Relative incidence of disease and accidents in a welldefined class or classes of person. It is set out in statistics based on actuarial practice called a morbidity table and used by health and life underwriters.

A noncontribution clause. Two policies may cover the same property and same interest, one in specific terms and the other in general terms. To prevent contribution, the clause provides that a more specific insurance operates first when a claim occurs. ‘More specific’ refers to the range of property covered and not the range of perils.

the pure protection element in a life assurance contract; the insurer may fund it by appropriating part of the premiums or, in the case of investment-linked business, by cancellation of part of the policy value.

The amount shared out among long-living annuitants that is derived from the insurer’s profit derived from those who die shortly after taking out the annuity. Annuities are a way of ‘insuring’ against outliving one’s capital. The crosssubsidy is cumulative over time and exposes those who defer their annuities, as with income drawdown, to mortality drag.

The additional rate of return that investments left in a fund, such as income drawdown, have to generate above the yield on an annuity in order for income drawdown to provide a higher overall retirement pension. Over time it becomes very difficult for the return on the fund to beat that from an annuity.

The additional surplus in a life fund due to the actual mortality rate being more favourable than that assumed at an earlier valuation.