Glossary of Terms

Career Average Revalued Earnings (CARE) schemes

These are a type of defined benefit pension scheme that are offered by employers. The benefits at retirement are based on your earnings and length of membership of the scheme.

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Free Cover Limit

A free cover limit is also known as the 'Free cover level' or 'No evidence limit'. A free cover limit or the no evidence limit is the amount of cover that each individual policy member within a Group Life Assurance, Group Income Protection or Group Critical Illness policy can have without any requirement of medical evidence or underwriting.

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Free Cover Limit

A free cover limit is also known as the 'Free cover level' or 'No evidence limit'. A free cover limit or the no evidence limit is the amount of cover that each individual policy member within a Group Life Assurance, Group Income Protection or Group Critical Illness policy can have without any requirement of medical evidence or underwriting.

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ISAs & Taxation

Any and all proceeds from ISAs are exempt from both income and capital gains tax. On death, however, your ISA will form part of your estate and therefore be liable to inheritance tax if your estate exceeds the nil rate band. When you die, if you're married or in a civil partnership, your partner will get a one-off increase in their ISA allowance for that year equivalent to what you had in all ISAs combined, known as an Additional Permitted Subscription (APS), this is calculated regardless of any IHT liability.

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Life Assurance

This is a type of insurance that pays out a pre-determined lump sum on the death of the insured person. Group Life Assurance is often part of a company’s Employee Benefits offering and is typically based on a multiple of an employee’s salary.

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Medical Underwriting

Medical underwriting is a health insurance term referring to the use of medical or health information in the evaluation of an applicant for coverage, typically for life or health insurance.

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National Insurance Contributions

National Insurance (NI) contributions are an amount of money that’s paid to the Government a percentage of your income if you are aged over 16 but under the state pension age and you earn more than the minimum threshold. They go towards providing for state pensions, as well as other state-provided benefits. If you are an employee, NI is deducted from your pay before it is paid to you.

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Private Medical Insurance

PMI is an insurance policy designed to meet some or all of the costs of private medical treatment. It is also known as private health insurance. PMI policies are designed to meet the costs of having private medical treatment for an acute illness or injury on a short-term basis. PMI cover is commonly part of a company's Employee Benefits offering.

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Qualifying Workplace Pension Scheme

A company pension scheme must be a qualifying pension scheme to meet the requirements of automatic enrolment. It must also meet the minimum levels of contributions or allow benefits to build up at least at a minimum rate. Qualifying schemes may be either defined benefit schemes or defined contribution (money purchase) schemes. Employers have different options available to them when selecting a suitable qualifying workplace pension scheme.

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State Pension

Your basic State Pension is based on your National Insurance contributions. You may also qualify for the additional State Second Pension if you are employed, based on your earnings and National Insurance contributions.

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Whole-of-life Assurance

A whole-of-life assurance policy lasts throughout your life so that your dependents are guaranteed a payout should you die as long as the premiums are kept up.

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