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The main classes of long-term insurance are:

1. Life insurance, which is usually one of two broad types:

• that sold as investment (on the basis that if the insured dies the policy pays a claim, or if the insured has not died by the time the policy matures it pays a sum based on the premiums received plus an investment return) 鈥� this is known as endowment business; and
• whole life or term insurance (which only pays out on death): term insurance is of limited duration, and only pays out if death takes places during the term of the policy;

1. Pensions insured business;
2. Permanent health insurance (PHI) or income protection insurance that provides a replacement income when someone is unable to work due to sickness or disability. (PHI should not be confused with 鈥榟ealth insurance鈥� that covers medical expenses, for the cost of hospital treatment or 鈥榓ccident鈥� insurance, which compensates someone who has had an accident. See IPT04280 for the liability of accident or health insurance premiums).