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UK Insurance directory  - Insurance Glossary N-Z

Mortgage Protection Glossary


Named (or Specified) Perils  ::               

The insurance policy will cover these listed events.

Negative Amortization  ::        

This occurs when there is not enough payments being made to cover the loan and the end result is a shortfall.

Negative equity ::

This occurs when there is not enough payments being made to cover the loan and the end result is a shortfall.

Net  ::      

This refers to the payment of an amount of money excluding tax.

Net Premium  ::       

This refers to the payment of the premium less any expenses such as the agents fee.

New for Old  ::       

This is normally part of content insurance policy and covers the replacement of items at their full value in the case of a claim.

NHBC guarantee ::

This is provided by the National House Building Council for a period of ten years within which the contractor will remedy certain defects which occur under the terms of the guarantee.

Nominal Balance ::  

Refers to a small amount of money left in a account at the end of term.

Non-Status Loan ::

This type of loan involves the borrower having either a adverse credit history or where the income has not been disclosed.

Normal Occupation ::              

This represents your skills and qualifications to carry out particular work in order to receive a salary or wage.

Normal Pregnancy and Childbirth Related Conditions ::         

These conditions are normally minor and they do not effect the mother or child significantly.

Notification Date ::  

Your employer will arrange for you to be made unemployed by a particular date stated in your leaving letter and does not require your skills anymore.

 

Offer of advance ::                

This represents the formal offer of a mortgage or loan by the bank or building society.

Overhanging lock in ::            

The mortgage lender will have offered a discounted mortgage initially and impose penalties at the end of the special period, if you move to another lender.

Overpayment  ::     

This represents the additional payments made by the mortgagee to reduce the amount outstanding.

Overpayment Reserve ::        

This the amount of money paid in a period which represents in aggregate overpayments above the normal payments.

Overpayments ::    

This represents the additional payments made by the mortgagee to reduce the amount outstanding.

 

Paid Up ::                

This refers to a policy which has no further outstanding payments required for it.

Para-Med Screening ::           

This is type of medical examination conducted by a nurse.

Partnership  ::         

Where a number of people join together to run a business for profit or loss such as a partnership.

Payment Holiday  ::

This facility is normally offered as part of a flexible mortgage where the borrower  does not pay the loan payments for a short period of time.

Payment Protection ::             

In the case of unemployment, sickness or an accident this policy will pay the regular instalments depending upon the policy terms.

Payment Protection Insurance ::            

In the case of unemployment, sickness or an accident this policy will pay the regular instalments depending upon the policy terms.

Payment/s ::           

This represents the amount you have to pay the lender every month.

Penalties ::              

The mortgage company may charge you a leaving fee, if you decide to move to another lender.

Pension Mortgage  ::              

This type of mortgage involves the payment of instalments from the borrowers personal pension scheme.

Peril  ::    

This is an event which is the cause of the loss.

Permanently Retire ::              

This represents a point in time from which you will no longer be working since you have reached the retirement age.

PMA ::     

Know as the Private Medical Attendant's Report, which is normally completed by the borrowers doctor.

Policy  ::  

This an insurance policy document which fully details all matters which will effect the policy.

Policy Schedule ::   

This an insurance policy document which fully details all matters which will effect the policy.

Power of Attorney  ::             

This document lets one person act for another.

Pre-Existing Condition  ::        

This refers to medical conditions which apply to the borrower known before the taking up of the loan or mortgage.

Pre-Existing Medical Condition  ::           

This refers to medical conditions which apply to the borrower known before the taking up of the loan or mortgage.

Premium  ::              

This refers to the price of an insurance policy for a given period for the risks covered under the policy terms.

Premium ::               

This refers to the price of an insurance policy for a given period for the risks covered under the policy terms.

Premiums ::             

This refers to the price of a insurance policy for a given period for the risks covered under the policy terms.

Prepayment Privilege  ::          

The terms of the mortgage allows the borrower to pay instalments before the due date of the monthly payment.

Principal  ::              

This the amount of money still left to be paid on the loan.

Private Mortgage Insurance (PMI)  ::      

This is required normally when there is insufficient down payment.

Product ::                

This represents the current mortgage package.

Product Type Term ::              

This type of policy only compensates for major injury or death in the period specified.

Professional Indemnity Insurance (PI) ::

This type of policy covers events such as negligence or wrong professional advise, which can result in an action in the courts.

Property Insurance ::             

This type of policy can cover either buildings or content or both under one policy.

Public Liability ::      

This type of policy covers damage to third party property or death or injury to a third party.

 

Qualifying Period ::

When you take up a new policy there is a period within which no benefit will be paid.

 

Redemption ::         

This occurs when the mortgage has been fully paid and therefore the account can be closed.

Redemption Administration Fee ::          

A fee will be levied by the lender on the closure of the mortgage when it is fully paid up.

Redemption penalty / Early Pay Off Charges ::      

The property owner may be charged a fee by the lender, if the borrower leaves after a special mortgage low interest term ends.

Refinance  ::           

The property owner may settle one mortgage and obtain a more favourable mortgage using the same property as security.

Refund / Drawdown or Borrowback ::  

This presents the case of returning overpaid monies.

Regular Medical Treatment  ::

This means that you are receiving medical or other treatment from a specialist of doctor.

Regular Outgoings ::              

Some policies can cover for other mortgage or outgoing expenses to a certain limit.

Reinsurance ::        

The insurance company may obtain insurance to protect its own interest.

Remortgage ::         

The property owner may settle one mortgage and obtain a more favourable mortgage using the same property as security.

Remortgaging  ::     

The property owner may settle one mortgage and obtain a more favourable mortgage using the same property as security.

Renewal  ::             

This means that the policy terms continue after paying another instalment of debt.

Rental Agreement  ::              

If you live in rented accommodation, your landlord will prepare a document for you to sign indicating the conditions of renting.

Rental Payments ::

This is an amount of money stated in your rental agreement with your landlord which you have to pay monthly.

Repayment ::          

This occurs when the mortgage has been fully paid and therefore the account can be closed.

Repayment mortgage ::

This is a type of mortgage which involves the payment of interest and capital, so that at the end of the term the mortgage is paid fully.

Repayment Vehicle  ::            

For an interest only mortgage, there will be another means of paying the capital at the end of the term such as an endowment policy.

Replacement Cost ::               

If the property gets damaged, this will be amount needed to pay for making good damages to a maximum amount of the sum insured.

Rescission  ::         

This represents the termination of the mortgage or loan contract.

Reserve  ::             

These are amounts of money kept by the insurer for amounts involved in a notification of claim made by the policy holder.

Retention ::             

When the lender holds money back from the mortgage until repairs are completed.

 

Salary ::  

This represents the average salary received over a 12 month period from your employer or as an income and for those who have joint mortgages their combined income.

Second Mortgage  ::               

The property owner may already have a mortgage and require an additional mortgage; for example, to buy another property.

Secured Loan  ::

This a type of borrowing from a lender that uses the purchaser's property as security for non-payment of the mortgage or loan and whereby the lender can sell the property to recover its costs.

Security ::

The lender has a right to the sell the purchaser's property for non-payment of the mortgage or loan; as the lender has secured the property against the loan amount.

Self certification  ::

The borrower may state its income without reference to proof or having accounts for more than three years and the lender will adjust the interest to be charged accordingly.

Self-Employed/Self Employment ::          

This means that you are working for yourself as a sole trader or partner or a director.

SERPs  ::                

This represents the State Earnings Related Pension.

Settlor ::  

This is the term given to the person who sets up a trust to manage assets.

Stamp duty ::          

The government imposes a levy beyond a given threshold over which the borrower has to pay tax when buying a property.

Standard Variable Rate  ::      

This represents the lenders normal interest rate for mortgages or loans.

Standing Order ::    

The borrower will set this up with his bank to pay the lender a certain amount every period.

Start Date ::            

This is the date when the insurance policy will commence.

Status  ::

This informs the lender of your credit history and the status of your employment.

Structural Survey  ::               

Normally carried out by a professional structural engineer and involves the taking of dimensions and other property structural details as to condition of repair required before the lender can lend monies for a mortgage or loan.

Subject to survey and contract ::          

This is a standard agreement condition which gives both parties the right to withdraw from entering into an exchange of contracts.

Subrogation  ::        

This gives a right to the person taking over a loss to sue the third party.

Subsidence  ::        

This normally happens in a dry summer when the water table sinks and causes the building to submerge a little into the ground.

Sum Assured/Insured ::         

This represents the limit to what will be paid in the case of a claim and excesses will have to be taken into account.

Surrender  ::           

Normally represents the process of cashing in your endowment policy back to the policy provider.

Survey  ::               

Normally carried out by a professional consultant and involves the taking of dimensions and other property details as to condition.

Surveyor ::             

Is a  professional consultant and who reports upon dimensions and other property details.

 

Term ::    

This represents the duration your mortgage or loan will be for.

Term assurance ::  

This represents a type of life insurance which will pay out upon the death of the insured.

Tie in Term ::           

This the duration before which no early repayment charges will apply.

Tie you in / tie ins ::                

This represents a period of time the lender will ask the borrower not to remortgage without suffering penalties.

Title  ::     

This a  document sets out who is the owner of the property named in the title deeds as a proof.

Title deeds ::           

This a  document sets out who is the owner of the property named in the title deeds as a proof.

Title Insurance  ::    

This policy protects the purchaser and / or lender in case of errors found in the title search.

Title Search  ::        

This search is carried normally by a solicitor or title company by the checking of the land registry records to ascertain who legally is the owner of the property.

Total Loss  ::          

This represents the maximum policy limit above which there will be no further payment and concerns an event which leaves no asset value.

Tracker  ::               

This type of mortgage fluctuates with the movement of the interest rate fixed by the Bank of England.

Tracker Rate ::       

This type of mortgage fluctuates with the movement of the interest rate fixed by the Bank of England.

Transfer deed ::     

This is a document on the Land Registry database which provides details of ownership of the property.

Transfer of Equity ::               

This represents a way of removing or adding a property owner from a mortgage contract.

Treatment ::            

The person will be receiving medical help from a Doctor or other medical specialists on a regular basis.

Treatment Indemnity ::            

This is a type of insurance policy which pays costs of the claimant resulting from any unfair treatment by the holder of the policy.

Trustees ::              

Trustees represent the official owners of trust property which they hold on trust for legal claimants.

Trusts ::  

Trusts are set up to safeguard the interest withheld in life assurance policies.

 

 

UK ::       

The United Kingdom represents as a combination England, Wales, Scotland, Northern Ireland, Isle of Man and the Channel Islands.

Umbrella Policy  ::   

This type of policy covers for losses which are normally higher than the underlying policies.

Underpayment  ::    

This represents a lower payment of the monthly instalment on a loan or mortgage.

Underwriter (also Insurer) ::  

This is a person or company who calculate the risk, premiums and the terms of the insurance.

Underwriting  ::      

Is the procedure for classifying the insurability of a policy at appropriate premiums.

Unemployment, Unemployed ::               

This represents those people who are registered with the Department of Health and Social Security as being out of work and unemployed.

Unit Linked Policy ::                

The Borrower's premiums purchase a number of units from a investment fund every month and the selling or buying price of the units depends on the stock market.

Universal Life Insurance  ::    

This type of life insurance policy has flexible ways of paying the mortgage.

Usury  ::

This represents the interest paid over and above recommended by the government.

 

Valuation ::             

The lender will carry out an inspection of the property to assess whether the property is a worthwhile security to grant a loan or mortgage for the borrower.

Variable Life Insurance ::       

This type of insurance policy fluctuates with the value of the stock market and money markets.

Vendor ::                

This represents the person who you are purchasing the property from.

Verification of Deposit (VOD)  ::            

This represents the confirmation by the lender that monies have been transferred to the borrower's account.

Verification of Employment (VOE)  ::     

This represents the confirmation by the borrower's employer of the status of employment and salary details.

 

Waiver of Premium ::              

This presents a form of payment protection where the lender will pay the premiums if the borrower cannot due to some form of illness or sickness.

We, Us, Our ::        

This is normally the insurance company referred to in the insurance policy.

What is interest?  ::                

Represents the amount of money charged for borrowing the money from the lender.

Whole Life Insurance ::          

This form of insurance in kept in place for the duration of the borrower's life and pays out upon death.

Work or Working or Worked ::                

This represents a fully employed, self employed working person for at least 16 hours every week or those on statutory leave from employment. The self employed will need to be fully up to date with their National Insurance Contributions.

 

You or Your  ::       

The insurance policy will state those persons who have been covered.

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