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Glossary-Life

Age limits

Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.

Annuity

It is a scheme whereunder certain amount is paid at yearly/half yearly/quarterly/monthly intervals.

Annuity Plans

These plans provide for a "pension" (or a mix of a lumpsum amount and a pension) to be paid to the policyholder or his spouse. In the event of death of both of them during the policy period, a lumpsum amount is provided for the next of kin.

Annuitant

Annuitant is the person who receives certain amounts at yearly/half yearly/quarterly/monthly intervals.

Assignment

Assignment means legal transference. A method by which the policyholder can pass on his interest to another person. An assignment can be made by an endorsement on the policy document or as a separate deed. Assignment can be of two types
1.Conditional assignment
2. Absolute Assignment

Adverse Selection

The tendency of persons who present a poorer-that-average risk to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss.

AIDS

Acquired immune deficiency syndrome.

Assignee

Assignee is the person to whom the benefits under a life policy are assigned.

Assignor

Assignor is the person who holds the right/title under the policy and who can make a valid assignment.

Beneficiary

The person(s) or entity(ies) (e.g. corporation, trust, etc.) named in the policy as the recipient of insurance proceeds upon the death of the insured. (life)

Bonus

Bonus is the amount added to the basic sum assured under a with-profit life insurance policy.

Binding Receipt

A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.

Branch Office System

Type of life insurance marketing system under which branch offices are established in various areas, Salaried branch managers, who are employees of the company, are responsible for hiring and training new agents.

Claim Amount

It is the amount payable by the insurer under a policy on a claim arising

Dating Back

Dating Back or Back Dating is an option to the life assured to get the advantage of lower age wherein the policy is commenced from a date earlier than the date of signing of proposal form. However back dating is limited to one year.

Double/Triple Cover Plans

These offer to the beneficiaries double/triple the sum assured on death of life assured during the term of the policy. On survival to the date of maturity, the basic sum assured is paid to the assured. These are low-premium plans, most useful for situations such as housing.

Days of Grace

Policyholders are expected to pay premium on due dates. A period is 15-30 days is allowed as grace to make payment of premium; such period is days of grace.

Death Benefit

A payment made to a beneficiary upon the death of the insured person.

Declining

The insurer's refusal to insure an individual after Careful evaluation of the application for insurance and any other risk factors.

Deferred Annuity

An annuity plan where the first annuity payment becomes payable after a chosen period that exceeds one year.

Deferment date

It is the date on which the deferment period ends.

Deferment period

Deferment period is the period from the date of commencement of the policy to the date of commencement of risk on the child's life under a Children's Deferred Endowment Assurance policy.

Deferred Group Annuity

A type of group annuity providing for the purchase each year of a paid-up deferred annuity for each member of the group, the total amount received by the member at retirement being the sum of these deferred annuities.

Defined Benefit Plan

A pension plan stating either (1) the benefits to be received by employees after retirement or (2) the method of determining such benefits. The employer's contributions under such a plan are actuarially determined.

Defined contribution Plan

A plan under which the contribution rate is fixed and benefits to be received by employees after retirement depend to some extent upon the contributions and their earnings.

Deposit Administration Group Annuity

A type of group annuity providing for the accumulation of contributions in an undivided fund out of which annuities are purchased as the individual members of the group retire.

Deposit Premium

The premium deposit paid by a policyholder when an application is made for an insurance policy and is applied toward the actual premium when asked to pay.

Deposit Term Insurance

A form of term insurance, not really involving a "deposit," in which the first-year premium is more than subsequent premiums.

Endowment Policy

The insured amount is payable either at the end of specified number of years or upon the death of the insured person, whichever is earlier. The assured has to pay an annual premium which is determined on the basis of the assured's age at entry and the term of the policy.

EPDB

Extended Permanent Disability Benefit

Female lives

Category I: Women with income earned by

• virtue of their employment in any reputed organisation or institution eligible for Non Medical Special Schemes.

• Professions such as Medicine, Law, Charted Accountancy etc. and lady career agents of LIC.

CategoryII:Women with unearned income attracting payment on income tax or women holding sizeable personal properties/investments yielding income attracting assesment for income tax.

First Class Life

An Individual is categorised as First Class Life if is eligible to have insurance coverage at normal rates of premium.

First Unpaid Premium(FUP)

First unpaid premium refers to the first default in paying premium by the policy holder. On payment of the due premium a receipt is issued and this receipt indicates the date of next due. If this due premium is not paid that date becomes the date of FUP.

Franchise insurance

A form of insurance in which individual policies are issued to the employees of a common employer or the members of an association under an arrangement by which the employer or association agrees to collect the premium and remit them to the insurer.

Grace Period

A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues.

Graded commission Scale

A commission scale providing for payment of high first-year commission and lower renewal commissions.

Guaranteed Insurance Sum(GIS)

Guaranteed Insurance Sum is equal to purchase price paid for a pension along with final Jeevan Akshay Bonus.

Gross Premium

The premium paid by the policyholder.

Gross Rate

The sum of the pure premium and a loading element.

Group Contract

A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Insurance

Insurance written on a number of people under a single policy, issued to their employer with which they are working.

Gross Insurance Value Element(GIVE)

Gross Insurance value element is the amount payable on death of a policy holder under a Jeevan Dhara Policy.

Guaranteed Addition

Guaranteed additions are calculated at a rate per every thousand of sum assured. They are added to the basic sum assured and are payable on admittance of claim. This benefit is allowed only for each year for which premiums are paid.

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