The years added to the ‘actual membership years’ to enhance the benefits for the member of a defined benefit scheme. It may be the outcome of a transfer payment received by the pension scheme, an additional voluntary contribution, or the employer or the scheme improving the member’s benefits.

A document that notes alterations agreed between the parties to a reinsurance contract.

A method used by life underwriters when charging an extra premium to under average lives. The underwriter adds a number of years to the proposer’s age in order to determine the actual premium that will be charged.

The commission at a fixed or variable rate that the reinsurer pays to the reinsured if the loss ratio is below a specified percentage.

Fire policy clauses covering additional costs such as the cost of removing debris or complying with public authorities requirements. Cover is subject to the adequacy of the sum insured. See PUBLIC AUTHORITIES CLAUSE; DEBRIS REMOVAL CLAUSE.

An optional extension under a business interruption insurance. It allows the insured to incur reasonable additional expenditure to avoid or diminish any further reduction in turnover following a loss even though the amount payable exceeds the loss thereby avoided. Without this extension the insured’s recovery for ‘increase in cost of working’ will not be permitted to exceed the loss of gross profit avoided by such expenditure. The extra cover is for a specific sum.

The earnings-related part of the pension scheme. It is additional to the basic state pension. The current additional scheme, the state second pension, replaced SERPS in April 2002.

An extra charge made by the insurer for improving the cover, changing the risk or extending the period of insurance, or under an adjustable policy where the record shows that the actual activity exceeded the initial estimate.

Voluntary contributions by pension scheme members to boost their eventual retirement income. Tax relief on AVCs is subject to the normal limits, but they cannot be commuted to a taxfree lump sum. AVCs are ‘in-house’, or set up as an FSAVC (free standing AVC) from a provider of the individual’s choice. See HEADROOM CHECK.

A clause applicable to certain aviation hull insurances under which the cover is automatically extended to include further aircraft owned or operated by the insured of the same type and value of the aircraft already insured.