Insurance Dictionary: Words, Meanings, Terms - Aditya Birla Sun Life Insurance

Attained age

Attained age refers to your current age

Beneficiary

Beneficiary refers to the person or legal entity who is entitled to receive the policy benefits in case of any eventuality.

Claim

A claim refers to the payment made by the insurance company to the insured or nominee on the occurrence of the event specified in the insurance documents.

Commission

Commission refers to the fees paid to an agent. It is usually a percentage of premiums.

Concealment

Concealment is the act whereby an applicant withholds critical information from the insurance company, is called concealment.

Death Benefits

Death Benefits refer to the amount of money paid to the nominee on the death of the insured.

Disability

Disability refers to the incapacity to exercise a profession as a result of sickness, illness, accident or any other infirmity.

Exclusions

Exclusion refers to the list of ailments or hazards which are not covered under the insurance policy.

Fiscal Year

It refers to the block of 12 months starting from April and ending in March.

Free Look Period

Free lock period refers to the 15 days period offered by insurance company to review the terms and conditions of the policy. In case insured disagrees with the terms and conditions stated in the policy, he can return back the policy.

Grace Period

Additional time period provided by an insurance company to policy holders to pay their due premiums usually without any penalty.

Hazardous Avocation

Your hobby which exposes you to the risk of death/injury is known as hazardous avocation for the purpose of insurance.

Indemnity

A policyholder should not make profits out of his damages. In simple words he should be paid maximum to an extent of his loss.

Insurable interest

This is a prerequisite condition for any life insurance contract. A person who intends to buy an insurance policy should suffer either financial or emotional loss due to happening of any unfortunate event.

Insurance

Insurance refers to the transfer of risk from one to another for some consideration. More literally, it means paying a fixed amount for a predetermined number of years (this could even be a one time payment) in exchange for which you or your nominee will receive a lump sum amount in the event of a specified incident - such as your demise or your reaching a particular age.

Insurance Agent

Agent is a licensed person who is allowed to sell insurance and serve policy holders as a representative of an insurance company.

Insured

Insured refers to the person who is covered under the insurance policy.

Insurer

Insurer refers to the company issuing insurance policies.

Joint life

The policy whereby two individuals are insured under same policy.

Lapse

Lapse refers to the termination of an insurance policy due to non-payment of premium.

Material facts

Any information which could affect the underwriting decision on your policy to a considerable extent is a material fact.

Maturity claim

The policy holder is entitled to receive, if mentioned in the terms of contract, specified sum at the end of policy term which is known as maturity claim.

Maturity date

Maturity date refers to the date on which the insurance contract ceases to exist.

Mortality charges

Charges that have been imposed purely for providing you a life cover are known as morality charges.

Nomination

Nomination of the policy refers to choosing or appointing a person who will receive the policy monies in the event of the death of policy holder.

Occupational hazards

Nature of work or events related to your job/occupation which makes you more vulnerable to the risk of sickness or death is known as occupational hazards and attract higher premium.

Policyholder

Policyholder refers to the person who owns the policy but not necessarily the insured.

Premium

Premium refers to the cost of risk transfer. In simple words contribution required to take the insurance policy and keep it in force. This can either be paid lump sum or at regular intervals.

Rebates

When an agent shares a portion of his commission with his clients or prospects in order to solicit a new business or to renew on going policies is known as rebate. Rebate is prohibited by the law.

Reinstatement

The process of revival of lapsed policy is known as Reinstatement. You need to clear you backlog of premiums for any possible reinstatement.

Riders

Riders refers to the low cost benefits (add-ons) available to enhance the coverage of life insurance policies.

Risk selection

A process of assessment of risk by which underwriter determines whether to accept your application for buying insurance policy is called risk selection.

Risk tolerance

The degree to which investor is tolerant towards risk of losing money for possibility to earn more. Same as above

Sum assured

Sum assured refers to the minimum amount that will be paid either on death of the policyholder during the term of the policy or maturity of the policy.

Surrender value

It is the amount payable in case you want to terminate or cancel a policy before its due date.

Surrender value

The amount payable by an insurance company, once the policy holder decides to discontinue the policy before maturity is known as surrender value. This may or may not attract any penalty.

Term of the policy

Term of the policy refers to the Period for which contract of insurance is valid.

Underwriter

A professional or team of professionals who decide whether to accept or reject applications for insurance.

Vesting date

The date from which a child becomes the owner of a policy taken. Usually it is the 18th birthday of the child.

With Profit policy

With profit polices refer to the insurance plans where policy holder earns bonus (share of the insurer's profits) along with sum assured.

Without profit policy

Without profit policy refers to the insurance plans where policyholder does not get any share of the insurer's profits.