Terminologies of Insurance:

Terminologies of Insurance:

            There are many terminologies and jargons normally used by the agents, brokers and bankers which are very helpful to understand the insurance policies and the operations related to them. These terminologies helps us to understand the whole processes.

            Insurance:

That protect us from the uncertainties of life events. It protect us and our families form the harms of these events which badly damage our life through uncertain events.

            Insurer:

Insurer are the companies which offer their insurance policies and people purchase their policies.

            Insured:

Insured is the policy holder in who’s name the policy is purchased is called the             insured.

            Premium:

This is the amount which one pays to the insurance company to purchase an insurance policy. In an insurance agreement  the risk is transferred from the insured to the insurer for which the latter charges an amount called premium. The payment can be made in a lump sum or periodically at regular intervals, depending on the scheme. Premium amount depends on some variables like age, employment types, medical condition etc.

            Sum Assured:

It is the amount of sum which an insurer agreed to pay before any bonuses are added. Sum assured is the guaranteed amount the policyholder or the nominee will receive. Mostly this is also known as the amount which the policyholder deposits to cover his agreed amount till the maturity period.

            Maturity Value:

Maturity value is the amount that insurance company will pay to the policyholder after competition of period with the agreed matured value.

            Bonus:

An extra amount, that is accumulated to any insurance policy on a yearly basis. That will pay to the policyholder on the maturity of the plan or in the case of his death. This gets paid on successful maturity period with all premium periods amounts. Bonuses can either be with a profit bonus or a guaranteed bonus.

            Term:

A total tenure of the plan which a policyholder take or agreed to pay. Means a insurance policy for 15 years- term.

            Term Plan:

That is a type of insurance policy, in which insurer provides the policyholder with protection only. If the policyholder dies within the policy term, his nominee gets the sum insured. If he lived beyond the specified period, the policyholder gets nothing at the end of the term. This is the cheapest and most basic type of life insurance plan available in the markets.

            Endowment Plan:

That is an policy in life insurance contracts which is designed on the basis of lump sum payment after an agreed  specific term  or on the death. Normally maturities are ten, fifteen or twenty years up to  certain time period limits. In some policies cases the payment is done only in the case of serious illness.

            Rider or Add-ons:

It is an optional feature that can be added to a policy for enhanced cover this comes with an  additional cost for the benefits availed.

            Annuity:

It is a fixed sum of money which is paid to some each year, typically for the rest of their life. A form of insurance or investment entitling the investor to a series of annual sums.

            Surrender Value:

That means the amount payable to a person who surrenders a life insurance policy.

            Survival Benefit:

This is the actual amount received at the end of your policy tenure. These are generally fixed and predetermined amounts. This applies only in the case the insured is alive.