Insurance Jargon - iflwebportal
A person who compiles and analyses statistics to calculate & manage insurance risks and premiums.
Life assured is the person whose life is insured by the life insurance company.
A policy which has been terminated for non-payment of premiums. A policy lapses usually when the premium due is not paid even after the grace period.
Amount payable on death of the life insured.
LUMP SUMP BENEFIT
A benefit arising in the form of a single, once - and - for - all payment rather than a series of payments.
Incentives given by an insurer as an additional benefit to the insured for keeping the policy in full force throughout the term of the contract. Rates are determined by the insurer on the basis of its performance.
Life Insurance is the contract between a policyholder and the insurer, where the insurer promises to pay the nominee / beneficiary a sum of money upon death of the insured.
Also known as Key Person Insurance. The cover is designed to protect or compensate a business in the event of the death or incapacity of an important employee regarded as crucial to that organisation.
An insurance contract where two people are insured under one policy.
The acronym for Insurance Regulatory and Development Authority of India. It is an apex body overseeing the insurance business in India. It protects the interest of the policyholder, regulates, promotes, and ensures orderly growth of the insurance industry in India.
Insurance is to indemnify the insured, or beneficiary on the death of the insured, as protection against unforeseen circumstances.
The characteristic of being acceptable for insurance is called insurability. The insurability of an individual or object is ascertained depending upon the norms and policies of the insurance company. The sum of all conditions and circumstances pertaining to the insurance applicant, such as health, life expectancy, risk profile, and susceptibility to injury are judged according to the insurance company's requirements or standards to find out if the individual is insurable.
A period of time after the premium due date in which a policyholder is able to make a premium payment without the insurance policy coverage lapsing. It is a specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection cover of the policy normally continues.
Freelook period gives an individual the option to review the terms and conditions of the policy for 15 days from the date of receipt of the policy document. If he/ she disagrees with the terms and conditions stated in the policy, he/she has the option to return it, stating the reasons for objection. In such a case, the policy would be cancelled and the premium paid would be refunded to him / her by the insurance company, after deducting the expenses incurred on medical examination, stamp duty charges and other charges. For policies sold through distance marketing, the freelook period is 30 days.
A condition under which the benefits are not paid is referred to as exclusion. This is to avoid any misunderstanding of the terms of the policy.
A plan in which the amount is paid to a policyholder if he/she outlives the tenure of contract or to the beneficiary if the insured person dies before the date on which the policy matures.
The amount payable to the beneficiary on the death of the life assured.
DATE OF MATURITY
The last date on which the insurance policy is valid.
DATE OF COMMENCEMENT
The date at which the policy begins, following the acceptance of risk by the insurer.
An insurance claim is a formal request by the beneficiary or nominee or the legal heir of a life insurance policy to an insurance company asking for the payment based on terms of the policy. The insurance company reviews the claim for its validity and then pays out to the insured or requesting party (on behalf of the insured) once approved.
The beneficiary is the person or entity, named in the policy as the recipient of the life insurance benefit in the event of policyholder's death.
It refers to the sale of insurance products through Bank’s distribution channels.
Assignment is the transfer of rights in an insurance policy from one person to another. It is a means whereby the beneficial interest, right and title under a life insurance policy gets transferred from assignor (Policyholder) to assignee.
An insurance contract that provides income for a specified period of time, such as a number of years or for life.
An insurance company representative who sells and services life insurance contracts for the insurer; he/ she is an intermediary between the insurer and the policyholder.
Survival benefits are benefits given to the policy holder during or upon completion of the policy tenure. In the case of money back policies, a certain pre-determined amount is paid to the insured after regular intervals. Survival benefit applies only in a case where the insured is alive.
The Payment to the policy holder at the end of the stipulated term of the policy is called maturity claim.
Surrender value is the amount payable to the policyholder on surrendering his right under a policy and terminating the contract of insurance.
The act of cancelling an insurance contract before it becomes payable or reaches its maturity date for a surrender value.
Sum Assured is the amount that an insurer agrees to pay on the occurrence of a stated contingency.
It is the tax levied while buying shares and other assets such as a house or life insurance policy.
MASTER POLICY HOLDER
Policyholder in case of group policies.
WHOLE LIFE INSURANCE
A life insurance policy where benefits are payable to the beneficiary on the death of insured, whenever that occurs. The premium payment can happen for a specified number of years or throughout life.
The age at which the insured starts receiving a pension from the insurance company in an insurance-cum-pension policy.
A type of long-term savings plan where premiums are used to buy units in an investment fund such as a unit trust. The assets in the fund can be a mix of stocks, shares, bonds, property and other securities. The value of the units and the return from them can fluctuate in line with the investment performance of the assets in the fund and there is no guarantee on the amount of capital that will be returned.
Underwriting is a term used by life insurers to describe the process of assessing risk. Underwriting of a risk involves consideration of material facts on the basis of which a decision will be taken whether to accept the risk and if so at what rate of premium.
Underwriters accept or reject risks on behalf of the insurance company. The underwriter reviews the applications and decides whether to offer insurance to the applicants (that is, whether to accept or reject the risk).
Top-up is the additional amount over and above the premium that the policyholder can invest to gain from the performing market. This can be done only under unit linked policies, provided the feature is available with the policy.
Term insurance plan is a form of life cover, it provides coverage for a defined period of time, and if the insured expires during the term of the policy then a death benefit is payable to nominee.
A lump sum contribution towards the life insurance policy
Riders are add-on options available to the policyholder that provides additional benefits.
The application form that needs to be completed for securing an insurance policy.
PREMIUM PAYMENT TERM
Period for which one is committed to pay towards one’s insurance cover.
A document issued to the policyholder by the insurer stating the terms and conditions, product information and benefits, premium schedule etc.
The amount paid by the insured, either in lump sum or in periodic amounts, to the insurance company under the life insurance policy.
The period for which insurance cover is available.
The person who owns the insurance policy.
These are also called as “par policies” or “policies with participation in profits”. A participating life insurance policy is a policy that receives bonus payments from the life insurance company.
PAID UP POLICY
It is an insurance policy that requires no further premium payments but continues to provide coverage as per the paid up value calculated.
Nominee is the person selected by the policyholder to receive the benefit in case of death of the life insured. It thus gives a valid discharge to the insurer on settlement of claim under a life insurance policy.
A legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. The lender's security interest is recorded in the register of title documents to make it public information. This information is voided when the loan is repaid in full. Virtually any legally owned property can be mortgaged, although real property (land and buildings) are the most common.
The probability of death of a life or a group of lives.
The probability of sickness or disability of a life or group of lives.
Moral Hazard is said to exist in the case where we notice the absence of a genuine need for the life insurance or when the proposal for insurance is submitted by an individual beyond his means.
Money Back Plans
In a money back plan, the insured person gets a percentage of the sum assured at regular intervals, instead of getting the lump sum amount at the end of the term.