Do you need help threading through the maze of financial jargon?

Use our Jargon Buster to gain a better understanding of just what those financial terms really mean and what financial products can offer
you.

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Endowments

Although most people come across a Life Assurance Endowment policy as a means of repaying a mortgage, the policy is in fact a savings plan, the proceeds of which are used, on it reaching the end of its term, to repay the outstanding mortgage. It is not uncommon for endowments to be established purely as a method of saving for the long term. Prior to March 1984 endowment savings plans were very popular as the government gave tax relief on the premiums paid to the policy. Policies started before this date still receive this Life Assurance Premium Relief. The premiums paid into the policy have a dual purpose. Firstly they cover the cost of the Life Assurance protection offered within the policy. The person insured under the terms of the policy is called the Life Assured. The balance premiums are invested by the Life Assurance Company to increase the value of the policy. Secondly, over the term of the policy the value of the savings element grows and over time the value of the policy exceeds the total of the premiums paid. This provides the growth on your money.

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Fund Supermarkets

The idea of a fund supermarket was first established in the United States over ten years ago and arrived in the UK at the end of 1999. The term supermarket is given to these businesses because of the way in which they operate. They offer a very wide choice by allowing investors to invest in the funds, which are normally Unit Trusts or oeics, of many different investment management groups through just one place. There is a multitude of different fund supermarkets many of which are only available via the Internet. There are differences between the various funds supermarkets normally in the number of investment management groups on offer, services and functionality. It is normal for the fund supermarkets that offer the greatest number of Investment Management Groups to give the widest choice of investment funds.

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Hospital Cash Plans

Hospital cash plans pay a given amount of money if you are required to stay in hospital for any of a number of given reasons. The main idea behind these plans is to provide cover for day-to-day living expenses of yourself or your family, or to cover additional expenses such as childcare, travelling or accommodation costs. Some plans may also pay out up to a given limit for certain types of medical treatment. Cash plans will not provide cover in respect of a pre-existing illnesses. Any money paid out as the result of a claim under a cash plan is normally paid tax-free.

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