Jargon Buster - Definition of Increasing Term Assurance

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Increasing Term Assurance

is an insurance policy that pays out a lump sum in the event of the death of the life assured. Increasing Term Assurance is often referred to as Increasing or Index-Linked Life Insurance as the sum assured increases each year in-line with Retail Price Index (RPI). It is also possible with some companies to link the policy to Average Earnings Index (AEI) or by a specified percentage each year (e.g. 5 or 10%).

The main advantages of Increasing Term Assurance policies are that your policy will not affected by inflation and your cover increases each year without additional medical underwriting.

Please note that all definitions are intended for general guidance only. For official and current definitions you should always double check your policy wording.

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