Commonly Used Insurance Terms

Accident	An event or series of events, which are violent, unforeseen, involuntary, external and visible in nature and which causes bodily injury.
Additional benefit	The benefit which becomes applicable on the Death or Total and Permanent Disability of the life assured as specified in the plan
Age	Age as on his/her last birthday.
Appointee	The person who receives the proceeds or the benefits under the plan when the nominee is less than 18 years of age.
Appreciate	To grow in value
Asset	Everything owned or due to a person.
Asset allocation	How your investments are spread across various asset classes.
Benefit illustration	An illustration of the benefits under unit linked insurance plans provided to you at the time of application.
Bodily injury	An injury which is evidenced by external signs such as contusion, bruise or wounds except in cases of drowning or internal injury.
Budget	It is a tool used to monitor and control expenditures and purchases.
Charges	Any fee that may be levied by the insurance company from time to time under this plan with the prior approval of the Regulatory Authority.
Compound interest	Interest computed on principal plus interest accrued during the previous periods of the investment.
Corpus	The amount of money available with a scheme for investing. If already invested, the corpus is the current value of the scheme’s portfolio.
Cost averaging	A strategy that involves investing a fixed amount of money in an asset class like equity, so that the average cost of acquiring the asset in the long term is much lower than that in the short term.
Cover	Another word for insurance; it also refers to the amount of insurance.
Date of risk commencement	The date from which the death benefit is activated under the plan as specified in the plan schedule .
Death benefit	The amount which is payable on the life assured’s death .
Discontinuance of plan	Terminating or cancelling or stopping the plan prior to the plan maturity date. Discontinuance of a plan will occur in case of non-payment of the premium due before the expiry of the notice period or if you wish to discontinue the plan.
Equity	The actual ownership interest in a specific asset or group of assets.
Financial planning	It covers the essential elements of a person’s financial affairs and is aimed at achieving a person’s financial goals.
Fund	Each specific and separate investment fund established, offered, operated and managed by us.
Fund value	The total value of the units in all the funds invested in by you at the valuation date. The value of the units in each fund on the valuation date is calculated as– (Number of units held by you in that fund) X (Corresponding unit price of that fund at the valuation date) The fund value is the sum of the value of the units in all the funds that you have invested in, as on the valuation date.
Investment risks	The risks that your investments face. These include the risk of interest rate fluctuations impacting your debt investments or the prices of equities going down.
Investments	Assets like fixed deposits, post office savings, bonds and stocks that are acquired for the purpose of earning a return.
Life assured	The person named in the plan schedule and, on whose life the plan depends. On the life assured’s death, the benefit is paid out by us and the plan ends.
Limited premium	The amount which is payable by you during the premium paying term at regular intervals for a limited period as specified in the plan schedule.
Liquidity	The quality of assets that can be easily and quickly converted into cash without any, or significant, loss in value.
Lock-in period	The period of time for which investments made in an investment option cannot be withdrawn.
Maturity benefit	The amount payable to you on the plan maturity date
Nominee	The person nominated by you to receive the death benefit .
Plan commencement date	The date on which the plan starts as shown in the plan schedule.
Partial withdrawal	Any amount withdrawn by you during the plan term.
Plan maturity date	The date on which the plan term expires as specified in the plan schedule.
Plan term	The period which commences on the plan commencement date and ends on the plan maturity date as specified in the plan schedule.
Plan year	A period of 12 consecutive months commencing from the plan commencement date and ending on the day immediately preceding its annual anniversary and each subsequent period of 12 consecutive months thereafter during the plan term. Example: If the plan commencement date is 18th December, 2010 the first plan year would be: 18th December, 2010 to 17th December, 2011.
Premium paying term	The number of years, during which you will pay the regular or limited premium as specified in the plan schedule.
Proposal form	The application form completed and submitted by you based on which the insurance plan will be issued to you.
Regular premium	The amount which is payable by you during the plan term at regular intervals as specified in the plan schedule.
Regulations	The applicable laws as amended from time to time which are applicable to the plan, its funds, the valuation of investments and other assets.
Regulatory authority	The Insurance Regulatory and Development Authority or such other authority or authorities, as may be designated/appointed under the applicable laws and regulations as having the authority to oversee and regulate life insurance business in India.
Settlement option	The option to receive your maturity benefit in installments over a period of time instead of a lump sum amount on the plan maturity date
Single premium	The amount that has been received by the insurance company as specified in the plan schedule before the plan commencement date.
Sum assured	The amount of cover taken under a life insurance plan. It is the minimum amount that will be paid on the life assured’s death during the plan term and is specified in the plan schedule.
Switch	The facility, under the plan by which you can move some or all your units from one or more funds to another fund of this plan.
Total and Permanent Disability	A disability, which - is caused by bodily injury resulting from an accident, and occurs due to the said bodily injury, directly and independently of any other causes, and occurs within 180 days of the occurrence of such accident, and completely, continuously and permanently prevents the life assured from engaging in any work, occupation or profession and to earn or obtain any wages, compensation or profit, and such condition persists for at least 6 months from the date of onset of such Total and Permanent Disability. For the purposes of this definition, the loss of both arms (physical severance of the arm at or above the wrist), or the loss of both legs (physical severance of the leg at or above the ankle), or of one arm (physical severance of the arm at or above the wrist) and one leg (physical severance of the leg at or above the ankle), or loss of both eyes (total and irrevocable loss of sight of both eyes), will be considered Total and Permanent Disability, without prejudice to other causes of Total and Permanent Disability, provided that: the loss referred to - is caused by bodily injury resulting from an accident, and occurs due to the said bodily injury, directly and independently of any other causes, and
Unit	Your notional interest in a fund. Each unit represents one undivided share in the assets of a fund. You may have units in more than one fund.
Unit price	The price per unit. It is calculated in Rupees as – (Net Asset Value (NAV) at the valuation date) / Total number of units held in the fund at the valuation date.
Valuation date	The date on which the unit price of the fund is determined.
Waiting period	The 6 months following the date of onset of Total and Permanent Disability due to accident of the life assured. The additional benefit specified in the plan becomes payable only after the completion of the waiting period.