Glossary
Insurance words, explained in a sentence.
The terms you will meet on this site, in a policy wording or on a call, each in one or two sentences. General information only: the wording of your own policy always applies. Updated 5 November 2026.
How a policy works
The parts of a policy that decide what is paid, when and for how long.
- Policy wording
- The insurer's document that sets out exactly what is covered, what is excluded and how claims are assessed. It overrides anything a brochure or website says, including this one.
- Policy schedule
- The page that lists your own cover: the policy types, sums insured, waiting and benefit periods, premium structure, and any loadings or exclusions that apply to you.
- Waiting periodalso Deferred period
- On income or mortgage protection, the time between stopping work and the first payment. Common options run from four weeks to a year. A longer wait means a lower premium.
- Benefit period
- The longest an income or mortgage protection benefit will keep paying for one claim: commonly two years, five years, or to age 65 or 70.
- Indemnity benefitalso Loss of earnings
- An income protection benefit worked out from your income at claim time. If your earnings have fallen since you applied, the benefit falls with them. Premiums are generally tax deductible and the benefit is taxable.
- Agreed value benefit
- An income protection benefit fixed when you apply, from the income you prove then, and not re-checked at claim. Suits people whose income varies. Tax treatment depends on the wording.
- Offset
- A reduction in a monthly benefit for other income you receive while on claim, most often ACC weekly compensation. Income protection is typically offset by ACC; mortgage protection usually is not.
- Stand-down
- A period at the start of a policy when certain claims are not paid. Most trauma cover will not pay for cancer, heart attack or stroke that appears in the first 90 days.
- Qualifying period
- On redundancy cover, the time after the policy starts, often six months, before any redundancy claim can be made. A redundancy you already knew about is excluded.
- Exclusion
- A condition, activity or cause the policy will not pay for. Either applied to everyone by the wording, or added to your policy at underwriting for something in your history.
- Guaranteed renewable
- A policy the insurer must keep renewing while you pay the premiums. It cannot add an exclusion or cancel the cover because your health has changed since you applied, though premiums can still change.
- Special events optionalso Future insurability, Guaranteed insurability
- A feature that lets you increase cover without new health questions within a set time of a life event such as a birth, a marriage or a bigger mortgage, up to a limit.
- Continuation option
- On some workplace schemes, the right to convert your group cover to a personal policy with the same insurer when you leave, without new health questions, within a short window.
- Partial benefit
- A reduced payment when a claim does not meet the full definition: a smaller lump sum for an early-stage trauma condition, or a top-up when you return to work part-time.
- Own occupation
- A TPD definition that pays if you can never work in your own job again. Costs more and is not available for every occupation.
- Any occupation
- A TPD definition that pays only if you can never work in any job suited to your education, training or experience. A higher bar than own occupation.
- Terminal illness benefit
- An early payment of life cover, usually the full sum, when a doctor confirms you are expected to live less than twelve months.
- Funeral advancealso Bereavement benefit
- Part of a life cover sum paid within days of death, before the full claim is assessed, so the funeral is covered. Most insurers offer one; the amount differs.
- Children's trauma benefit
- A smaller trauma payment, built into many trauma policies, if a child is diagnosed with a listed condition, so a parent can stop work to be with them.
- Non-Pharmac cover
- A health insurance benefit that pays for medicines approved by Medsafe but not funded by Pharmac, or not funded for your condition, up to a limit set in the policy.
Underwriting and claims
What happens when you apply, and when you claim.
- Underwriting
- The insurer's assessment of your health, family history, job, income and lifestyle before it agrees to cover you. It decides whether you are accepted, at what price, and with what exclusions.
- Pre-existing condition
- Any illness, injury or symptom you had before the cover started, whether or not it was diagnosed. Health insurance typically excludes them; life, trauma and income cover are underwritten case by case.
- Standard terms
- Cover offered at the normal price with no loading or exclusion. The most common underwriting outcome.
- Deferral
- An underwriting outcome where the insurer asks you to apply again later, for example after treatment ends or a test result is in.
- Decline
- An underwriting outcome where the insurer will not offer that cover at this time. Insurers differ, which is why advisers check with several before an application is made.
- Pre-assessment
- Describing a health history to several insurers' underwriters without the applicant's name, to learn how each would treat it before any application is made.
- Disclosurealso Non-disclosure
- Telling the insurer everything that could matter when you apply, including things it did not ask about. Something left off the application is a common reason claims are declined.
- Claim
- A request for the policy to pay. It starts with telling the insurer or your adviser, then claim forms for you and your doctor, then assessment against the wording.
- Dispute resolution scheme
- A free, independent service every New Zealand insurer and adviser belongs to, for complaints that cannot be resolved directly. Arcadia belongs to the Financial Dispute Resolution Service.
ACC and the public system
The cover every New Zealander already has, and where it stops.
- ACC
- New Zealand's no-fault accident scheme. It covers injuries from accidents for everyone in the country, including treatment and weekly compensation, but not most illnesses.
- Weekly compensation
- ACC's payment of up to 80% of your pre-injury earnings, with a cap, while an injury stops you working. It starts after the first week.
- ACC CoverPlus
- The default ACC cover for self-employed people, with weekly compensation worked out from the earnings in your most recent tax return.
- ACC CoverPlus Extra
- Optional ACC cover for self-employed people that sets an agreed level of weekly compensation in advance, so income does not have to be proved at claim time.
- Pharmac
- The government agency that decides which medicines the public health system funds, and for which conditions, within a fixed budget.
- Medsafe
- The agency that approves medicines as safe and effective for use in New Zealand. A medicine can be approved by Medsafe and still not funded by Pharmac.
- Public waiting list
- The queue for non-urgent public hospital care: a specialist appointment, a scan, then surgery, each prioritised by clinical need with no fixed date.
KiwiSaver
The terms that come up when we talk about your fund.
- Fund type
- Where a KiwiSaver fund sits between conservative and aggressive, set by how much it holds in growth assets such as shares and property versus income assets such as cash and bonds.
- Default fund
- The balanced fund a member is placed in when enrolled automatically without choosing. Default funds have been balanced since 1 December 2021.
- Risk profile
- A short assessment of how long until you need the money and how you would cope with a fall in value, used to match you to a fund type.
- Product Disclosure Statementalso PDS
- The document a KiwiSaver provider must publish describing the scheme, its funds, fees and risks. Read it before you join or switch.
- First-home withdrawal
- The right to withdraw most of your KiwiSaver balance toward a first home in New Zealand after at least three years of membership, leaving a small minimum in the account.
Advice and regulation
Who is allowed to advise, and what they must do.
- Financial Advice Provideralso FAP
- A business licensed by the Financial Markets Authority to give regulated financial advice. Arcadia Financial Services Limited holds a Class 2 licence.
- Financial adviser
- A person who gives financial advice on behalf of a licensed Financial Advice Provider, registered on the Financial Service Providers Register and bound by the Code of Professional Conduct.
- FSPRalso FSP number
- The Financial Service Providers Register, the public register of licensed providers and registered advisers. Every Arcadia adviser's FSP number is on their profile.
- Statement of Advice
- The written recommendation an adviser gives you: what cover is recommended, why it suits you, what it costs and how the adviser is paid.
- Public disclosure
- The information a Financial Advice Provider must publish about its licence, the advice it gives, how it is paid, its conflicts of interest and how to complain.
- Duty to put your interests first
- The legal duty on advisers and providers to give priority to the client's interests when there is a conflict, for example between products that pay different commission.
- Referral
- An introduction to another licensed business for a product the adviser does not advise on. Arcadia introduces clients to Lendi Financial for lending and Baron Insurance for general insurance, and may be paid a referral fee.
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