Life Insurance documents use several terms for who is covered, what is payable, and when the cover can end. Start with the policy schedule: identify the life assured, the death benefit, the policy term, the premium due dates, and the nominee. Then read each definition in the contract, because similar words can have different effects across plans.
What do policyholder, life assured, and nominee mean?
The policyholder owns the contract and is usually responsible for premiums. The life assured is the person whose death or survival triggers the relevant benefit. The nominee is the person designated to receive policy money after the policyholder’s death, subject to applicable law and any valid assignment. One person may occupy more than one role.
Check the name and relationship recorded in the schedule. A change in marriage, family circumstances, or contact information is a reason to review the nomination. A nominee is not automatically the person whose life is insured, and nomination should not be confused with transferring rights under the policy.
What are sum assured, death benefit, and maturity benefit?
Sum assured is a stated cover amount or a defined amount used to calculate benefits. The death benefit is the amount actually payable on an eligible death claim under the policy wording. It can differ from the headline sum assured. A maturity benefit, if provided, is payable when the policy reaches its stated maturity conditions. For example, a plan may specify a base sum assured and additional benefits governed by its schedule.
Do not assume every Life Policy has a maturity payout. A pure protection Term Plan generally pays on a covered death during the policy term and ordinarily has no maturity benefit unless a specific return of premium feature is written into that plan.
How are policy term and premium payment term different?
The policy term is the period for which the contract is designed to remain in force, subject to its conditions. The premium payment term is the period during which premiums are due. A limited pay policy can have a shorter premium payment term than its policy term. A single pay policy takes one premium. Read both dates before signing. Completing the premium payment term does not necessarily mean the policy has matured. Conversely, nonpayment while premiums are due can change cover or benefits under the policy conditions.
What do premiums, due date, and grace period mean?
A premium is the amount payable to maintain the policy according to its chosen mode. The due date is when an instalment falls payable. A grace period allows payment after that date while cover continues according to the applicable rules. IRDAI’s life product circular specifies 15 days for monthly mode and 30 days for quarterly, half yearly, or annual instalments.
Check your policy for how a claim during the grace period is settled and whether any unpaid premium is deducted. Set a payment reminder, and contact the insurer if a payment fails. Grace period is a short extension, not a permanent payment holiday.
What do lapse, paid up policy, and revival mean?
A policy may lapse after premiums remain unpaid beyond the grace period. Some eligible policies can instead acquire reduced paid up benefits, subject to the contract and applicable rules. Revival is the process of restoring a policy under the insurer’s stated conditions, which may include overdue premiums, interest, and evidence of insurability.
The result depends on policy type and premiums already paid. Do not assume a missed payment always erases every benefit, or that cover restarts automatically when money is paid. Request a written status and revival quotation from the insurer.
What are free look period and surrender value?
The free look period lets a new policyholder review the issued contract and request cancellation within the prescribed window. IRDAI’s 2024 life product circular gives 30 days from receipt of the policy document. Permitted deductions may apply. Surrender value is an amount payable on early termination only if the contract and applicable rules provide it.
A Term Policy commonly has no surrender value, while other products can follow different conditions. Before surrendering, ask for the written value, and compare it with the remaining cover and future premiums. Free look cancellation and surrender are separate processes.
What do exclusion, rider, and underwriting mean?
An exclusion identifies an event or circumstance for which a benefit is not payable as stated in the policy. A rider is an optional additional benefit with its own eligibility, cost, and terms. Underwriting is the insurer’s assessment of disclosed information to decide whether and on what terms to offer cover. Answer proposal questions accurately, including health, occupation, and habits. Read the precise rider wording instead of assuming it mirrors the base policy. If a quote differs from the issued schedule, resolve it during the free look window.
How do assignment and nomination differ?
Nomination records the person designated to receive policy proceeds after death. Assignment transfers policy rights wholly or partly to another person or entity through the applicable legal process. An assignment can affect an existing nomination, so a policyholder should ask the insurer to confirm the current records after any change. This matters when a policy is linked to a borrowing arrangement. The person shown as nominee on an old form may not describe the full legal position after a valid assignment.
What does claim settlement mean?
Claim settlement is the insurer’s decision and payment process after it receives notice and required documents for an insured event. Payment depends on the policy being eligible, the claim facts, disclosures, and contract terms. Keep the policy schedule, nominee details, and contact channels accessible to those who may need to claim.
If a claim is disputed or delayed, use the insurer’s grievance channel and the escalation routes described in the policy document. A published claim settlement ratio describes past aggregate outcomes. It cannot be established that any individual claim will be paid.
How can you use these terms to check your policy?
Read the customer information sheet and schedule together. Mark the life assured, all benefit triggers, policy and premium payment terms, due dates, exclusions, rider conditions, nomination, and servicing contacts. If the sales illustration and issued contract appear inconsistent, ask for an explanation in writing. The issued policy wording governs the contractual benefit, subject to law and regulation.
How can ABSLI help?
Aditya Birla Sun Life Insurance policyholders can check their issued policy schedule and contract through the company’s servicing channels, and ask for clarification of premium status, nomination, or benefit wording. The relevant policy document, rather than a general glossary, defines the benefits of a particular plan.
September 28, 2026
5 mins
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