Life Insurance
Learn important insurance terminology that can help you navigate life insurance policies with ease.
A
Accident Benefit:
An additional benefit that provides extra payout or a premium waiver in case of accidental disability, as specified in the policy.
Age Limits:
The minimum and maximum ages at which a person can buy or renew a policy.
Annuity Plans:
Life insurance plans that provide regular income, usually after retirement.
Application Form:
The form completed by an applicant to provide information required for obtaining insurance coverage.
B
Beneficiary:
The person or entity designated to receive the policy benefits upon the death of the life assured
Business Insurance:
Insurance that protects a business against financial losses arising from specific risks, including the loss of key personnel.
C
Cancelable Policy:
A policy that may be cancelled by the insurer or the policyholder according to its terms
Coinsurance:
The risk of a large-scale loss caused by events such as floods, earthquakes, or storms.
Convertible Whole Life Policy:
A whole life policy that can be converted into an endowment policy after a specified period
Coverage:
The protection and benefits provided under an insurance policy.
D
Days of Grace:
An additional period allowed after the premium due date during which the policy remains in force.
Deferment Period:
The period between purchasing a pension plan and the start of pension payments.
Double/Triple Cover Plans:
Life insurance plans that provide two or three times the basic sum assured in the event of death during the policy term.
E
Endowment Policy:
A life insurance policy that pays the sum assured on death during the policy term or on survival until maturity.
Excess and Surplus Insurance:
Insurance that provides coverage for risks that are unusually large or not typically covered in the standard insurance market.
F
Facultative Reinsurance:
A type of reinsurance where the reinsurer has the option to accept or reject each risk individually.
Family Insurance:
A policy that provides life insurance coverage for multiple family members under a single contract.
Fiduciary:
A person who is entrusted to act in the best interests of another person.
Fire Insurance:
Insurance that covers losses or damage caused by fire and related risks.
Franchise Insurance:
A form of insurance offered to members of a group, association, or employer under a common arrangement.
G
Guaranteed Insurance Sum (GIS):
Insurance that covers loss of or damage to glass and related fixtures.
Gross Insurance Value Element (GIVE):
A serious failure to exercise reasonable care, showing reckless disregard for consequences.
Group Life Insurance:
Life insurance coverage provided to a group of people under a single master policy.
Guaranteed Policies:
Policies that provide fixed and guaranteed benefits as specified in the policy terms.
I
Indemnity:
Insurance that covers certain expenses incurred as a result of identity theft.
Insurable Interest:
Compensation provided for a loss through payment, repair, or replacement.
Insurability:
The extent to which a person qualifies for insurance based on factors such as age, health, lifestyle, and risk profile.
J
Joint Life Endowment Assurance Plans:
Life insurance plans that cover two lives and pay benefits on death or maturity, depending on the policy terms.
K
Keyman Insurance Policy:
A life insurance policy taken by a business on the life of a key employee whose loss could significantly affect the business.
L
Lapsed Policy:
A policy that has ceased to be in force due to non-payment of premiums.
Limited Payment Life Policy:
A life insurance policy where premiums are paid for a limited period, while coverage continues for the insured’s lifetime.
Life Assured:
The person whose life is covered under a life insurance policy.
Loyalty Additions:
Additional benefits that may be paid by an insurer at maturity, based on the policy’s performance and terms.
M
Maturity:
The date on which a life insurance policy term ends and the maturity benefit becomes payable.
Maturity Claim:
The amount payable to the policyholder when the policy reaches its maturity date.
Misrepresentation:
Providing false, inaccurate, or misleading information when applying for or maintaining an insurance policy.
Money Back Policy:
A life insurance policy that provides periodic payouts during the policy term and a final benefit at maturity
Moral Hazard:
A risk factor arising from a person’s behaviour, habits, or circumstances that may increase the likelihood of a claim.
N
Nomination:
The process of appointing a person to receive the policy benefits in the event of the policyholder’s death.
Non-Cancelable Policies:
Policies that remain in force as long as premiums are paid, and cannot be cancelled by the insurer under the stated terms.
P
Premium:
The amount paid by a policyholder to maintain insurance coverage.
Premium Back Term Insurance Plans:
Term insurance plans that refund the premiums paid if the life assured survives the policy term.
R
Reinstatement:
The restoration of a lapsed policy to active status after meeting the insurer’s requirements.
Risk:
The possibility of a future event that may result in a claim or financial loss.
S
Salary Saving Scheme:
A premium payment arrangement where premiums are deducted directly from an employee’s salary.
Sub Standard Risk:
A person considered to have a higher-than-average insurance risk due to health, occupation, lifestyle, or other factors.
Surrender Value:
The amount payable if a policyholder voluntarily terminates a policy before its maturity date.
Survival Benefit:
A payment made to the policyholder at specified intervals during the term of certain life insurance policies.
V
Vesting Age:
The age at which pension or annuity payments begin under a retirement plan.
W
Whole Life Policy:
A life insurance policy that provides coverage for the insured’s entire lifetime, subject to policy terms.
With-Profit Policy:
A policy that participates in the insurer’s profits through bonuses declared from time to time.
Without-Profit Policy:
A policy that does not participate in the insurer’s profits and is not eligible for bonuses.