Additional Benefits/ Discretionary Fund- the Society operates a Discretionary Fund to help members meet dental, optical and other medical expenses. Donors may also claim for educational expenses for the child when they take out a Second Step, Junior Gold Bond or Child Saver Plan policy. Please see our ADDITIONAL BENEFITS page for more information.
(the) Assured – person, or "beneficiary" who will collect the benefits under a life assurance policy
Beneficiary - see "Assured"
Bonus – an amount that is added to the savings element of a “with-profits” life policy. Most common are either:
- Reversionary – paid annually and, once added, cannot be taken away
- Interim – bonus usually announced in-between reversionaries
- Terminal (or "final") – added at policy maturity or other pay-out and governed by the investment performance of the society throughout term of policy
PLEASE NOTE THAT BONUSES ARE NOT GUARANTEED
Cancellation rights – rights granted to investors allowing them time to change their mind about a financial transaction they have entered into. If cancellation is requested within the stipulated period (30 days), the investor should, in most cases, receive a full refund of monies paid.
Discretionary Fund - see 'Additional Benefits'
Endowment policy – life policy which guarantees to pay a fixed amount (plus bonuses, if a "with-profits" policy) on either maturity or earlier death.
Execution Only – term used when customer “buys” a financial services product and does not want or receive advice.
Free Policy - if you cannot continue to pay your premiums you can make your policy a "free policy". This means a value is calculated, based on the premiums already paid, and will stay the same until the original maturity date of your policy. No further bonuses will be added.
Full Face Value - the sum assured together with all accrued bonuses.
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(the) Life(s) Assured – the person(s) on whose life a life assurance policy is based .
Maturity Proceeds – the amount payable when a policy reaches the date on which it matures.
Paid up – state of a life policy when premiums have been discontinued before the agreed term has expired. Can result in the policy continuing to provide a benefit, but at a lower amount.
Premium - this is the amount you agree to pay for your investment. For a regular premium policy this will remain a constant amount throughout the term of the policy. It can be paid monthly, quarterly or annually. For a single premium investment you will agree to pay a "one off" premium. There will be no further premiums payable.
Surrender Penalty - a surrender penalty may be applied if you decide to cash in your policy before its maturity date or a guaranteed exit date.
Surrender Value – value placed on an investment when it is cashed-in earlier than the expected/agreed term.
Tax-free (exempt) – we invest policyholders’ premiums, net of our charges, into a tax exempt fund. This fund pays no tax on its income or capital gains. The exception to this is dividend income received from investments in UK company shares, from which corporation tax at a current rate of 10% is deducted. The policy proceeds you ultimately receive are free of any personal income tax or capital gains tax liability, whatever your marginal rate of tax.
With-profits – life assurance policy type where investment element of policy grows by participation in the investment returns of the Society. Profits usually distributed in form of bonuses (see 'bonuses').
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