| Actuary |
A specialist in the mathematics of
insurance who calculates rates, reserves, dividends and other statistics.
|
| Annuity |
Annuity refers to a series of payment payable
to a person (annuitant) annually. |
| Bonus |
The amount of profit which a life insurance company
distributes among its policyholders. |
| Claim
|
A claim, in the life insurance context, is a request
made to a life insurance company to pay the benefit in the event of
the policyholder's death. |
| Death Benefit |
A death benefit, in the life insurance context,
is the amount payable to the claimant in case of death of a life insured.
|
| Endowment |
A form of life insurance in which the life insured
is covered for a sum payable on death of the life insured during a
particular term or his or her survival to the end of the term. |
| Lapsed Policy |
A policy where second year premium is not paid
becomes lapsed and no claim whatsoever is valid against a lapsed policy. |
| Life Insurance Agent |
A life insurance agent is the name given to those
who are licensed to sell life insurance. He analysis the insurance
needs of individuals and families and advises them about appropriate
life insurance policies. |
| Life Insurance Company |
A life insurance company, in life insurance terminology,
is a company that assumes the risk and expenses in the event of a
policyholder's death. |
| Life Insured |
The life insured refers to the person whose life
is insured against a life insurance policy. It is in the event of
the death of the life insured that the death benefit is paid out to
the nominee. |
| Mortality Rate |
Mortality rate is a statistic that shows the total
number of deaths (typically per thousand people) within a certain
demographic group of people. If you are in a group with a high mortality
rate, e.g., people who have been habitual smokers for more than thirty
years, your life insurance premiums will likely be higher than people
who have not been long-term habitual smokers will. |
| Mortgage Insurance |
Mortgage insurance is life insurance in which
the total value of the death benefit decreases annually. Mortgage
insurance is also known as decreasing term life insurance. |
| Nominee |
A nominee is a family member or other person that
a policyholder has designated as the recipient of the pay out from
a life insurance policy in the event of his or her death. A policyholder
can nominate more than one person as nominee and specify their respective
shares. |
| Non-medical Scheme |
A facility in which the insurance company issues
insurance policy without carrying out medical and other clinical examinations
upto certain age and sum insured limits. |
| Policy |
The policy is the legally binding life insurance
agreement that spells out the responsibilities of both the insurance
company and the life insured. |
| Policy Illustration |
A policy illustration, also known as a projection,
is used to estimate life insurance cost, death benefit, and surrender
value in the future. A policy illustration is usually provided when
you are considering purchase of a life insurance policy. |
| Policy Loan |
A policy loan is a loan incurred when borrowing
against the surrender value of a life insurance policy. |
| Policyholder |
The policyholder is the person who has taken out
the life insurance policy. It should be noted that the policyholder
and the insured are not always the same. It is possible to take out
a life insurance policy on someone else's life. |
| Premium |
The premium is the amount of money that is payable
to a life insurance company in exchange for coverage. The amount of
the premium that you pay is determined by complex calculations that
are aided by mortality rate and other statistics. |
| Reinsurance |
In effect, insurance that an insurance company
buys for its own protection. The risk of loss is spread so a disproportionately
large loss under a single policy doesn't fall on one company. Reinsurance
enables an insurance company to expand its capacity; stabilize its
underwriting results; finance its expanding volume; secure catastrophe
protection against shock losses; withdraw from a line of business
or a geographical area within a specified time period. |
| Renewal |
The automatic re-establishment of in-force status
effected by the payment of another premium. |
| Reserve |
An amount representing actual or potential liabilities
kept by an insurer to cover debts to policyholders. A reserve is usually
treated as a liability. |
| Revival |
The process by which a lapsed policy is put into
in force status. Unpaid premiums, late fee and evidence of insurability
are required for revival of a policy. |
| Risk Management |
Management of the pure risks to which a company
might be subject. It involves analyzing all exposures to the possibility
of loss and determining how to handle these exposures through practices
such as avoiding the risk, retaining the risk, reducing the risk,
or transferring the risk, usually by insurance. |
| Supplementary Cover |
A supplementary cover is a special addition to
a life insurance policy that allows for extra benefits. A supplementary
cover will typically incur a higher premium. |
| Surplus |
The amount by which assets of a life insurance
company exceed its liabilities. |
| Surrender Value |
Surrender value is the cash value of a life insurance
policy that you receive if you terminate a life insurance policy.
|
| Term Insurance |
Term insurance is insurance that is temporary,
as opposed to endowment life insurance. Here the life insured is covered
only during the term of policy and does not get any maturity benefit.
|
| Three Payment Plan |
A form of endowment insurance in which 25% of
the sum insured is paid after expiry of 1/3rd and 2/3rd of the term
and remaining 50% is paid on expiry of whole term. |
| Underwriter |
An underwriter, in life insurance terminology,
is the person who assesses the proposed lives insured and determines
the premium to be charged depending on their risk classification.
|
| Whole Life Assurance |
Whole life assurance is the plan which provides
coverage for whole life of the life insured. The policy matures when
the life insured attains age of 85 years. |
| Whole Life with Limited Payment |
Whole Life with Limited Payment is a kind of life
insurance policy with fixed premiums for some length of time. Whole
Life with limited payment is typically more expensive than the conventional
whole life assurance, but the surrender value of such a policy can
build up fairly rapidly. |
| With Profit Life Insurance |
With Profit Life Insurance is a form of life insurance
that participates in the profits of the life insurance company and
the respective policyholders get their share in the form of reversionary
bonus. |
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