A GLOSSARY FOR INSURANCE POLICIES

Accident Benefit

This includes insurance coverage for accidental death, accidental injury and few accident-related health expenses. The policy does not cover intentional self-injury, suicide or attempted suicide and related injuries.  Childbirth and pregnancy are not covered in this.

Age Limit

Age limit varies from policy to policy. Some insurance companies do not set any maximum age limit. But the premium payouts will be high.

Agent

 The Agent is a company representative who helps to buy policies and provides service to the policyholder.

Annuity plans

This is nothing but pension plans. Some plans may provide lumpsum and pension also. In case of death of the insurer, the lump sum amount is provided to the nominee or the next kin.

Benefits

These are the benefits you are entitled to get for your insurance policies. Benefits vary depending on the policy.

Beneficiary

The beneficiary is usually the nominee named in the policy, who will be eligible to receive the proceeds of the policy upon the death of the insured.

Beneficiary account

These are the beneficiary account details provide to the insurance company for which the policy proceeds will be made.

Business Insurance

This mainly covers risks involved in business due to any accidents or the death of the key employee etc. Many insurance companies provide business insurance.

Cancellable

It is a contract made during health insurance that may be cancelled during the policy term. This contract varies from insurer to insurer.

Coinsurance

This is a policy provision usually found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 per cent by the insurer and 20 per cent by the insured.

Coverage

These are the risks that are covered by the policy. This also includes benefits as well as risk coverage.

Convertible whole life policy

This comes with very low insurance premiums with maximum risk cover. It is a mix of whole life policy and endowment policy.

Claim

The Claim is a request made by the insured person or the beneficiary for the insurance company to cover the loss.

Claim amount

It is the amount payable by the insurer

Days of grace

The Grace period to make the payment of the insurance premium. Such days are called grace days.

Deferment period

It is the period between the date of the insurance subscription and the time at which the first instalment is received. This will have a minimum and maximum limit on the deferment period.

Double or triple cover plans 

These are low premium plans. These provide the beneficiaries with double or triple the sum assured on death of the insured during the policy term.

Deductible amount

This is the amount of loss paid by the policyholder.

Dental Insurance

This covers major dental expenses.

Exclusions

This includes certain conditions or situations for which the insurer will not provide any benefits.

Embezzlement

These are theft or misappropriation of funds placed in one’s trust or belonging to one’s employer.

Endowment Policy

The policyholder has to pay an annual premium which is determined on the basis of the policy holder’s age at entry and the term of the policy. The insured amount is payable either at the end of the specified number of years or upon the death of the insured person, whichever is earlier.

Excess and Surplus Insurance

Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy.

Facultative Reinsurance

A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance.

Family Insurance

A life insurance policy providing insurance on all or several family members in one policy, generally whole life insurance on the principal breadwinner and small amounts of term insurance on the other spouse and children, including those born after the policy is issued.

Fiduciary

A person who holds something in trust for another.

Fire insurance

Coverage for losses caused by fire and lightning, plus resultant damage caused by smoke and water.

Flood Insurance

Coverage against loss resulting from the flood peril, available at low cost under a programme developed by the Central government.

Franchisee Insurance

A form of insurance in which individual policies are issued to the employees of a common employer or the members of an association under an arrangement by which the employer or association agrees to collect the premium and remit them to the insurer.

Family Benefit Coverage

A type of life insurance policy that insures the lives of the insured’s spouse and children. Also known as dependent life insurance with spouse and children insurance rider.

Group Life Insurance

Life insurance usually without medical examination, on a group of people under a master policy. It is typically issued to an employer for the benefit of employees, or to members of an association, for example, a professional membership group. The individual members of the group hold certificates as evidence of their insurance.

Guaranteed Policies

These are policies where the payment stays fixed.

Guaranteed returns

These are policies where the benefits are guaranteed.

Insurance

Insurance is a contract, represented by a policy, in which an individual or entity receives financial protection or risk coverage against losses.

Insured

The person whose life is covered by a policy of insurance.

Lapsed Policy

A policy which is terminated and is no longer in force due to non-payment of the premium due.


Limited Payment Life Policy

Premiums need to be paid only for a certain number of years or until death if it occurs within this period. Proceeds of the policy are granted to the beneficiaries whenever the death of the policyholder occurs.

Loyalty Additions

The loyalty addition is given upon the maturity of the policy, and not before. It’s a small percentage of the sum assured.

Life Assured

The person whose life is insured by an individual life policy is called life assured.

Life Insurance

Insurance that pays out a sum of money either on the death of the insured person or after a set period.

Maturity

The date upon which the face amount of a life insurance policy is paid to the policyholder.

Maturity Claim

The Payment to the policyholder at the end of the stipulated term of the policy is called maturity claim.



Money Back Policy

Unlike endowment plans, in money-back policies, the policyholder gets periodic payments during the term of the policy and a lumpsum amount on surviving its term.

Maturity Amount

The Payment to the policyholder at the end of the stipulated term of the policy is called maturity claim.

Nomination

An act by which the policyholders authorizes another person to receive the policy money. The person authorized is called Nominee.

Non-cancelable policies


Such policies stay in effect regardless of whatever that might happen and as long as the premium is paid from time to time.

Nominee

The person authorized for the policies is called a Nominee. The Nominee is the beneficiary of the payouts in case of death of the insured person.

NRI polices

These are the policies which an NRI can opt for.

NRI retirement plans

These are the insurance plans designed to suit the requirements of NRIs who likes to invest in native insurance policies.

NRI pension plans

These plans provide NRIs with a wide range of pension plans, which they can choose if they want to settle down in India after retirement.

NRI insurance

These ar insurance plans an NRI can go for.

Premium


The payment made to the insurance company for the term specified for the policy. This amount is called premium or premium amount.

Premium Back Term Insurance Plans


These provide for a refund of all the premiums paid, in the event of the life assured surviving to the end of the policy term.

Premium paying term

The duration for which the premium amount has to be paid.

Policy

 it is a legal document that has the details regarding your insurance.

Policy Bond

it is a legal document that has the details regarding your insurance and the terms and conditions of the policy.

Policy Year

It is the duration between policies anniversary dates

Reinstatement


The restoration of a lapsed policy to in-force status. Reinstatement can only occur after the expiration of the grace period.


Risk

For risk assumption purposes, death is viewed as a contingency. That is, although death is certain, its timing is unknown. The process of evaluating and selecting risk is known as underwriting. All insurances cover major risks.

Risk cover

Although death is certain, its timing is unknown. The process of evaluating and selecting risk is known as underwriting. All insurances cover major risks.

Salary Saving Scheme


This scheme provides for payment of premiums by money deduction from the salary of the employees by one employer.


Sub Standard Risk


The person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of the disease, occupation, residence in unhealthy climate or dangerous habits.


Surrender Value


The value payable to the policyholder in the event of his deciding to terminate the policy before the maturity.


Survival Benefit


The payment of sum assured to the incurred person.

Term Insurance

Term Insurance is a type of life insurance where the insured buys coverage for a specified period of time and if the insured person expires during the term of the policy, then the death benefit is payable to the nominee.

Term insurance for NRIs

Term Insurance for NRIs is a type of life insurance where the insured buys coverage for a specified period of time and if the insured person expires during the term of the policy, then the death benefit is payable to the nominee.

Term

The Term is the period for which insurance coverage is given.

Term policies

Is a type of life insurance where the insured buys coverage for a specified period of time and if the insured person expires during the term of the policy, then the death benefit is payable to the nominee.

Travel Insurance


Insurance to cover problems associated with travelling generally including trip cancellation due to illness lost luggage and other incidents.

Vesting Age


The age at which the receipt of pension starts in an insurance-cum-pension plan.


Whole Life Policy


Premiums are paid throughout the lifetime of the life assured. This can be with profits or without profits

With-Profit policy


Policies entitled to the bonus, which is paid at the time of claim-death or maturity


Without-Profit policy


These policies are not entitled to participate in bonuses.

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