Life insurance and pensions

Question 1

What is the difference between insurance and assurance?

Answer 1

Insurance is for things that may occur. Assurance is for things that will occur

Question 2

Level term insurance =

Answer 2

The premium remains the same. The pay-out remains the same. The time period is set

Question 3

Decreasing term insurance =

Answer 3

Premium remains the same. The pay-out decreases over time. The time period is set. Premiums are cheaper than a level term as pay-out decreases

Question 4

Mortgage term insurance =

Answer 4

Premium remains the same. The pay-out and time period match the mortgage repayments

Question 5

Convertible term insurance =

Answer 5

A level term which can be changed into an endowment or whole of life without medical underwriting. The premium is set on the age of insured. Higher than a level term

Question 6

Renewable term =

Answer 6

A level term which can be renewed with no underwriting. Higher premium than level term

Question 7

Family Income Benefit =

Answer 7

Covers the income of a family member.
Time period = set
Payout = decreasing. Pays out an income on death rather than lump
Cheaper than level term as pay out decreases every year

Question 8

Increasing term =

Answer 8

Premium is increasing. Level of cover is increasing. Period = set

Question 9

Gift inter vivios

Answer 9

Sum assured is decreasing in line with tax payable on a gift

Question 10

Term 100

Answer 10

Policy that runs until your 100

Question 11

Return of premiums policy

Answer 11

Term is set.
Sum assured is set and paid on death
If the insured survives all premiums are paid back.
Expensive policy similar to endowment

Question 12

Relevant life policy

Answer 12

Set up by an employer for an employee
Pay-out on death of employee under 75
The policy has no surrender value
The money must be paid to the estate or nominated person of insured