Life Insurance Terms & Definitions
As an independent researcher, we analyse premiums and research across many different insurance suppliers. Each insurer will use their own terms and definitions to describe their products.
Here at Omnium, we use a set of standard terms that can be found throughout our systems, which may feel familiar depending on your individual background and experiences in the Australian life insurance industry.
This Omnium Glossary aims to help you interpret the life insurance terms used throughout Omnium’s systems and reports.
Important General Life Insurance Terms
PDS (Product Disclosure Statement) – The essential legal document explaining the policy
Duty to Take Reasonable Care – (Replaced “Duty of Disclosure”) The legal obligation for applicants to provide honest information during underwriting
Indexation – The automatic annual increase of cover (and premiums) to keep pace with inflation (CPI).
Loadings – An increase in premium due to a health risk or dangerous occupation (e.g., “smoking loading”).
Exclusions – Specific conditions or activities (like skydiving) that the policy will not cover.
Pre-existing Condition – A health issue present before the policy started; a major “pain point” keyword.
Tele-underwriting – The process of completing a health assessment over the phone rather than via a manual form.
Interim Cover – Temporary protection provided while the insurer is still assessing the full application.
Life Insurance Quote Specific Terms
State – The residential state of the life insured. Premiums will be updated to the appropriate taxation laws of this state.
Premium Structure – The structure for the premiums to follow over time. OmniLife allows the user to opt-in to the changed CALI labels or keep the old label convention.
- Stepped – Premiums will increase every year in line with the age of the insured. Premiums may vary due to sum insured changes including Consumer Price Index (CPI) movements or changes to the underlying premium rates set by the insurer.
- Level to 65 or 70 – Premiums will not increase every year due to age until age 65 or 70. Premiums may vary due to sum insured changes including Consumer Price Index (CPI) movements or changes to the underlying premium rates set by the insurer.
- Variable-age Stepped – Premiums will increase every year in line with the age of the insured. Premiums may vary due to sum insured changes including Consumer Price Index (CPI) movements or changes to the underlying premium rates set by the insurer.
- Variable to age 65 or 70 – Premiums will stay the same until client reaches age 65 or 70 and then will increase every year after. Premiums may vary due to sum insured changes including Consumer Price Index (CPI) movements or changes to the underlying premium rates set by the insurer.
- Blended – Blended begins with Stepped/Variable age-stepped and switches to Level/Variable after a fixed number of years
Life Cover Options
Sum Insured – Protecting the clients future. In the event of death or terminal illness, Life Cover can provide a lump sum benefit.
Ownership – This will filter the products based on the intended ownership structure of Life products.
- Non-Super – The policy will be owned by the life insured or a company.
- SMSF – The policy will be owned by a Self Managed Super Fund.
- Retail Super Fund – The policy will be owned by a Superannuation Fund.
TPD Extension (Linked Cover) – When an illness or injury permanently prevents you from working in your occupation or any occupation, Total and Permanent Disability Cover can provide a lump sum benefit. When TPD cover is added as an extension to Life cover, the two covers are linked, so if a TPD claim is paid this will reduce the Life cover (and any other linked cover
Trauma Extension (Linked Cover) – If you suffer from one of the listed major health events, Trauma Cover can provide you with the financial resources to make lifestyle or career adjustments to help you recover. Trauma can provide a lump sum benefit. When Trauma cover is added as an extension to Life cover, the two covers are linked, so if a Trauma claim is paid this will reduce the Life cover (and any other linked cover).
Total and Permanent Disability Options
Sum Insured – When an illness or injury permanently prevents you from working in your occupation or any occupation, Total and Permanent Disability (TPD) Cover can provide a lump sum benefit.
Ownership – This will filter the products based on the intended ownership structure of TPD products.
- Non-Super – The policy will be owned by the life insured or a company.
- SMSF – The policy will be owned by a Self Managed Super Fund.
- Retail Super Fund – The policy will be owned by a Superannuation Fund.
- Superlink – The policy will be a combination of Non-Super and Super Fund.
Premium Waiver – This allows a choice of having premiums waived when unemployed or totally disabled.
Buy back – This allows a choice of retaining life cover after a payout for TPD.
Double TPD – Double TPD restores your life cover after the TPD event and you will no longer have to pay premiums for the life of the policy, usually up to 65 years old or the plan end date.
Occupation Type – TPD Occupation Type is the level of total and permanent disability that will be used to determine if a benefit is payable.
Pay By Rollover – Paying by rollover involves paying for insurance within superannuation by rolling over the premiums from a super fund.
Trauma Options
Sum Insured – If you suffer from one of the listed major health events, Trauma Cover can provide you with the financial resources to make lifestyle or career adjustments to help you recover. Trauma can provide a lump sum benefit.
Premium Waiver – This allows a choice of having premiums waived when unemployed or totally disabled
Buy back – This allows a choice of retaining life cover after a payout for a Trauma event.
Double Trauma – Double Trauma restores your life cover after the Trauma event and you will no longer have to pay premiums, usually up to 65 years old or the plan end date.
Reinstatement – Trauma Reinstatement restores your Trauma cover after a separate Trauma event.
Baby Care – This option is only available for females. Provides a fixed benefit for pregnancy complications and congenital abnormalities.
Income Protection Options
Monthly Benefit – When illness or injury prevents you from working in your occupation or any occupation, Income Protection Cover supports you by paying a monthly benefit.
Super Contribution Option – The amount of your client’s employer super contribution to cover (a monthly amount)
Ownership – This will filter the products based on the intended ownership structure of Income Protection products.
- Non-Super – The policy will be owned by the life insured or a company.
- SMSF – The policy will be owned by a Self Managed Super Fund.
- Retail Super Fund – The policy will be owned by a Superannuation Fund.
- Superlink – The policy will be a combination of Non-Super and Super Fund.
- SMSF Superlink – The policy will be a combination of Non-Super and a SMSF.
Waitin Period – The waiting period is the length of time you are prepared to wait after disability before benefits are paid. The shorter the waiting period, the higher the costs. Not all waiting periods are available for all products and occupations.
Benefit Period – The benefit period is the length of time you will receive monthly benefits. The longer the waiting period, the higher the costs. Not all waiting periods are available for all products and occupations.
Increasing Claim Benefit – The Increase Claim Benefit increases the monthly benefit by CPI after 12 months of payment.
Accident Benefit – The Accident Benefit is an option where benefits may be paid during the waiting period, provided you are Totally Disabled for a defined period as a result of an accident.
Initial Replacement Ratio – Filter products with specific IP replacement ratios
