Glossary 3

Glossary 3

Confused about all the jargons being used, let us help you know more about various terms being used in Insurance.
Here's an easy guide to the various technical terms to help you understand better !
Categorise by alphabets


DEATH BENEFIT: is the benefit payable in the event of death during the term of the policy.

DEATH CLAIM: is the claim that arises if the life assured dies during the term of the policy.

DEATH RISK COVER: Is the person authorised by Insurance Regulatory & Development Authority (IRDA) to sell its policies.

DEBIT TO PROVIDENT FUND Rules permit payment of premium by withdrawal from Provident Fund
PF authority sends cheque to policyholder Policyholder forwards the premium and sends the receipt to Provident Fund.

DECREASING (SUM ASSURED) TERM POLICY/ MORTGAGE REDEMPTION POLICY: The Sum Assured decreases during the term of the policy to match the outstanding principal.

DEFERMENT DATE: is the date on which the risk cover commences after the deferment period has elapsed.


DEFERMENT PERIOD: is the period between the date the policy is bought and the risk cover commences.

DEFERRED ANNUITY
(ANNUAL PAYMENTS) : plans are recommended for young persons. The premium is paid during the deferment period and annuities start at the end of the deferment period. The premiums are returned to the nominee/heirs if the policyholder dies during the deferment period along with interest. These policies come with an option to convert the policy for a reduced paid up amount or receive cash based on the Surrender Value, in case insured is unable to meet future premium payments.

DISABILITY PLANS: These come as add-ons to basic insurance covers. Higher premiums are charged to cover the risks associated with sickness, death caused by accident and permanent disability caused by accident. The benefits include payment of an extra amount (equal to Sum Assured but not exceeding Rs 5 lakh in most cases) along with compensation for loss of employment due to sickness/disability and reimbursement of medical expenses among others.

DOUBLE ACCIDENT BENEFIT: If an individual has bought double accident benefit he is entitled to double the Sum Assured in case of death due to accident. The death should occur within 120 days of the accident and due to injuries sustained in the accident. The maximum benefit payable is Rs 5 lakh. The insured must not be over 70.

EDUCATION ANNUITY PLANS pay the sum assured in installments spread over a specified period to match the estimated financial expenses on higher education.

ENDOWMENT POLICIES: are a combination of risk cover and savings instrument. The Sum Assured is payable on death of the life assured or at the end of the term whichever is earlier.

EXCEPTION/EXCLUSION: A peril that is specifically excluded under an insurance policy. Exclusions can be general, or applicable across all insurance policies or applicable to a specific policy. Loss due to war or warlike conditions, or due to nuclear weapons is a general exclusion. No policy covers these losses. If you have heart disease your health insurance policy could exclude hospitalisation for that condition and those arising out of it. This is a specific exclusion

EXCESS: The amount of loss agreed under an insurance policy, to be borne by the insured himself.

FORECLOSURE: is the action taken by the insurer when the policyholder fails to pay up the interest on his loan. The insurer writes off the policy before its maturity date and the surrender value is adjusted against the loan.

FORFEITURE OF PREMIUM: The laws and principles of insurance do not allow forfeiture of premium if the insured is unable to pay future premium leading to lapse of policy.

Source: http://www.sbilife.co.in/sbilife/application?pageid=CorporateGroup&CorporateId1=glossary1