Aviva 2009 Annual Report Download - page 320

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Aviva plc Glossary
Annual Report and Accounts 2009
Product Definitions
Annuities
A type of policy that pays out regular amounts of
benefit, either immediately and for the remainder
of a person’s lifetime, or deferred to commence
from a future date. Immediate annuities may be
purchased for an individual and his or/her
dependents or on a bulk purchase basis for
groups of people. Deferred annuities are
accumulation contracts, which may be used
to provide benefits in retirement, and may be
guaranteed, unit-linked or index-linked.
Bonds and savings
These are accumulation products with single
or regular premiums and unit-linked or
guaranteed investment returns. Our product
ranges include single premium investment
bonds, regular premium savings plans and
mortgage endowment products.
Critical illness cover
Critical illness cover pays out a lump sum if the
insured person is diagnosed with a serious
illness that meets the plan definition. The cover
is often provided in conjunction with other
benefits under a protection contract.
Deferred annuities
An annuity (or pension) due to be paid from
a future date or when the policyholder reaches
a specified age. A deferred annuity may be
funded by a policyholder by payment of a series
of regular contributions or by a capital sum
(the latter often provided from a pension fund).
Group pensions
A pension plan that covers a group of people,
which is typically purchased by a company and
offered to their employees.
Guaranteed annuities
A policy that pays out a fixed regular amount
of benefit for a defined period.
Income drawdown
The policyholder can transfer money from any
pension fund to an income drawdown plan
from which they receive an income. The
remainder of the pension fund continues to be
invested, giving it the potential for growth.
Index linked annuities
An index linked annuity is a type of deferred
annuity whose credited interest is linked to an
equity index. It guarantees a minimum interest
rate and protects against a loss of principal.
Investment sales
Comprise retail sales of mutual fund type
products such as unit trusts, individual savings
accounts (ISAs) and Open Ended Investment
Companies (OEICs).
ISAs
Individual savings accounts – Tax efficient plans
for investing in stocks and shares, cash deposits
or life insurance investment funds, subject to
certain limits. Introduced in the UK in 1999.
Monolines
Financial companies specialising in a single line
of products such as credit cards, mortgages or
home equity loans.
Mortgage endowment
An insurance contract combining savings and
protection elements which is designed to repay
the principal of a loan or mortgage.
Mortgage life insurance
A protection contract designed to pay off the
outstanding amount of a mortgage or loan
in the event of death of the insured.
Non profits
Long-term savings and insurance products
sold in the UK other than “With profits”
(see definition below) products.
OEIC
Open ended investment company is a collective
investment fund structured as a limited
company in which investors can buy and
sell shares.
Pensions
A means of providing income in retirement for
an individual and possibly his/her dependants.
Our pensions products include personal and
group pensions, stakeholder pensions and
income drawdown.
Personal pensions
A pension plan tailored to the individual
policyholder, which includes the options
to stop, start or change their payments.
Protection
An insurance contract that protects the
policyholder or his/her dependants against
financial loss on death or ill-health. Our
product ranges include term assurance,
mortgage life insurance, flexible whole life
and critical illness cover.
Regular premium
A series of payments are made by the
policyholder, typically monthly or annually,
for part of or all of the duration of the contract.
SICAVs
Société d’investissement à capital variable
(variable capital investment company). This is
an open-ended investment fund, structured
as a legally independent joint stock company,
whose units are issued in the form of shares.