It is a tool which can be used to offset the effect of inflation on one's investments.

Explanation of benefits of an insurance plan

An investment fund that aims to generate current income in the form of dividends or payments from stocks and bonds, rather than capital growth. Income funds are regarded as conservative investment, and tend to be popular with retirees and other investors looking for a steady cash flow without taking on too much risk.

The present value of the family's share of the breadwinner's future earnings is considered as Human Life Value, for purposes of life insurance.

Protecting against the risk of losses in one investment by taking up other investment positions that will reduce the risk run by the first commitment. This can mean investing in opposite positions in the same or equivalent stock or markets using complicated packages of futures. Though speculative, hedging is actually a cautious action which sets out to reduce the risk run by the investor.

Provides cover against loss from illness or bodily injury. Can pay for medicine, visits to the doctor, hospital stays, other medical expenses and loss of earnings, depending on the conditions covered and the benefits and choices of treatment available on the policy.

An investment fund whose aim is to achieve capital gains, rather than income, by investing in growth stocks. Typically it will focus on companies that demonstrate significant earnings or revenue growth, rather than companies paying high dividends. Growth funds can be more volatile than other types, rising more in bull markets and falling further in bear markets.

A pension scheme which an employer sets up for the benefit of his employees. All staff can become members of the same scheme. Group personal pension schemes are individual policies taken out by people working for the same employer that are grouped together for administrative convenience.

The total earnings or revenue generated by sales of insurance products, before any reinsurance is taken into account. Not all premiums written will necessarily be treated as income in the current financial year, because some of them could relate to insurance cover for a subsequent period. See also net premiums written.

Income from business written during the year, before any reinsurance is taken into account.