without value.