Insurance Jargon buster.
Glossary of frequently used terms

Insurance can be tricky - we get that, especially with all the jargon. We're here to help ensure you have the information you need to make an informed choice about what insurance is right for you. Below is a list of terminology that's often used, and what it means.

Accelerated Trauma cover

This is a partial payment of your life cover benefit (if you have $500,000 life cover and $100,000 trauma cover and make a trauma claim, your life cover will reduce to $400,000). The alternative type of trauma cover is "Standalone", and does not affect your life cover when you claim it.


The insurer looks at all the information you've provided in the application form. From there, they decide if any additional information is required. That could be in the form of a medical test (blood test or exam), or some information from your doctor regarding a particular condition.


Body Mass Index (BMI). BMI is a number used to determine if someone is a 'healthy' weight in relation to their height. It's calculated by dividing the person's height (in cm's) by their weight (in kg's).


We pay you a percentage of your annual premium, as a thanks for becoming a LifeDirect customer. This applies to Life, Income Protection and Mortgage repayment cover only.


The process to have the benefit pay out directly to a medical provider, or a policy owner.


LifeDirect is paid a commission from the insurer for the part we play in setting up your new insurance cover. There are no added fees or extra cost to you at all.

Cover Amount/Sum Insured

The dollar amount that you're covered for.

Customer Care Specialist

This awesome team of people help you through the application process and get your policy in place once the assessment is complete.


If your application is declined, unfortunately you will never be able to obtain cover with that insurer. For example, applying for cover when you're already terminally ill.


Your application has been placed on hold for a prescribed period of time. For example, a pending procedure with the insurer.


A condition, event or occupation not covered by your policy, usually because it is a pre-existing condition.

Financial Adviser

A Financial Adviser is someone authorised to make a recommendation or give an opinion about acquiring, holding or disposing of a financial product. LifeDirect is not a Financial Adviser. Refer to the Financial Markets Authority (FMA) website for more information.

Insurance Consultant

This friendly team is more than happy to help you compare quotes, or help with your application. Please get in touch if you'd like help putting some insurance in place – either fill out an online contact form, or give us a call on 0800 800 400.


The policy will cease to cover you if your premiums are not paid.

Life Assured

The individual whose life is insured on the insurance policy.


An increase in premium related to a condition. A loading is usually expressed as a percentage of the premium, ranging between 50% to 400%. For example, if you get a 100% loading and your initial quote was $100 per month, your premium moving forward will be $200 per month.


LifeDirect's secure online portal where you can update your contact information, view your cover information, claim your cashback and more.

Offer of Terms

A change in the insurers 'best possible outcome' – the initial quote you see on LifeDirect. It's essentially a 'counter offer' to your initial quote.


A New Zealand Crown entity that decides, on behalf of District Health Boards, which medicines and pharmaceutical products are subsidised for use in the community and public hospitals.


Personal Medical Attendants Report - This is generally a 5 year history with your GP.


Your official agreement with the insurer.

Policy Owner

Someone who has the right to speak on behalf of the cover, as well as being a beneficiary.

Pre-existing condition

A condition or symptoms of a condition that you've had prior to applying for new insurance cover.


The dollar amount payable to the insurer to keep your valuable cover in place.


Your policy is renewed yearly, from the date your policy was put in place. The renewal will happen automatically.


Things that are needed to get your application/request finalised. For example, a quick medical and blood test.

Standalone Trauma cover

Trauma cover pays a lump sum if you suffer a major health problem covered by the policy (like serious cancer, heart attack, or stroke). Standalone trauma cover is NOT linked to a life insurance policy. Trauma cover that's linked to a life insurance policy is called "Accelerated Trauma cover".


Underwriting is the process insurance companies go through when evaluating the risk of insuring someone's life – things like health conditions, occupation and smoking status get taken into consideration during the underwriting process. Take a look at our article 'What is the life insurance underwriting process?' to find out more.

Waiver of Premium

This is a built in benefit that pays your premium if you've been disabled for a predetermined period of time. You select this time period when applying for income protection, and mortgage repayment cover.

Up to 30% Cashback* *T&Cs apply.

Starting a quote takes seconds, get on your way to being prepared for the unexpected.

Get quotes
Disclosure statement Complaints Security & Privacy