A property insurance clause providing automatic cover for buildings and contents acquired during the period of insurance up to the lesser of 10 per cent of the sum insured or £500,000 provided they are not otherwise insured. The insured is required to give particulars of additions and to arrange specific insurance retrospectively.
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A provision in a Standard Fire and Allied Perils Policy to cover new buildings or machinery added by the insured during the period of insurance.

Term denoting the amount payable on death under life policies, less the mathematical reserves in respect of the relevant contracts. The term is used in connection with life solvency margins.

The single payment of a lump sum as opposed to smaller regular payments (as with temporary disablement). Personal accident policies pay lump sums for death, dismemberment, loss of sight.

An annuity term referring to that part of an annuity payment that is paid tax-free to the annuitant. It is treated as a return of capital while the balance of the payment is taxed at the annuitant’s marginal income tax rate.

A market where debt and equity are traded. By selling securitised bonds (re)insurers transfer insurance risk to the capital market. See CATASTROPHE BONDS; SECURITISATION.

An annuity under which the insurer guarantees to make total gross annuity payments equal to the purchase price regardless of the date of death.

business other than life insurance whereby in return for one or more premiums a sum or series of sums is to become payable to the insured in the future.

Policies, unrelated to human life, whereby a company regularly sets aside money so that on maturity it can retire its bonds, debentures or preferred stock. The so-called ‘sinking fund’ also enables the company to replace wasting assets such as leases (leasehold redemption policies). The policies are long-term business but not part of the life fund.
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A Policy that provides a specific sum of money after a specific interval (also known as a Sinking Fund Policy)

A charging device used by unit trust managers. In the early years (e.g. up to three) premiums are allocated to capital units in order to recover expenses.