Understanding Terminology

This page contains a glossary of the terms used within the Life Insurance Trust process. This will allow you to understand the meaning of words and phrases which may be unfamiliar to you at present and to give you confidence in understanding what a Life Insurance Trust will do for you.

Trust

This is the term used for the Document that ring-fences the Life Insurance Policy.

Ring-fence

This describes the process which ensures that the Policy is paid quickly and does not get held up in Probate (see below for a description of Probate).

Settlor

This the Term used in the Trust Document to describe people who are the Policy Holders of the Life Insurance Policy.

Beneficiary

These are the people who will receive the money paid from the Life Insurance Policy.

Trustee

These are the people who ensure that the money is paid to the Beneficiaries.

Guidance

These are rules specified by the Settlor to ensure that the funds from the Policy are used only for the reasons they specify.

Loss of Capacity

A person lacks capacity if their mind is impaired or disturbed in some way, which means they’re unable to make decisions at that time. This can happen through injury or illness.

Dependants

A dependant is a vulnerable adult that relies on another adult to look after their welfare and ensure their general safety.

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