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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Inception date
This is the date your insurance cover starts.
Income drawdown
This is an option available from some defined contribution pension schemes, which allows you to take an income directly from your pension fund rather than using it to buy an annuity. Your pension fund remains invested and so is subject to investment risks and returns. The amount of income you can take is subject to minimum and maximum limits which are set by the government and reviewed periodically. The income you receive is taxable. (Also called income withdrawal).
Income tax
This is tax you pay on money you earn, such as your salary or interest on savings or rent paid to you.
Increasing term
A term insurance policy in which the cover goes up every year by a fixed amount. This policy is designed to increase the policyholder’s life cover as their earnings or debt increase. (Also known as increasing cover).
Indemnity
This is when someone promises to pay for loss or damage they cause someone else.
Independent financial adviser
A qualified person or firm that can give you independent advice on life insurance, pensions and other investment products.  They are not tied to a particular company and must be able to advise on products across the market.

 

Index-linked
If something (for example, government bonds or pension funds) is linked to an index, then it means changes are made in proportion to the changes in the relevant index, such the retail price index or other measures of living such as interest rates or wages.
Individual policy
Cover for an individual person as opposed to a couple or a family.
Individual savings account
A type of savings account that allows individuals to save a certain amount each year tax free.
Inflation
This is the percentage change in the cost of living over time, measured through the Consumer Prices Index (CPI) or Retail Prices Index (RPI). As prices rise, the value of money falls.
Insolvency
A lack of financial resources to pay back debts.
Insolvent
When a person or organisation owes money but cannot pay it.
Insurable interest
The interest that a person has in something such as a particular property or another individual, which means that the person would suffer a loss should that property or individual be harmed. In insurance law, you can only buy insurance for something or someone in which you have an insurable interest.
Insurance
Insurance is a financial product sold by insurance companies to safeguard individuals, organisations and / or their property against the risk of loss, damage or theft (such as flooding, burglary or accidents). When you buy a policy you make regular payments, known as premiums, to the insurer. If you make a claim your insurer will pay out for the loss that is covered under the policy.
Insurance company
A company that creates insurance products to take on risks in return for the payment of premiums. Companies may be mutual (owned by a group of policyholders) or proprietary (owned by shareholders). (Also known as insurer or provider).
Insured
The person who the insurance covers. (Also known as policyholder).
Insured turnover
Insurance covering how much a company makes over a set time frame, on average
Insurer
See insurance company
Intangible assets
Assets that have no physical form, such as patent rights.
Intellectual property rights
The general name given to rights such as copyrights and patents.
Intermediary
Any person or firm that sells insurance but is not an insurance company themselves. This can include brokers, independent financial advisers, banks, comparison websites and trade unions
Intestate or intestacy
When someone dies without leaving a will. The estate is divided up by government following the rules set out by law.
Investment
An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth.
Investment income
Income coming from interest payments, dividends, capital gains collected on the sale of a security or other assets, and any other profit that is made through an investment vehicle of any kind.
Investment-linked annuity
An annuity where the retirement income you receive is linked to investments (such as stocks and shares). Your pension income may vary to reflect the changes in the value of investments.
Investment trust
A limited company whose business is the investment of shareholders' funds, the shares being traded like those of any other public company.
Irrecoverable loss
A loss or damage that cannot be recovered, repaired or retrieved.