A sudden and unintentional happening leading to a loss. In the context of life insurance, it is a sudden and unforeseen happening that causes disability or death of the policyholder.
Accidental Death Benefit
An add-on benefit in which the benefit is payable in the event of death of the life insured as a result of an accident provided he has opted for this benefit.
The time interval between the commencement of the policy and the time when benefits are paid out. It is established by the insured.
AA professional with expertise in technical aspects of insurance. An actuary is a statistician and mathematician by training.
Actuarial Cost Method
A method that determines contributions that would be made under an insurance plan.
Agent (Life Advisor)
A representative of an insurance company authorised to sell insurance policies.
The maximum and minimum ages above or below which an insurance company will not accept applications for insurance from or will not renew a policy with a person.
The person who will receive annuity benefits at stipulated intervals of time, such as yearly/half yearly/quarterly/monthly intervals.
The amount paid under an annuity scheme at stipulated intervals, such as yearly/half yearly/quarterly/monthly intervals.
An insurance contract that provides an annuity for a certain number of years, irrespective of whether the insured is alive or dead.
The payment that an annuitant makes for an annuity.
The person to whom the benefits of the life insurance policy are assigned.
A transfer of the rights and benefits of an insurance policy from one person to another.
The Insurance Regulatory and Development authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999.
The person who receives the benefit of a policy in case of death during the term or the policyholder who receives the benefit on maturity.
The time for which an insurance company covers the designated insured or dependents for the benefits.
Bonus is the amount added to the basic sum assured under a with-profit life insurance policy.
This is the price at which you enter a fund, based on the market value per unit, increased by the relevant trading costs associated with buying the assets.
During the term of the plan, your financial requirements could change. And you may want switch between funds. Your units in the fund would be sold at the selling price and other units bought at the buying price as per your instructions.
A request for payment of the contractual benefits by the insurer that is made by the insured or the beneficiary.
When an applicant withholds critical information from the insurance company, it is called concealment. For instance, if the applicant is suffering from a terminal disease and he does not notify the company of this, he is concealing information.
Dating Back or Back Dating is an option that allows the assured to get the benefits of lower age by commencing the policy from a date earlier than the date on which the proposal form was signed. Back Dating is permissible only within the same financial year.
The benefit received by the beneficiary (ies) on the death of the insured.
A plan in which the amount is paid to a policyholder if he outlives the tenure of the contract or to the beneficiary if the insured person dies before the date on which the policy matures.
Free look period
A free look period gives the client an option to review the terms and conditions of the policy within 15 days from the date of receipt of the policy document. Where he/she disagrees with the terms and conditions stated in the policy, he/she has the option to return the policy, stating the reasons for objection. In such a case the policy would then be cancelled and the premium paid by the client would be refunded to him, after deducting – proportionate risk premium for the period on cover, expenses incurred by the insurance company on medical examination of the client and stamp duty charges.
Group Life Insurance
Life insurance of a group of people under a policy. This group should already be in existence and should not have come together only for the purpose of insurance.
Human Life Value
The present value of the family's share of the breadwinner's future earnings is considered as Human Life Value, for purposes of life insurance.
The acronym for the Insurance Regulatory and Development Authority of India – the apex body overseeing the insurance business in India. It protects the interests of the policyholders, regulates, promotes and ensures orderly growth of the insurance industry and for matters connected therewith or incidental thereto.
The termination of an insurance policy due to non-payment of premia.
Last Birth Day (l.b.d)
Age at last birthday.
Level Premium Life Insurance
Life insurance for which the premium remains unchanged year after year.
Permission granted by IRDAI to the applicant for commencement and operation of the insurance business in India.
A contract provided for the payment of a sum of money to the person assured or failing him, to the person entitled to receive the same, on the happening of certain event for the consideration. Here, sum of money refers to sum assured/benefits, certain event refers to contingent event and consideration refers to premium.
An agreement with the company by which a person, firm or company is entitled to the management of the whole affairs of a company under the control and direction of the directors unless provided for in the agreement, and includes any person, firm or company occupying such position by whatever name called.
The date on which the policy term expires.
Money Back Plan
A plan in which part of the sum assured is paid back to the policyholder at regular intervals.
A provision by which a policyholder can designate any person to receive the policy money in the event of his death.
A person selected by the policyholder to receive the benefit in case of death of the life insured.
Non Forfeiture Option
A clause whereby the insurers do not generally forfeit all the premia paid, in case of a lapse of policy. This benefit is accorded to policy holders because of higher premia paid during the early years and the interest earned on these premia by the insurance companies.
Non Participating policies
These are also called "non-par policies" or"policies without participation in profits". These policies are not entitled for any share in surplus (profits) during the term of the policy.
An individual who cannot be granted a policy under normal rates of premia.
These are also called "par policies" or "policies with participation in profits". These policies are not non-par policies and are entitled for any share in surplus (profits) during the term of the policy.
The person who owns the policy, in this case, a life insurance policy.
The amount paid by a policyholder to the insurance company, in order to be covered under a policy.
A potential new customer who can be approached for buying an insurance policy.
To restore the policy after the insurance policy has lapsed.
The transfer of part or whole of the risk by the original insurance company to one or more reinsurers.
An add-on benefit available at the option of the policyholders that may alter certain features of a policy by increasing or restricting benefits.
In accordance with the Insurance Act, 1938, any place under the latest census, which has
- A population of not more than five thousand
- A density of population of not more than four thousand per square kilometre and
- At least 75 per cent of the male working population is engaged in agriculture.
This is the price at which you can sell units, based on the market value per unit, less the relevant trading costs associated with selling the assets.
In accordance with the Insurance Act, 1938, this includes the unorganised sector, informal sector, economically vulnerable or backward classes and other categories of persons, both in rural and urban areas.
A value payable if you want to surrender the plan before a claim arises.
The tenure of the policy.
A type of life insurance where the sum assured is payable only in the event of death of the insurer during the specified term. In the case of survival, the contract expires and the premium is not paid back to the insured.
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