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.
- PAYE - Pay as you earn
- An employer automatically takes Income Tax and National Insurance contributions from your salary and pays it to HM Revenue and Customs (HMRC).
- Pecuniary loss
- Loss of money.
- Pension
- This is a tax-efficient way to save money for when you have retired, or for later life when you are no longer able to earn.
- Pension benefits
- The sums of money you get from your pension schemes.
- Peril
- A peril is the cause of damage, such as earthquakes, flooding, storm or fire.
- Permanent health insurance
- Pays out an income if you, as the policyholder, suffer from a long-term illness or disability and have a loss of income. (Also known as income protection insurance).
- Personal accident
- A policy that will cover you for accidental death or a specified injury.
- Personal lines
- This refers to any insurance policy taken out by an individual in a private capacity as opposed to for business or professional use.
- Personal money
- All of your financial income and outgoing transactions including what you earn, what you spend, what you save, and your assets and liabilities.
- Phased retirement
- You can draw benefits from your pension gradually, either through annuities or drawdown. Part of the income is provided as tax-free cash, so the level of income tax paid is managed and the balance of your fund is invested in a tax-efficient way. Speak to a financial adviser for more information about phased retirement.
- Policy
- The insurance cover as agreed between the insurance company and customer.
- Policy schedule
- This is an outline of the cover provided under a policy. It will show details of the policyholder and the kind of cover given.
- Policyholder
- The person or organisation that is taking out an insurance policy (and paying the premiums).
- Pool re
- A government-backed company that meets the cost of business property claims over £100,000 resulting from terrorist attacks in Great Britain.
- Pre-existing medical condition
- Any health condition you have now or had in the past; have been diagnosed with or are waiting for a diagnosis of; have been treated for or are having treatment for before the start date of any health insurance or income replacement insurance cover.
- Premium
- The amount to be paid by a customer for an agreed amount of insurance cover.
- Product liability policy
- Product liability insurance covers the cost of compensating anyone who is injured by a faulty product that a business designs, manufactures or supplies.
- Profit and loss account
- This information shows the money a business has earned minus any cost or spending.
- Property
- Generally refers to the buildings (including roof, walls, windows and permanent fixtures such as fitted kitchen units, bathroom suites and fitted wardrobes) as well as the surrounding grounds (including driveways, patios, conservatories and outbuildings).
- Proposal form
- An application for insurance cover.
- Proposer
- The person who is applying for cover.
- Public liability
- Public liability insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business activities. Public liability insurance covers the cost of compensation for personal injuries, loss of or damage to property, and death.
- Purchased life annuity
- An annuity that provides a regular income in exchange for a lump sum, but which is not bought directly with money from a pension.