Life Insurance
Income Protection

- benefit period
- disability / disabled
- income producing duty
- monthly benefit
- policy expiry date
- waiting period


benefit period
The maximum amount of time that we will pay you benefits for each claim.

disability / disabled
This is the word we use to describe your inability to work due to sickness or injury. Totally disabled is when you can't work at all, and partially disabled is when you can only work in a reduced capacity.

income producing duty
A duty of your occupation that generates 20% or more of your monthly income.

monthly benefit
This is the amount you insure for, that we will pay you if you make a valid claim. You can insure up to 75% of your income from personal exertion (excluding superannuation contributions and business expenses but before tax).

policy expiry date
When you take out a policy you choose how long you want your cover in place - the available choices are until you reach age 60 or age 65. Cover under your policy will cease on the policy expiry date, which is the anniversary of your policy start date before you reach the selected age.

waiting period
This is the amount of time you have to be disabled before you can qualify for any disability benefits. You select your waiting period based on how long you can wait until disability benefits would be payable.

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Life Insurance

Life, TPD and Trauma Insurance

- Accidental Death Cover
- annual premium
- automatic indexation of benefits
- date insured from
- immediate family member
- injury
- insured
- Life Care
- medical practitioner
- nominated beneficiary
- occupation
- policy anniversary date
- premium due date
- qualifying period
- sickness


Accidental Death Cover
Accidental Death Cover is the optional benefit payable on the death of the insured as a result of an accident. The amount of the benefit is that shown in the Policy Schedule together with any increases as a result of automatic indexation of benefits.

annual premium
This is the annual premium specified in the Policy Schedule and includes the premiums for the benefits attached to the policy and the policy fee.

automatic indexation of benefits
Unless otherwise specified, on each policy anniversary date we will index your benefits in line with the movement in the Consumer Price Index.

date insured from
This is the date, shown on the Policy Schedule, from which the policy becomes effective.

immediate family member
An immediate family member includes a spouse, de facto spouse, parent, parent-in-law and a child.

injury
An accidental bodily injury occurring while the policy is in force.

insured
The insured is the person on whose life benefits are payable. The insured’s name appears on the Policy Schedule.

Life Care
Life Care is the benefit payable on the death of the insured. The amount of the benefit is that shown in the Policy Schedule together with any increases as a result of automatic indexation of benefits.

medical practitioner
A legally qualified medical practitioner other than the policy owner, the insured or an immediate family member or business partner of the policy owner or the insured.

nominated beneficiary
A natural person, corporation or trust nominated by you to receive any money payable under the Life Care benefit or Accidental Death Cover Option.

occupation
Occupation means the full-time gainful occupation of the insured immediately prior to Total and Permanent Disablement or Total Disability, as applicable. If the insured has changed his/her occupation within the 12 months immediately prior to suffering the sickness or injury which caused Total and Permanent Disablement or Total Disability, as applicable, then occupation for the purposes of the policy will also include the insured’s former occupation.

policy anniversary date
The date on which the policy’s annual review will take place and from which the premiums are calculated. The policy anniversary date will fall on each anniversary of the date insured from shown in the Policy Schedule.

premium due date
Premiums are payable annually in advance and are due on the date insured from and on each policy anniversary date. Each of these dates is a premium due date. Premiums can also be payable in monthly, quarterly or half-yearly instalments by a method approved by us. If we agree to accept the premium in instalments, the date that an instalment is due to be paid is a premium due date.

qualifying period
The qualifying period is for the Trauma Cover benefit and any increases in it other than by automatic indexation.

sickness
An illness or disease that becomes apparent while the policy is in force.
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Common Underwriting/Medical Terms


Blood lipids
Refers to the ‘good’ and ‘bad’ cholesterol and triglyceride levels in the blood (lipids is a medical term for fats).

CMO
You will hear of underwriting cases being referred to the CMO – the Chief Medical Officer. Difficult or technically complex cases are often discussed with these CMOs who assist the decision-making process by providing expert opinion.

Decline
No cover is provided at all due to the risk being assessed by the underwriters as outside the usual acceptance parameters. Depending on the nature of the condition of concern to the insurer (the adviser should have sufficient field underwriting skills to discern the chances of this) then it may be worth approaching another insurer. In this circumstance you will need to complete the alternative insurer’s application and you must declare that another insurer has declined your application for cover.

Deferral
Cover will not be considered for a set period of time. However application can be made for reconsideration at a later date. For example if high sugar levels are detected in the routine blood test for insurance, an application would be deferred until further investigations had determined the underlying cause.
For example Diabetes.

ECG (electrocardiography)
A non-invasive test of the heart rhythm and the operation of each heart chamber. This test can be an indicator of heart disease or abnormality or a rhythm problem.

ECG – exercise
The difference between an ECG and an exercise ECG is the effect on the client and the location. The client will be required to exert themselves, probably on a treadmill, for several minutes, to test the heart under strain.
Exercise ECGs are generally required at quite large sums insured and where a guaranteed future insurability for business insurance has been applied for.

The result will most likely be sent within a day or two, by the attending doctor direct to the insurer.

Exclusion
Exclusions are used to remove foreseeable events or causes of claim from the cover provided. They return the risk to average. This can be an:

• Exclusion of a claim for death or injury resulting from a certain activity such as skydiving.
• Exclusion of a claim relating to a pre-existing condition. For example, cover for disabilities caused by back pain might be excluded if a person has a history of back trouble, as the potential for further problems is foreseeable.

It is important to remember that the policy will still cover all other disabilities caused by unforeseeable illness or injury.

When an exclusion for a pre-existing condition or involvement in an activity is applied, the premium is not discounted as the exclusion brings the applicant back to a standard risk – it does not reduce the risk of illness or injury from other events.

Fasting
Any test which is listed as ‘fasting’ requires that the client eat nothing after midnight on the night before the test (usually a blood test) is to be undertaken. Small amounts of water are generally permitted. If the test is to be a ‘total’ fast then this will be advised, in which case nothing may be eaten or drunk at all.

FBC
This acronym stands for Full Blood Count and is the common test that is taken when there is a suspicion of an infection or a problem with low or high numbers of blood cells, so it is possible this will be seen on a personal statement or a medical report, as part of a client’s history. This is also a test which may be requested for high sums insured.

Interim Cover.
The client is granted some limited cover from the time the fully completed application form is submitted to the insurer, for a set period, during underwriting. The interim cover terms differ slightly for each company and you should check each PDS to determine what the terms are for each insurer’s product range.

The differences might be in the maximum amounts; the extent of cover (i.e. illness/injury); or the period of time cover is granted. It is also crucial that the correct process is followed so that the cover is triggered, so read the requirements for each insurer and become familiar with them. For example some insurers require that the Interim Cover certificate be signed by the client to validate it.

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Loading
This is an amount in addition to the standard premium that the policyholder is required to pay. This additional amount is applied to take into consideration the increased chance of a claim being made.

For example, a loading may be applied if there is a
history of high blood pressure.

MBA or MBA20
This acronym stands for multiple biochemical analysis and is the common blood test which provides a comprehensive overview of the general health indicators in humans. Most useful are the measures of liver function, blood lipids (fats – the ‘good’ and ‘bad’ cholesterol and triglycerides) and sugar (indicative of diabetes).
The blood needs to be taken from a vein in a small quantity.

Non-cancelable
Life insurance policies are non-cancelable and this sets them apart from other types of insurances. This means:

• Each policy is guaranteed renewable by the insurer, provided the policy owner continues to pay the premium.
• The original acceptance terms are not able to be altered in the future. This means that if an increase is applied for and the increase is loaded, for example, the insurer cannot alter the existing policy by applying a loading to that portion.
• A policy cannot be cancelled for claims experience: so any number of income protection claims could be made and the insurer cannot refuse to renew the policy.
• Terms cannot be altered after a claim, or any number of claims.
• The Insured can alter their smoking status, pastimes, occupation, or sex!! and apply for an improvement in their rates if applicable.
• The insurer, however, cannot alter the existing acceptance and premium terms even if the insured takes up a hazardous pursuit or changes occupation or starts smoking again. (provided they had no intention of doing so when they took out the policy)

P.M.A.R.
Private Medical Attendant’s Report (usually their normal GP) giving the medical history of the client.

The report is sent direct to the insurer from the Doctor and the client will not be aware of its contents unless the doctor chooses to share those with their patient. When the report is received its disclosures will assist the underwriters to determine if they need more medical evidence, so that may not indicate the end of the underwriting process.

Spirometry
A non-invasive medical test of lung capacity and function. The client will basically be blowing into a machine via a mouthpiece and tube, in varying ways and at varying time intervals. If requested, spirometry will be prompted by a history – recent or chronic – of a lung disease or condition. This is a fairly innocuous test and not one the client should be nervous about performing.

Territorial clause
This clause can be used as an underwriting acceptance mechanism on income protection policies. Where a client is not yet a permanent resident of Australia and is being offered cover, certain terms may apply, commonly known as a territorial clause. This clause will be imposed on the policy for a temporary period at the outset of the policy, say two years, at which time it is deemed removed. The clause usually allows the insurer to cease benefit payments if the insured chooses to move from Australia while on claim.
This is different from the normal terms of income protection where there is usually no contractual restriction on location while on claim.

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General Financial Glossary

Glossary of Terms Insurance

Your term not there? If the term you want is not there or you need more information, please email our client service team or phone or contact us directly on 02 9922 3866.

Noall & Co.

Ph: 02 9922 3866 Fax : 02 9922 3411 Mail Us: PO Box 850, North Sydney NSW AUSTRALIA 2059 Visit Us: Level 3, 231 Miller Street North Sydney NSW 2060

Noall & Co Advisors are Authorised Representatives of

Professional Investment Services Pty Ltd (PIS) AFSL 234951 Level 14, Corporate Centre Cnr Bundall Rd & Slatyer Ave Bundall QLD 2147