Jargon Explained

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    24. X
    25. Y
    26. Z

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    Ab initio

    Definition

    Latin phrase meaning from the beginning.

    Explanation

    Usually used when talking about cancelling an insurance policy.

    Ab initio is often used when talking about an insurance policy that has been cancelled, and the cancellation is back-dated to the start date of the policy.

    A policy is most commonly cancelled ab initio if the policyholder has failed to disclose or has misrepresented some information when the policy was taken out. If the correct information had been given AXA would not have offered a policy.

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    Hold Harmless Agreement

    Definition

    A contractual agreement that specifies that one party to the agreement will protect the other party and possibly others from being held liable in a given situation.

    Explanation

    Used when talking about Public and / or Products Liability insurance.

    The effect of a hold harmless agreement is that the two parties to the agreement agree that one party will not have a legal liability if matters described in the agreement should occur. The other party effectively assumes the whole liability.

    This is a form of contractual liability and may be excluded from Public / Products Liability insurances. When purchasing liability insurance, insurers will want to be told about any agreements that increase the clients liability including any Hold Harmless Agreement. Even if there is no specific exclusion it would be considered by the insurer to be a material fact affecting the cover needed by the client.

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    Accidental Damage cover (AD)

    Definition

    Damage caused to the policyholder's property.

    Explanation

    Used when talking about types of insurance cover.

    Typical examples of accidental damage include things like spilling paint on a carpet, or damage to a car following an accidental collision.

    This term is most commonly used in household or motor policies. 

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    Acute condition

    Definition

    A disease, illness or injury that is likely to respond quickly to treatment which aims to return you to the state of health you were in immediately before suffering the disease, illness or injury or which leads to your full recovery.

    This is a defined term that's agreed by the Association of British Insurers, and commonly used by insurers that provide private medical insurance. 

    Explanation

    Used when talking about types of medical condition.

    Acute has a specific meaning in medical insurance. This reflects the way the term is used in medicine rather than the way it's used in general use where acute tends simply to mean an illness that's 'currently very bad'.

    A medical condition that's acute can become chronic. 

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    Addition of dependent (AOD)

    Definition

    This is when a member wants to add a family member to their plan.

    Explanation

    Used when talking about medical insurance.

    The terms and conditions of a policy will explain more about who counts as a family member (or dependent). Normally, this will be a partner or a spouse, and any unmarried children (including adopted and step-children).

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    Additional Awards

    Definition

    A type of extra compensation an employer may be required to pay an employee.

    Explanation

    Used when talking about Legal Expenses cover and particularly cases of unfair dismissal of employees.

    If an employment tribunal rules that an employer must take an employee back as an employee and the employer doesn't comply with that order, the tribunal may rule that the employer will have to pay Additional Awards.

    This type of award is called an Additional Award because it is additional to any Basic Award or Compensatory Award.

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    Additional Premium (AP)

    Definition

    A premium that's additional to the existing premium.

    Explanation

    Used when talking about insurance premiums.

    Two common examples of when policyholders may have to pay an additional premium are:

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    Aggregate

    Definition

    Aggregate means the total value of two or more items.

    Explanation

    Used when talking about different amounts or values to do with insurance.

    In the context of insurance, aggregate will often be used in connection with an aggregate limit of indemnity, or an aggregate sum insured. Aggregate limit of indemnity often refers to the total amount that will be paid in an annual period of cover, and aggregate sum insured would mean the total sum insured for different covers or insurances that could be paid for any one loss.

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    All Risks

    Definition

    Wider cover than given under a standard property insurance policy.

    Explanation

    Used when talking about types of insurance cover.

    Standard property insurance is based on defined causes of damage.
    All risk covers any loss or damage apart from exclusions as stated in the policy. 

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    Annual percentage rate (APR)

    Definition

    A percentage rate that allows customers to compare the interest rates that are charged on different products.

    Explanation

    Used when talking about the interest rates that apply to financial services products.

    All providers of financial products that charge interest must give the APR interest rate. APR is always worked out using the same formula, which means that it gives customers a way of comparing interest rates from one product to another.

    The APR takes account of different factors such as the interest rate, the period the payments will be made over and certain other fees. 

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    Annual Premium

    Definition

    The premium due for one year's cover.

    Explanation

    Used when talking about insurance premiums.

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    Assessed

    Definition

    This means that AXA PPP healthcare have reviewed a medical insurance claim against the terms of the policy.

    Explanation

    Used when talking about medical insurance claims.

    A claim is assessed or reviewed when received by AXA and a decision is made as to whether the whole claim or part of it is covered for payment under the policy terms. The customer is then informed via a claims benefit statement. 

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    Associate of the Chartered Insurance Institute (ACII)

    Definition

    A professional insurance qualification awarded by the Chartered Insurance Institute.

    An Associate of the Chartered Insurance Institute has successfully completed the Advanced Diploma in Insurance, previously known as the Associateship. 

    Explanation

    Used when talking about professional qualifications in the insurance industry.

    Associate of the Chartered Insurance Institute is a widely recognised qualification in the UK insurance industry.

    The Advanced Diploma in Insurance is the second highest of four available levels of qualifications offered by the Institute. It was previously called the Associateship. 

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    Average condition

    Definition

    A policy condition that requires the amount of a claim payment to be reduced proportionately if the policyholder has not insured his property for the full value or replacement cost.

    Explanation

    Used when talking about claims and under-insurance.

    It has the effect of making the policyholder responsible for an amount of their claim that's proportionate to the amount of under-insurance.

    For example, if Paul and Tracy insure their cottage for £100,000 and the real value is £200,000, they have only insured for 50% of the real value. If they later need to claim for damage worth £10,000, their insurer will only pay them for the proportion of the loss that the insurer has insured – which is 50% or £5,000. 

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    Benefit allowance

    Definition

    The maximum limit that could be paid for all eligible claims for a particular type of benefit in a policy year.

    Explanation

    Used when talking about insurance policy benefits.

    A benefit could be a payment or a service. The benefit allowance (this is also referred to as 'limit') for each benefit sets the limit for the particular type of benefit in a specified period.

    For example, Jason has a medical insurance policy that provides psychiatric treatment as a benefit. The benefit has a benefit limit of £500 per policy year. This means that the most Jason could claim for psychiatric treatment in a policy year would be £500.

    Benefit limits can have different amounts, and they can run over different periods.

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