Crucial Insurance Terms Every Policy Owner Must Know
Insurance terms and jargons make insurance a complicated subject for people who wish to purchase insurance, which is why they end up relying upon insurance agents for making a good decision. Come to think of it, when a person is not aware of the insurance lingo, this seems to be the only option to take a sensible insurance decision. With that said, is getting familiar with insurance glossary really that strenuous a task? If we were to have a say, then we would say “No, not at all”, and we mean it.
The knowledge of the most basic insurance terms isn’t as herculean a task as it is made out to be, and can help you take a much wiser decision in terms of buying the insurance that is best suited to your needs.
Take note of these terms, so that the next time you buy or renew any insurance policy, you’ll be making a well-informed choice.
- Accident: Accident refers to the unforeseen, violent, or involuntary event that causes injuries to a person or his asset.
- Additional benefit: Accidental benefit is given by the insurance company to the insurer (or the person whose life is assured as per policy terms) in case of death or total and permanent disability as per the details specified in the policy plan.
- Allowable charge: Allowable charge is applicable mainly for health-based insurances. The allowable amount is the permissible amount that an insurer can claim for particular medical services from his health insurance provider.
- Appointee: An Appointee is a person who acts as a caretaker of the policy benefits for the nominee until he attains the age of 18 years.
- Bodily Injury: Bodily injury refers to a physical injury that is verified by external wound signs such as contusion, bruise or wounds.
- Cover: Cover is another term to denote insurance. The term ‘cover’ is also used to state the amount of insurance.
- Date of risk commencement: The date of risk commencement is the date from which the assured death benefits are activated as specified in the policy schedule.
- Death benefit: Death benefit refers to the sum payable upon the death of the insured person.
- Dependent: Dependent refers to the individuals who depend upon the primary insurer for their daily living. Certain insurance policies also cover dependents along with the primary individual.
- Lock-in period: Certain insurance policies also come with investment benefits. These dual benefit insurance policies have a condition of the lock-in period. According to this, during the lock-in period, the investor/insurer is not allowed to withdraw the invested amount.
- Maturity benefit: Maturity benefit, applicable to life insurance, is received by the insurer when the insurance policy has matured. Maturity benefit is the amount payable to the insurer on the maturity date of the plan.
- Nominee: Nominee refers to the person who is entitled to receive the policy benefits in the situation when the policy owner meets an unforeseen event and dies.
- Regular premium: Regular premium is the amount that the insurer pays to the insurance company on a regular basis as specified in the insurance terms & conditions.
- Single premium: Single premium is the one-time payment to be paid to the insurance provider as specified in the policy terms before the plan commencement date.
- Sum assured: Sum assured is the promised amount of money (as specified in the policy plan) that insurance providers pay to the insurer upon maturity or unforeseen occurrence.
**To understand exactly about the policy coverage, exclusions etc read the Policy Wordings carefully.**