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Glossary

This glossary is intended as a general aid to help you understand some of the commonly occurring phrases and jargon used in the insurance world.  If you have any questions about the use or meaning of a term or expression in any particular product or literature, you should raise them with the provider concerned.

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Beneficiary (pensions)
A person nominated to receive benefits under a pension scheme, or a person who will benefit in certain events such as the death of the pension scheme member or annuitant.
Benefit
Money paid by an insurer when a claim is accepted.
Bid or offer spread
A two-way price quotation that indicates the best price at which a security can be sold and bought at a given point in time. The bid price represents the maximum price that a buyer or buyers are willing to pay. The offer price represents the minimum price that a seller or sellers are willing to receive for the security. The difference between the two is the bid/offer spread. A trade or transaction occurs when the buyer and seller agree on a price for the security.
Bid price
The price that a buyer (bidder) is willing to pay for a good. If you are a member of a unit trust link, this is the price you will get for each unit if you cash in all or part of your investment.
Bond
A written promise to repay a debt at an agreed time, which often includes an agreement to pay an agreed rate of interest on that debt.
Bonus
An added amount or payment on top of what you would usually expect to receive as a result of high levels of performance.
Broker
A person or firm that places its customers’ insurance with an insurer. They can advise customers on the best insurance product to take out depending on their needs. Brokers can also provide other services such as risk management, designing or negotiating contracts, and handling claims. (Also known as an intermediary, agent or adviser).
Business interruption
When business productivity has to stop due to an unplanned event or disaster which affects its profits. Business interruption insurance will normally cover the loss of income specified for a period of time that a business suffers when it has to cease trading as a result of an unplanned event such as a fire.