This section explains terms you might have seen in other parts of this site or in communication you have received from creditors.
- Definition: Illustrations
In financial terms, an estimated value of what a person’s savings and investments will be at some point in the future, based on certain conditions. Rules that apply to investment products are contained in the Consumer Protection Code available at www.consumerhelp.ie.
- In Credit
- Definition: In Credit
A situation where money is available in an account.
- Definition: Income
Money coming in, for example:
• social welfare payments
• rental income
• payments from children
- Income Tax
- Definition: Income Tax
A tax on personal or business income. For more information on income tax, see the Revenue Commissioners’ information on PAYE.
- Definition: Indemnify
To provide an indemnity.
- Definition: Indemnity
A promise to compensate someone else for loss or damage, or protection from legal responsibility, from a person’s actions.
- Independent Financial Advisor
- Definition: Independent Financial Advisor
Someone who advises people on financial products, life insurance, pension plans and investments – and who does not work for a company selling such services. See also Financial Advisor.
- Definition: Index-Linking
Linking the price of a financial product (such as a pension) to the Consumer Price Index so that the value of the product keeps up with inflation.
- Definition: Indexation
A way of changing the value of savings and the cost of goods and services to compensate for the effects of inflation.
- Definition: Inflation
An increase in prices.
- Insolvency Service of Ireland
- Definition: Insolvency Service of Ireland
The body established by the Act to carry out particular functions such as the initial approval of the arrangements before they send them to the Specialist Judge for approval.
- Definition: Insolvent
When a person or organisation cannot pay debts when they are due for repayment. Personal insolvency is also known as bankruptcy.
- Definition: Instalment
Regular repayments. Usually loans or goods bought on credit are paid by instalments once a month.
- Instalment Order
- Definition: Instalment Order
See Enforcement of Debt.
Variation of Instalment Order
If an instalment order has been granted, a debtor or creditor may apply to court at any time to have the instalment order changed following a change in circumstances or if no entry of appearance or defence was entered at the first hearing.
Building and Contents Insurance
An insurance policy that pays for rebuilding a home if it is damaged. All mortgages require homebuyers to have building insurance. It is also advisable to take out contents insurance to insure your valuables in case they are damaged or stolen. For further information, see Buildings and Contents Insurance.
An investment-based savings plan that pays out a lump sum on a certain date in the future or when a person dies (whichever comes first) and is usually used to pay off a large loan, such as a mortgage. Like all investments, endowment policies can fall in value as well as rise.
A type of event or health condition, for example, that is not covered in an insurance policy.
Income Protection Insurance or Permanent Health Insurance
An insurance policy that provides payment when someone is incapacitated due to an accident, injury or illness. Depending on the policy, “incapacitated” can mean you are:
• unable to do your own job
• unable to do any other suitable job
• unable to do any job at all
• incapable of being able to carry out daily living tasks
Check your terms and conditions for:
• what percentage of your salary will be paid
• any deferral time (waiting time)
• what impact receipt of social welfare payments will have on payment
Under the Consumer Protection Code, insurance firms must act in your best interests when providing products or services to you. They must also:
• give you the information necessary for you to make an informed decision
• make sure you are aware of any special conditions or restrictions that apply
• explain clearly the restrictions, conditions and exclusions that apply to a serious-illness policy and for an income-protection policy
• explain the meaning of disability
• explain the benefits available under the policy
• tell you how your benefit might be reduced by payments from other sources, such as social welfare or sick pay
• tell you about any discounts that apply or any extra premium being charged when they give you a quote
• tell you that your coverage or any claim you make could be affected if you give incorrect or incomplete information when applying for cover
• help you if you need to make a claim
Tax relief is available for this insurance, so check you have claimed it. To read the code, see www.consumerhelp.ie.
An insurance policy to cover any financial loss if the property is sold for less than the value of the mortgage. This insurance is often a once-off payment at the beginning of the mortgage, paid by either the mortgage provider or the borrower.
Protection against certain events (such as loss or damage) as outlined in an insurance policy contract (for example damage to a car, a home or your health). Under the Consumer Protection Code, when a firm sells a product or service to you (such as insurance cover), they cannot make it a condition that you buy another separate product or service from them. For more information, see www.consumerhelp.ie.
A document containing the terms and conditions of the contract made between an insurance company and a person whose property or health is being insured. The policy sets out the terms and conditions of the contract.
- Cancellation of Insurance Policy
Before you cancel any insurance policy, you should first consider the pros and cons of being uninsured. For more details on the issues you should consider, see Cancellation of Policy.
- Unsuitable Insurance
You should check the terms of your insurance policy to make sure that you have the most appropriate insurance. If you have been sold an insurance product that was unsuitable for your needs when you purchased it, you can complain using complaints procedures.
If you have been sold an unsuitable insurance product, or are unhappy with the service provided, you can register your complaint with the Financial Services Ombudsman at Financial Ombudsman Complaints.
Money a person pays regularly to an insurance company to pay for their insurance policy. Some insurance is paid in full upfront at the start of the agreement and some is paid by regular instalments. If these instalments are not paid, the policy may “lapse” (meaning the insurance protection is taken away).
The price of an insurance policy that is given by an insurance company.
Life Insurance (also known as Life Assurance)
An insurance policy which pays out a specified sum of money following the death of the insured person to their beneficiaries (who are people named in the policy to receive money).
Regular payments (premiums) are made to the insurance company to keep the policy going. Be careful about missing these premiums so that the policy does not lapse, which would mean you are no longer insured. See www.nca.ie for information from the National Consumer Agency on how to switch policies. The Financial Regulator also publishes regular surveys of insurance costs that show how you could make significant savings over the term of a policy.
You must have motor insurance to drive a car in Ireland. Motor insurance can be “third party, fire and theft” or “fully comprehensive”.
Insures Covers damage to your car in the event of an accident and provides third-party, fire and theft cover.
Motor Insurers’ Bureau of Ireland (MIBI)
A body set up in 1995 by an agreement with the government to compensate victims of road traffic accidents caused by uninsured or unidentified drivers. For more information on the MIBI, see www.mibi.ie.
Open Drive Insurance
Allows any licensed driver to drive the policyholder’s car under the same insurance cover.
Third Party, Fire and Theft
Insures your car against fire and theft and covers the damage to any other car that you crash into (if you have been found liable). It does not cover your own car in a crash, even if the crash was not your fault. If you have this type of insurance and the crash was not your fault, you should claim on the other person’s insurance or report the accident to the MIBI.
For more information, see the Citizens Information page on Motor Insurance.
Mortgage Insurance / Mortgage Protection Insurance
Insurance designed to pay off your mortgage if you die before paying it off yourself. For more information, see Mortgage Protection.
Payment Protection Insurance
Insurance that is intended to provide cover for money owed on a credit agreement if a person becomes unable to make payments. It usually covers a person against accidents, illness, redundancy or death. Generally it covers payments for about 12 months and it does not cover arrears.
You should check your credit agreement to find out if it includes payment protection insurance. If you do have protection and need to make a claim, make sure you satisfy the terms and conditions first. There are rules in the Consumer Protection Code about selling products suitable to you. Insurance providers must not force you to buy payment protection insurance or include the cost of it in the initial quote. For more information, see www.consumerhelp.ie.
Repayment Protection Insurance
Like a payment protection plan, a policy that makes repayments if a person cannot afford them (for example, if they become ill or lose their job).
A simple form of life insurance that a person takes out for a set period of time (for example 10, 20 or 25 years) and guarantees to pay out a specified sum to their beneficiary if they die during that period of time.
Life assurance that pays out an agreed sum when the person who took out the insurance dies, as long as they have continued to pay their premiums.
- Definition: Interest
A kind of fee you receive if you save money, or pay if you borrow money. It is usually shown as a percentage of the savings or the loan.
The money you pay back on top of the money you borrowed in a loan or credit agreement.
The money you get added to your savings when you keep your money in a bank or building society for a set period of time.
A loan from a lending agency or a credit card company on which you pay no interest for a set period of time.
Sometimes products are advertised as being “interest free” but if the agreement is not kept (i.e. payments are not made), interest may be charged. If this happens, you should check your agreement – as this can only be done if it was written into the contract and only if the creditor is licensed to provide credit.
The percentage that you receive on your savings or pay on your loans. For example, a savings account that offers 8% will give you more than one offering 5%. Similarly, borrowing money at 25% is going to cost you more than borrowing at 18%.
- Interest-Only Mortgage
- Definition: Interest-Only Mortgage
A mortgage where a person pays only the interest to the lender for a set period of time.
- Intermediary (also known as Broker)
- Definition: Intermediary (also known as Broker)
Someone who introduces possible clients to financial services providers, who may then advise the client about their financial or insurance needs and help them to choose the most appropriate products.
- Definition: Investment
Financial products that typically involve some risk of losing your money, but also give you the opportunity of earning more than you would from leaving your money in savings. For example, instead of putting your money into a savings account and getting the interest, you could buy market-based investments (such as stocks, bonds, shares or trusts).
It is possible to own shares without realising it since many financial products (such as pensions) are based on investments made on your behalf using the funds you lodge to your pension each week / month. Other products reduce (or “spread”) the risk of investing in the stock market by investing your money in many different areas. The value of your investment will change over time as the stock markets go up and down. The Consumer Protection Code applies to all investment products
- irish Credit Bureau
- Definition: Irish Credit Bureau
See Credit Reference Agency or the Data Protection Commissioners’ information on the credit referencing system.