Glossary of our commonly used words

Accelerated Specified Illness Benefit

A lump sum that is paid if you are diagnosed with one of the specified illnesses covered by your plan during the policy term. This payment is deducted from your life cover, so your remaining life cover benefit will be reduced by the amount paid for the specified illness.

Additional Voluntary Contributions (AVC)

An extra payment you can make into your pension plan on top of your regular contributions.

Allocation

How premiums (also known as contributions or payments) are distributed into selected funds within your policy. Usually the amount invested / allocated is less than the premium paid, as charges may apply, which are deducted from the premium before it’s invested / allocated.

Annual statement

A summary of your policy details is issued every year. It summarises key information about your policy, such as its current value (if applicable), payments made, charges, performance (if relevant), and any important changes during the period.

Annuity

A regular income payable (usually monthly) for as long as you live that you get in exchange for your pension savings when you decide to retire.

Annuity rate

The percentage that tells you how much income you’ll get for every €100 you use to purchase an annuity.

Approved Retirement Fund (ARF)

A retirement product that allows you to invest pension money after retirement and take a flexible income.

Back to Work Benefit

Payments made when you return to work after receiving income protection benefit for a year or more. This benefit is designed to help you with your finances.

Benefit

A payment or other value you receive from your policy, such as a lump sum or regular income.

Capital units

Capital units are bought with early premiums that carry higher charges. These higher charges are used to recover the initial costs of setting up and administering the policy. The units are invested in your chosen fund and move up or down with its value.

Chargeable tax events

Events like a withdrawal (encashment) or death that trigger a tax liability on any investment gains made. This applies to relevant life assurance policies.

Chargeable excess

The amount over a certain limit that is taxable. For more information on this amount you can search for “Chargeable Excess Tax” on www.revenue.com.

Charges

Fees and expenses deducted from your premiums or policy value.

Children’s Protection Benefit

The collective term for two benefits: Children’s Lump Sum on Death Benefit and Children’s Accelerated Specified Illness Benefit.

Claim

A request you make (or someone else makes on your behalf) to us for payment under your policy when an insured event happens (for example, the death of a life assured or diagnosis of a specified illness, if covered on your policy).

Confirmed income option

An option to confirm your income before taking out income protection cover. If you make a claim later, your income protection payments will be based on this confirmed amount, even if your income falls during the term of your plan.

Contributions

The money you pay into your plan.

Cooling-off period

A set period of time you have, after your policy starts, to cancel it and get a refund of your regular premium paid. This period is usually 30 days from the date your policy is issued.

Cost of cover

The amount you pay to provide the protection benefits under your policy.

Cover

The protection benefits provided under your policy. For example, life cover pays a lump sum if you die during the term, and income protection cover pays part of your income if you can’t work because of illness or injury.

Death Benefit

A lump sum payment upon death to your nominated beneficiaries or estate.

Death in Service Benefit

A lump sum and / or pension paid to a member’s dependant/s if the company pension scheme member dies while employed.

Default investment strategy

A pre-selected investment approach if you, as a member of a company pension scheme, do not choose your own investment funds.

Defined Contribution (DC) pension scheme

A retirement plan where the contributions payable are defined, and benefits at retirement depend on investment performance.

Dependant

A person who relies on someone, usually a family member, for financial support.

Dependant’s pension

An option for a pension to be paid to a dependant if a member of a company pension scheme dies while still in service. A Children’s pension may be paid to the children of a deceased pension scheme member as part of their Death in Service plan where that type of benefit has been selected.

Disability Benefit

Provides a replacement income if you cannot work due to illness or injury, plus support and rehabilitation services.

Dual life policy

A policy that covers two people separately, paying out on each claim for the benefits included in the policy if an “insured event” happens.

Early encashment charges

Fees applied if you surrender, withdraw, or transfer your policy within the first five years of the policy start date or latest premium paid (depending on the product type).

Encashment

Withdrawing part or all of your policy value.

Enhanced annuity

A higher annuity rate offered at retirement based on certain health conditions, subject to completing a health questionnaire.

Escalation

An option to have annuity income payments increase each year at a fixed rate or in line with inflation.

Essential Activities Benefit

Cover if you become unemployed, paying a smaller amount for severe disability.

Euro cost averaging

A way to invest regularly by putting in a fixed amount of money (for example, €100 each month), no matter the price at the time. It helps smooth out market ups and downs and can lower the average price you pay over time. You’ll buy more units when prices are low and fewer when prices are high, which reduces the risk of trying to ‘time the market’.

Exclusions

Specific situations, events, or conditions listed in your policy where the insurer will not pay a claim.

Executive pension term assurance

A Revenue-approved plan set up by an employer under trust to provide death-in-service (life cover) benefits for an employee.

Executive retirement plan

An occupational pension scheme set up by an employer under trust to provide retirement benefits for a company director or employee.

Exit tax

A tax (currently 38% for individuals) on gains, such as investment growth, from life assurance investment policies

Extra allocation

Extra allocation means we invest more than the premium/contribution that was paid into your chosen fund. It increases the amount going into your policy at certain times, depending on the product terms.

Fixed interest security

A financial term for a paper asset, usually a share in a company.

Fund

A collective investment managed by a fund manager.

Fund selection

Choosing from a range of investment funds available through your policy. Funds can have different risk / return profiles. It’s important to get advice from your Financial Advisor on the right fund for you.

Fund switch

Moving money from one investment fund to another, which there can sometimes be a charge for, and depending on the fund, restrictions on exiting.

Fund value

The current total amount your investment or pension fund is worth, based on how it has performed over time.

FutureSave / Target Saver

A life assurance savings policy suitable for medium to long-term investing.

Government levy

A charge (currently 1%) applied to all life assurance premiums.

Gross policy value

The value of your policy before tax and any early encashment charges (if applicable).

Group retirement plan

An occupational pension plan set up by an employer under trust to provide retirement and/or death benefits for employees.

Group risk

Employer-provided cover that includes Death in Service (life cover) and Disability Benefits (income protection) for employees.

Guaranteed insurability option

Allows you to increase your cover every 3 years without providing health information. Terms and Conditions apply, which you can find more information on in your policy conditions, where relevant.

Guaranteed period

A period (5 or 10 years) during which annuity income continues to be paid to your estate even if you die. This is an option you can select when buying an annuity at retirement.

Higher rate tax

The rate of income tax (currently 40%) that applies where earnings exceed a stated threshold.

High-risk investment strategy

A way of investing for potentially higher returns that comes with higher chances of losing money.

Hospital Cash Benefit

Pays a daily amount if you’re in hospital for more than a stated time (usually 3 days).

Immediate family

Your closest relatives; usually your spouse or partner, children, parents, and siblings.

Imputed withdrawal / distribution

A mandatory annual withdrawal for tax purposes, starting from age 60 for the full tax year. This only applies to Approved Retirement Funds and Vested PRSAs.

Income protection

Insurance that pays you a monthly income if you can’t work due to illness or injury.

Increasing cover

An option to increase regular premiums and cover each year at a fixed rate or in line with inflation.

Indexation

An option to increase regular premiums and / or cover each year at a fixed rate or in line with inflation.

Inflation

The rate of increase in the cost of living, usually quoted as an annual percentage by comparing the average price this month with that of the same month a year earlier.

Interest rate

The percentage return earned on money you save or invest, representing how much your savings will grow over time, based on the rate applied.

Intermediary/sales remuneration

Payment to a Broker or Financial Advisor for arranging or selling a financial product or the services they provide to you as a consumer, usually as commission or fees.

Investment policy

A life assurance policy, plan or contract that outlines how your money will be invested, usually based on your goals, investment risk level, and time frame. Investment policies are more suitable for medium to long term investments.

Investment return

The growth (or loss) in the value of the fund or policy you have invested in.

Joint life policy

A policy that covers two people together, paying out only once on the first claim under the benefits included in the policy.

Key Information Document (KID)

A standardised document outlining key features, risks, costs and potential returns of an investment product to help you make an informed decision.

Level premium option

The premium you pay stays the same and does not automatically increase each year.

Life insurance policy

An agreement that provides financial cover for a set period (called the term). It can be for different types of cover, such as life cover, specified illness cover, or income protection, and may also offer extra benefits.

Life assurance tax

Applies to gains or payouts from a life insurance investment policy when it ends or is cashed in (often called ‘exit tax’ and is currently 38% on any investment gains).

Life choice home

A policy designed to pay a lump sum if a claim is made. The payment is intended to clear an outstanding mortgage. The amount of the benefit decreases every month over the term of the policy. In other words, it is designed to reduce as your outstanding mortgage balance reduces.

Life Cover Benefit

A Lump Sum payment upon death to your nominated beneficiaries or estate.

Life events option

An option that allows you to increase your benefits in certain situations (e.g. marriage, new child) without providing health information.

Life Insured

The person (or people) covered by the policy for the benefits included in the plan.

Low-risk investment strategy

A way of investing that focuses on protecting your money with lower chances of loss, but also lower potential investment growth.

Loyalty bonus

An extra payment or reward given for keeping your investment/policy, or continuously paying your regular premium for a set period.

Lump Sum on Death (Payment)

A one-time payment made upon your death if you die during the policy term.

Master Trust

A single trust arrangement allowing multiple employers to participate, while keeping individual plans separate.

Maximum funding check

A check that must be done to make sure that the pension fund you have, and/or the pension contributions you want to make, are within the limits allowed by Revenue based on the time you have worked with, and the income you are paid from, your employer.

Medical free conversion

An option to extend cover or take out a new policy without providing health information; available until a certain age.

Milestone amount

A limit set by you on some savings plans that triggers a certain amount to move to the Milestone fund.

Milestone feature

An option on some savings plans that automatically moves a set amount into a less volatile fund when savings reach a chosen milestone.

Milestone fund

A more stable fund that your Milestone amount moves to once you reach your Milestone amount (or multiple of).

Minimum recommended investment period

A recommended timeframe to reduce short-term market volatility risk for investment funds.

Mortgage Protection

Insurance that pays a lump sum which is intended to go towards repaying your mortgage if you die during the policy term. Some policies may also include other benefits.

Normal retirement age

The age at which pension benefits normally become payable under the employment terms.

Overlap

Lets you choose when a dependant’s pension begins. If selected, the dependant’s payments will start right after the main person passes away, even if there’s time left on the guaranteed payment period. Any remaining guaranteed payments will also continue until the end of the guarantee period.

Pension

A long-term savings plan set up by an individual to provide retirement benefits.

Pension adjustment order

A legal order that divides pension benefits between spouses or civil partners after a separation or divorce.

Personal Retirement Savings Account (PRSA)

A long-term savings plan set up by an individual to provide retirement benefits. Anyone can take out a PRSA.

Personal Retirement Plan

A type of policy usually set up by a self employed person to provide retirement benefits, also called a Personal Pension or a Retirement Annuity Contract (RAC).

Plan rules

The governing rules of an occupational pension scheme, alongside policy conditions.

Premium skip

Option to skip monthly premiums.

Protection policy

A legal contract between you and the insurer that provides cover for one or more people under the benefits included in the plan.

Policy anniversary

The date that marks one year after your policy start date, and every year after that.

Policy changes

Adjustments we may make to the policy terms to reflect changes, such as changes in taxation or legislation.

Policy conditions

The detailed terms and rules that apply to your policy, including what’s covered, what’s not, and how claims work. It’s important to keep your policy conditions in a safe place so you can refer to them.

Policy review date

For certain Protection plans, at the policy review date, we look to see if the premium you’re paying is enough to keep the level of cover you have in place until the next review date. Reviews are usually every 5 years but may be more frequent as you get older. The result may be that you need to increase the premium you are paying to keep the same level of cover, or reduce the level of cover you have if you don’t want to increase your premium payments. The cost of life cover increases as you get older, so the cost of keeping the same level of cover may increase substantially as time passes.

Policy Schedule

A document that forms part of your policy, summarising the key details such as the cover, term, benefits, sums insured, premiums and any special conditions.

Policy Start Date

The date your policy begins and cover starts.

Policy Term

The length of time your policy lasts, starting from the policy start date.

Policy Value

The current worth or value of your policy, where there is an investment fund.

Policyholder

The person who owns the policy and is responsible for keeping it in force, such as paying the premiums where applicable.

Premium holiday

An option that allows you to take a break from paying your premiums for a period of time.

Premium protection

An option that covers your pension contributions if the member becomes unable to work due to illness or injury.

Premium/contribution

The amount paid into a policy.

Projected expenses and charges

Charges that are deducted from your policy to cover the insurer’s cost of managing the policy.

Regular income

An option to regularly withdraw an amount from your policy.

Regular investment premium

A fixed amount paid at set intervals (e.g., monthly or annually) to keep an insurance or investment policy active.

Rehabilitation services

Support provided to help you recover and return to work after illness or injury.

Reinstatement

An option to restart a policy that has ended because premiums were not paid, subject to certain conditions. It may not always be possible to reinstate a policy where premiums have stopped being paid.

Replacement income

Income paid if you, as an employee, cannot work due to illness or injury.

Retirement lump sum

A one-time payment available at retirement.

Return

The growth (or loss) in the value of a fund. Investment values can fall as well as rise and returns are not guaranteed.

Revenue approved plan

A pension or retirement plan that meets Irish Revenue requirements to qualify for attractive tax relief .

Reviewable policy

For certain Protection plans, at the policy review date, we look to see if the premium you’re paying is enough to keep the level of cover you have in place until the next review date. Reviews are usually every 5 years but may be more frequent as you get older. The result may be that you need to increase the premium you are paying to keep the same level of cover, or reduce the level of cover you have if you don’t want to increase your premium payments. The cost of life cover increases as you get older, so the cost of keeping the same level of cover may increase substantially as time passes.

Risk profile

How much risk you’re willing to take with investments in return for potential investment returns.

Single investment premium

The amount of a Single Premium allocated for investment in the policy, including any investment bonus given at the time a Single Premium is paid. Any charges payable may also be deducted from the Single Premium before it is invested.

Smart Funds

A lump sum investment product offering access to a range of funds with varying risk levels.

Special terms

Specific conditions or rules that apply to a policy which differ from the standard terms.

Specified illness

A serious medical condition listed in your policy that triggers a lump sum payment if you’re diagnosed with it during the policy term.

Specified Illness Benefit

A lump sum payment if you’re diagnosed with one of the illnesses listed in your policy. For more details, see Accelerated Specified Illness Benefit and Standalone Specified Illness Benefit.

Standalone Specified Illness Benefit

A lump sum paid if you’re diagnosed with one of the covered specified illnesses during the policy term (paid in addition to the life cover, a separate lump sum if you’re diagnosed with a covered illness).

Standard Fund Threshold (SFT)

The maximum amount you can save in pension funds over your lifetime without paying extra tax.

Standard remuneration

The usual or agreed payment to a Broker or Financial Advisor for arranging or selling a financial product, usually as commission or fees.

Surrender

Ending a policy or investment and taking its cash value (where it has one).

Surrender value

The money paid when an insurance policy is cancelled or cashed in. Some plans do not have a surrender value.

Tax-free Lump Sum

An amount that may be taken tax-free from your pension at retirement. There are Revenue limits and conditions that apply.

Target feature

An option on some savings plans that automatically moves your savings into a less volatile fund when a specified overall savings goal is reached.

Target amount

An amount of money you set that, when reached, allows you to switch your money to a more stable fund of your choice, i.e. a Target fund.

Target fund

A more stable fund that your Target amount moves to once it’s reached.

Terms & Conditions

The Terms and Conditions that make up the contract between a company and its customers. For example, they set out the rights, responsibilities, and obligations of both you and New Ireland in relation to the product or service you choose. We have sets of Terms and Conditions for our different products, such as life assurance policies, pension plans and investment products.

Tax on annuity income

Income tax and other applicable taxes on annuity payments, deducted at source.

Tax on withdrawals

For some policies, withdrawals and income payments are subject to income tax, USC, and PRSI.

Tax relief

A reduction in the amount of tax you pay.

Trustee

A person or company that looks after money or assets for someone else. They must follow the rules set out in the trust or policy, and make decisions that are in the best interests of the people who will benefit.

Terminal Illness Benefit

A lump sum payment if you’re diagnosed with a terminal illness during the policy term, as defined in your policy.

Underwriting

The process an insurer uses to assess your application and decide whether to accept it, and on what terms. This can include reviewing details such as your health, lifestyle, and financial information.

Unit price

The value of a single share in an investment fund, used to calculate how much your investment is worth.

Vested PRSA (Personal Retirement Savings Account)

A Personal Retirement Savings Account that continues after retirement, allowing flexible access to funds.

Waiting Period / Deferred Period

The time you must wait after an illness or injury before certain benefits can be paid, like income protection cover.