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.