Insurance Glossary

Accident

An accident is an unforeseen event or occurrence causing damage or injury to a person

Age Limit

It is the stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew insurance policies.

Agent

An insurance company representative who sells and services life insurance contracts for the insurer; He is an intermediary between the insurer and the policyholder

AnnuityA contract sold by a life insurance company that provides fixed or variable payments to a recipient, either immediately or at a future date. Plan

An insurance contract that provides for an income for a specified period of time, such as a number of years or for life

Application/Proposal Form

This is to be filled by the insurance company’s agent and sometimes a medical examiner including information given by the proposer. In addition, it has to be signed by the proposer. It is one of the primary steps to get an insurance policy.

Assignment

An assignment is a legal transfer where a policyholder can transfer his interest to another. It can be made by an endorsement on the policy document or by a separate deed. Assignment can be either Conditional or Absolute.

BeneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured.

The beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. is the person or entity, named in the policy as the recipient of the life insurance benefit in the event of policyholder's death.

Coverage

The amount of protection that the policyholder will receive based on the terms of the policy.

ExclusionsSpecific conditions or circumstances listed in an insurance policy for which the policy will not provide benefit payments.

These are stipulated in a policy as what will not fall under the insurance policy and hence will not provide benefit to the insured or beneficiaries.

Fiduciary

A fiduciary is a person who has been legally trusted by a beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured.. For example, if a beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. legally documents that someone will act on his behalf when required.

Grace Period

Policy holders are expected to pay their premiumA regular payment made to the insurance company to keep the policy in force. on time. However, a certain additional period is given to the insured. During this additional period, or grace periodPeriod of time after the due date of a premium, during which the policy remains in force., the policyholder is allowed to pay the premiumA regular payment made to the insurance company to keep the policy in force. without any interest. Therefore it is a specified period after a premiumA regular payment made to the insurance company to keep the policy in force. payment is due, in which the policyholder may make such payment, and during which the protection cover of the policy normally continues.

Insurable Interest

This means that the insured, or the beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. who receives the policy benefits, must necessarily suffer an emotional or financial loss if an unforeseen or untouched event occurs. Without insurable interest an insurance contract stands invalid.

InsurabilityAll conditions that affect an individual’s health, susceptibility to injury and life expectancy; an individual\'s risk profile.

InsurabilityAll conditions that affect an individual’s health, susceptibility to injury and life expectancy; an individual\'s risk profile. means all conditions that affect the health, susceptibility to injury and life expectancy of an insured.

Insurance

It is to indemnify the insured, or beneficiaryA person(s) designated by the policy owner to receive the proceeds of an insurance policy upon the death of the insured. on the death of the insured, as protection against unforeseen circumstances. (A system under which individuals, businesses, and other entities, in exchange for a monetary payment (a premiumA regular payment made to the insurance company to keep the policy in force.), are guaranteed compensation for losses resulting from certain perils under specified conditions.)

Insured

The insured is the person who is covered in the insurance policy.

Lapsed Policy

A policy which has been terminated for non-payment of premiumA regular payment made to the insurance company to keep the policy in force.s. A policy lapses usually when the premiumA regular payment made to the insurance company to keep the policy in force. due is not paid even after the grace periodPeriod of time after the due date of a premium, during which the policy remains in force..

Maturity Date

The maturity date is the date when the amount paid towards the life insurance policy is given to the policy holder once the term of the policy ends.

Maturity ClaimNotification to an insurance company that payment of an amount is due under the terms of the policy.

The amount given to the insured at the end of the maturity period is called the maturity claimNotification to an insurance company that payment of an amount is due under the terms of the policy..

Moral Hazard

An insurance policy is based on the need for insurance, the health and personal habits of the insured, the insured’s standard of living and income. The moral hazard is the decision of the insurance company to accept the risk and issue a policy after taking the factors mentioned above into consideration.

Nomination

This is when the policy holder or insured officially authorises another person to receive any monetary benefits of the policy. The authorised person is the NomineeA person or firm into whose name the policy is transferred in order to facilitate transactions, while leaving the customer as the actual owner..

PremiumA regular payment made to the insurance company to keep the policy in force.

The amount paid by the insured, either in lump sum or in periodic amounts, to the insurance company under the life insurance policy.

ReinstatementPutting a lapsed policy back in force by producing satisfactory evidence of insurability and paying the required past due premiums.

ReinstatementPutting a lapsed policy back in force by producing satisfactory evidence of insurability and paying the required past due premiums. of a policy is the act of putting a lapsed policy back into force, after the grace periodPeriod of time after the due date of a premium, during which the policy remains in force. has expired. The company may require evidence of insurabilityAll conditions that affect an individual’s health, susceptibility to injury and life expectancy; an individual\'s risk profile. and will always require the insured to pay the total amount of overdue past premiums.

Surrender Value

The surrender value it the amount paid to an insured who wishes to terminate the policy before its maturity date.

VestingProcess by which authority, benefit, privilege, or rights to or interest in an insurance policy, passes unconditionally to a particular entity. Age

The age at which the insured starts receiving a pension from the insurance company in an insurance-cum-pension policy.

NOTE: The above definitions are only explanatory in nature. If any of the above terms have been defined in the policy contract, then the policyholder should consider the definition as specified under the policy contract.

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