This glossary defines the everyday vocabulary that Bob, a client, and a licensed adviser use when talking about insurance (with an income-protection focus) and the medical terms that come up in health disclosure. Entries are written in plain New Zealand English; medical terms are definitions only and are never diagnostic or clinical advice.
Part A, Insurance & broker terms
Premium
The amount you pay an insurer to keep your cover in place, usually monthly or yearly. If you stop paying, the cover can eventually stop too. Example: you might pay $60 a month to keep income protection cover running.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Sum insured / cover amount
The amount of money the policy is built to pay out, or the maximum it will pay. For income protection this is usually expressed as a monthly benefit rather than a single lump sum. Example: a sum insured of $5,000 a month means the policy aims to replace up to $5,000 of monthly income.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Policy
The insurance contract itself: the document and terms that set out what is covered, what is not, what you pay, and what the insurer will pay. The wording is the binding source of truth if a claim is ever disputed.
Source: ICNZ (https://www.icnz.org.nz/individuals/the-basics/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Policyholder
The person (or entity) who owns the policy, pays the premiums, and can make changes to it. The policyholder and the insured person are often the same individual, but not always.
Source: ICNZ (https://www.icnz.org.nz/individuals/the-basics/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Insured (life insured)
The person whose health, life, or income the policy is built around. A claim is triggered by something happening to the insured, such as being unable to work.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Beneficiary
The person or people who receive the money if the policy pays out, typically used for life cover. For income protection the benefit usually goes to the insured person while they are alive and unable to work.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Insurer
The company that takes on the risk, holds the policy, and pays valid claims in exchange for premiums. In New Zealand many insurers belong to the Financial Services Council.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Underwriter
The person or system at an insurer who assesses the risk of an applicant and decides whether to offer cover, at what price, and with any special terms. Underwriting is the process; the underwriter is who (or what) does it.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Broker / adviser
A professional who helps you choose, arrange, and manage insurance, acting as a go-between with insurers. In New Zealand someone giving regulated financial advice to retail clients must be a financial adviser operating under a licensed Financial Advice Provider.
Source: FMA (https://www.fma.govt.nz/business/services/financial-adviser/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
FAP (Financial Advice Provider)
A person or business licensed by the Financial Markets Authority to give, or to be responsible for others giving, regulated financial advice to everyday (retail) clients in New Zealand. Anyone advising retail clients must either hold a FAP licence or operate under one.
Source: FMA (https://www.fma.govt.nz/business/services/financial-advice-provider/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Claim
A formal request to the insurer to pay out under the policy because a covered event has happened, such as being unable to work due to illness or injury. The insurer assesses the claim against the policy wording before paying.
Source: ICNZ (https://www.icnz.org.nz/individuals/making-a-claim/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Excess
The portion of a loss you agree to cover yourself before the insurer pays the rest. It is common in general insurance (e.g. car or home); income protection more often uses a wait period rather than a dollar excess.
Source: ICNZ (https://www.icnz.org.nz/individuals/the-basics/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Exclusion
A specific situation, condition, or cause that the policy will not pay for. Exclusions can be standard (built into every policy of that type) or personal (added for one applicant based on their health or activities).
Source: ICNZ (https://www.icnz.org.nz/individuals/the-basics/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Endorsement
A written change to a policy that adds, removes, or alters terms after it has started. An endorsement becomes part of the contract once it is issued.
Source: ICNZ (https://www.icnz.org.nz/individuals/the-basics/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Rider
An optional add-on that extends or boosts a base policy, usually for an extra premium. Example: adding a booster that increases your income-protection payments if you are totally disabled.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Lapse
When a policy ends because the premium was not paid, leaving you without cover. Lapsing usually happens after the grace period passes with no payment.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Surrender
When the policyholder voluntarily cancels a policy and ends the cover. For some savings-style policies there can be a surrender value paid back, but most pure protection policies (like income protection) have none.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Reinstatement
Restoring a lapsed policy back to active cover, usually by paying the missed premiums and sometimes by giving updated health information. The insurer decides whether to allow it.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Grace period
A short window after a premium is due in which the policy stays in force even though payment is late, giving you time to pay before the cover lapses. The length is set out in the policy wording.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Underwriting
The process an insurer uses to assess your risk and decide whether to offer cover, at what price, and with any special terms. It usually relies on the health, occupation, and lifestyle information you disclose in your application.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Loading
An extra amount added to your standard premium because you are assessed as a higher-than-average risk. Example: a health condition might lead to a 50% loading, meaning you pay 50% more than the base price.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Pre-existing condition
A health condition you already had (or had signs or treatment for) before the cover started. Policies often exclude or limit claims that arise from pre-existing conditions, depending on what was disclosed and accepted.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Risk rating
The insurer's overall judgement of how likely you are to claim, which drives your price and terms. A higher risk rating can mean a higher premium, an exclusion, or a different outcome.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Occupation class
A grouping insurers use to rate the risk of your job, based on how physical or hazardous it is. Office-based and professional roles usually sit in lower-risk classes (cheaper cover) than manual or high-hazard roles.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Indemnity vs agreed value
Two ways an income-protection benefit can be set. Indemnity bases the payout on a proportion of your actual income measured at the time you claim, while agreed value locks in a benefit amount when the policy starts so you have certainty regardless of later income changes.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Indexation / CPI increases
An automatic yearly increase to your cover amount (and usually premium) in line with inflation, often tracked by the Consumers Price Index. It helps your cover keep pace with rising living costs over time.
Source: Sorted (https://sorted.org.nz/guides/protecting-wealth/insurance-types/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Stepped vs level premium
Two ways premiums can be structured over time. Stepped (rate-for-age) premiums start lower but rise each year as you get older, while level premiums start higher but are averaged to stay flatter for a set period, often becoming cheaper than stepped later on.
Source: MoneyHub NZ (https://www.moneyhub.co.nz/stepped-vs-level-life-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Waiver of premium
A feature that pauses your premiums while you are receiving a benefit or are disabled, so your cover keeps running without you paying during that time. It is sometimes built in and sometimes an optional add-on.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Non-disclosure
Failing to tell the insurer something relevant when you apply or update your cover, whether by leaving it out or not mentioning it. Non-disclosure can affect a future claim, so honest and complete answers matter.
Source: IFSO Scheme (https://www.ifso.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Misrepresentation
Giving the insurer information that is wrong or misleading when applying for or changing cover. Under New Zealand's Contracts of Insurance Act 2024, consumers must take reasonable care not to make a misrepresentation.
Source: New Zealand Legislation (https://www.legislation.govt.nz/act/public/2024/46/en/latest/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Utmost good faith
The principle that both you and the insurer must act honestly and openly with each other, including sharing relevant information fairly. It is a long-standing foundation of insurance contracts.
Source: IFSO Scheme (https://www.ifso.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Wait period / stand-down period
The time you must be unable to work (or otherwise eligible) before income-protection payments begin. New Zealand policies commonly offer wait periods such as 4, 8, 13, or 26 weeks; a longer wait period usually means a lower premium.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Benefit period
How long income-protection payments can continue once they start, assuming you stay eligible. Options typically range from a couple of years up to age 65 or 70; a longer benefit period costs more.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Benefit amount
The amount the policy pays while you are on claim, usually a set monthly figure or a percentage of your pre-disability income (often around 75%). It is capped by the policy's terms and any other income offsets.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Total disability
A claim state where you meet the policy's definition of being unable to work because of illness or injury, usually unable to do the important duties of your job. The exact wording varies by policy and determines whether the full benefit is paid.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Partial disability
A claim state where you can do some work but not all of it, and your income has dropped as a result. The policy usually pays a reduced benefit scaled to how much income you have lost.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Recurrent disability
A rule that treats a relapse of the same condition, within a defined window after returning to work, as a continuation of the original claim rather than a brand-new one. This usually means you do not have to serve the wait period again.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Offset
Other income or payments (such as ACC, other insurance, or sick pay) that the insurer subtracts from your income-protection benefit so the total does not exceed your policy's limit. Indemnity policies in particular reduce payments by these offsets.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Own-occupation vs any-occupation
Two ways a disability claim can be defined. Own-occupation pays if you cannot do your own specific job, while any-occupation only pays if you cannot do any job you are reasonably suited to; own-occupation is more generous and usually costs more.
Source: AIA NZ (https://www.aia.co.nz/en/our-products/income-protection-insurance.html) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Proposal / application
The form and information you submit to apply for cover, including details about your health, job, and lifestyle. The insurer uses it to underwrite and decide what to offer.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Declaration
A statement you sign to confirm that the information you have given is true and complete to the best of your knowledge. It forms part of the basis on which the insurer offers cover.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Duty to take reasonable care
The consumer's obligation under New Zealand's Contracts of Insurance Act 2024 to take reasonable care not to make a misrepresentation when applying for or changing cover. It is judged by what a reasonable person in your circumstances would do, and the insurer must ask clear, specific questions.
Source: New Zealand Legislation (https://www.legislation.govt.nz/act/public/2024/46/en/latest/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Replacement business
Cancelling an existing policy and taking out a new one to replace it. Advisers are expected to make sure a replacement genuinely benefits the client, because switching can mean new health underwriting and lost benefits.
Source: FMA (https://www.fma.govt.nz/business/services/financial-adviser/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Churning
Repeatedly switching a client's policies, often to earn commission, without a real benefit to the client. It is a conduct concern and is discouraged under New Zealand's financial advice rules.
Source: FMA (https://www.fma.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Cooling-off period / free-look period
A short window after you take out a policy (often around 14 to 21 days) during which you can cancel and usually get your premium back if you have not claimed. It gives you time to read the wording and make sure the cover is right for you.
Source: AA Insurance NZ (https://www.aainsurance.co.nz/help/article/360000943956-Does-my-policy-include-a-cooling-off-period) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Claim assessment
The insurer's process of checking a claim against the policy wording and the supporting information (such as medical evidence) before deciding to pay, decline, or ask for more. For income protection it can include confirming you meet the disability definition and serve the wait period.
Source: ICNZ (https://www.icnz.org.nz/individuals/making-a-claim/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Part B, Medical & health-underwriting terms
Pre-existing condition (medical)
In a health context, a condition, symptom, injury, or illness you already had before cover started, including ones being investigated or treated. It matters in underwriting because insurers assess and sometimes exclude conditions present at application.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Chronic vs acute condition
A chronic condition is long-lasting or ongoing, often managed over months or years (for example, a long-term health condition). An acute condition comes on quickly and is usually short-term, resolving or being treated within a defined period.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
BMI (body mass index)
A simple number calculated from height and weight, used as a general screening measure of whether someone is in a healthy weight range. Insurers sometimes use it as one input when assessing risk; it is a rough guide, not a diagnosis.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
GP / general practitioner
A doctor who provides general, first-contact medical care in the community and coordinates referrals to specialists. Insurers may ask for GP records as part of underwriting or a claim.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Specialist
A doctor with advanced training in a particular area of medicine (for example, a heart or cancer specialist), usually seen on referral from a GP. Specialist reports can form part of underwriting or claim evidence.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Comorbidity
The presence of more than one health condition in the same person at the same time. Comorbidities can affect underwriting because combined conditions may carry more risk than a single one.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Remission
A period when the signs and symptoms of a condition have reduced or disappeared, which can be partial or complete. A condition in remission may still be relevant to disclosure and underwriting.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Prognosis
A medical view of the likely course or outcome of a condition over time. It is general information from a clinician, not something Bob assesses; it can be relevant to claims that depend on recovery.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Prophylactic
Something done or taken to prevent a condition rather than treat an existing one (preventive in nature). For example, a preventive medicine or procedure intended to reduce future risk.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Congenital
A condition present from birth, whether or not it is inherited. It may be relevant to disclosure because it relates to long-standing health history.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Hereditary / familial condition
A condition that can run in families because it is passed down genetically, or that appears more often among close relatives. Family medical history is sometimes asked about during underwriting.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Cardiovascular (category)
Health matters relating to the heart and blood vessels (for example, blood pressure or heart conditions) as a general category. Insurers commonly ask about this area; this is a category description, not advice about any condition.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Respiratory (category)
Health matters relating to the lungs and breathing, such as asthma, as a general category. This describes the area underwriters may ask about and is not advice about any individual condition.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Mental health (category)
Health matters relating to psychological wellbeing, such as anxiety or depression, as a general category. This is a sensitive area; questions should be handled with care and privacy, and this entry is a category description only, not advice.
Source: Health NZ (https://www.healthnz.govt.nz/mental-health/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Musculoskeletal (category)
Health matters relating to muscles, bones, joints, and the spine, such as back conditions, as a general category. It is one of the areas underwriters often ask about; this is a category description, not advice.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Endocrine (category)
Health matters relating to hormones and glands, including diabetes (where type 1 and type 2 differ in cause and management), as a general category. This describes the area underwriters may ask about and is not advice about any individual condition.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Oncology / cancer history (category)
Health matters relating to a past or present cancer diagnosis, as a general category. Insurers may ask about diagnosis, treatment, and time since treatment; this is a sensitive category description only, not advice.
Source: Health NZ (https://www.healthnz.govt.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Standard rates
An underwriting outcome where cover is offered at the normal price and terms, with no extra loading or exclusions. It means the insurer assessed the risk as ordinary for that type of cover.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Loading (underwriting action)
An underwriting outcome where cover is offered but at a higher premium than standard, to reflect a higher assessed risk. Example: a condition might lead to a percentage loading added to the base premium.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Exclusion (underwriting action)
An underwriting outcome where cover is offered but a specific condition or cause is carved out so claims related to it will not be paid. It lets the insurer offer cover for everything else while leaving out the higher-risk part.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Deferral (postponement)
An underwriting outcome where the insurer delays a decision and asks you to reapply later, often pending more information or recovery. The application is not declined, just paused for now.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft
Decline
An underwriting outcome where the insurer decides not to offer the cover applied for, because it assesses the risk as too high to take on. A decline on one application does not necessarily mean every insurer or product would reach the same decision.
Source: FSC (https://www.fsc.org.nz/) · retrieved 2026-06-18 · rights: own-summary · drives: information · status: draft