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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Eligible capital

The type of financial resources held by insurance companies that they are allowed to use in order to meet their regulatory capital requirement.

Types of eligible capital (for example shareholders equity and subordinated debt) are determined by rules such as the European Union’s Solvency II Directive. These rules are written by financial regulators.
Endowment
An income or lump sum of money bequeathed or left to a beneficiary or loved one after you die.
Endowment policy
A life insurance policy linked to a with-profits fund that pays out a sum of money after an agreed period of time or when you die, whichever comes first.
Enhanced annuity
A type of annuity that may pay you a higher regular retirement income if your life expectancy is shortened because of your lifestyle (for example if you smoke) or your medical history. For this type of annuity the annuity provider will normally ask for a medical questionnaire to be completed and a report from your doctor. (Also called impaired annuity).
Escalating annuity
An option for your retirement income to increase in line with an inflation index, or to increase at an agreed fixed rate each year. (Also known as index-linked annuity or inflation-linked annuity).
Escalation benefit
Where premiums and benefits rise every year by an agreed amount.
Evidence of insurability
This is evidence to show if you are an acceptable candidate for insurance. It can involve looking at your health, age, job and other factors.
Excess
This is the first amount of any insurance claim that the customer agrees to pay as part of the policy conditions – the insurer pays the rest.
Exclusion
A risk or item specifically not covered by a policy.
Ex-gratia payment
Any payment made by an insurance company that is outside the terms of the policy.
Export credit insurance
A policy providing cover for exporters’ losses arising from non-payment.

 

Exposure
The potential costs of an insured event, such as a flood, to an insurer.
Extended warranty
A policy that allows the manufacturer’s warranty on a product to be extended for a further period of time.