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Glossary-Life

Occupational Hazards

Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that can be expected.

Premium

The payment, or one of the regular periodic payments, that a policy holder makes to an insurer in exchange for the insurer's obligation to pay benefits upon the occurrence of the contractually-specified contingency (e.g., death).

Premium Back Term Insurance Plans

These provide for refund of all the premiums paid, in the event of the life assured surviving to the end of the policy term. The total sum assured is paid to the beneficiaries in the event death occurs during the policy term.

Paid-up Insurance

Insurance on which all required premiums have been paid.

Paramedical Examination

Physical examination of an applicant by a trained person other than a physician.

Policy

Is the legal document that has the conditions of the insurance contract?

Policy Period

The period during which a Policy contract affords insurance.

Policy year

Period between a Policies anniversary dates.

Policyholder's funds

Monies set aside by insurers to cover outstanding liabilities to Policyholders. Also known as technical reserves.

Policyholder's surplus

Amount over and above liabilities available for an insurer to meet future obligations to its policyholders.

Policyholder's surplus ratio

The difference between an insurers' asset and its liabilities divided by its liabilities. One measure of an insurers financial strength.

Premium Notice

Notice of a premium due, sent out by the company or one of its agencies to an insured. Synonym for " Renewal Notice".

Premium Waiver Benefit(PWB)

Premium waiver benefits are the benefits which can be availed under children's policies, wherein the future premiums payable upto vesting date are waived in the event of death of the proposer before the vesting date.

Paidup Value

Paidup value is the reduced amount of sum assured paid by the insurer in case of discontinuation of the payment of premiums after paying the full premiums for the first three years.

PDB

Permanent Disability Benefit

Premium

Premium is the amount paid to secure an insurance policy.

Proposal Form

It is a form which is to be completed for securing an insurance policy.

Proposer

Proposer is a person who proposes the insurance policy.

Premium Waiver Benefit(PWB)

Premium waiver benefits are the benefits which can be availed under children's policies, wherein the future premiums payable upto vesting date are waived in the event of death of the proposer.

Proposal Form

It is a form which is to be completed for securing an insurance policy

Reinstatement

The restoration of a lapsed policy to in-force status. Reinstatement can only occur after the expiration of the grace period. The company may require evidence of insurability (and, if health status has changed, deny reinstatement), and will always require payment of the total amount of past due premium.

Risk

The obligation assumed by the insurer when it issues a policy. The spreading of risk across a broad base of the population, adjusted for statistical probability, and the protection against catastrophic loss, is the entire purpose of insurance. For risk assumption purposes, death is viewed as a contingency. That is, although death is certain, its timing is unknown. The process of evaluating and selecting risk is known as underwriting.

Rider

A provision attached to a policy that adds benefits not found in the original policy or that changes the original policy.

Rebating

Giving a consideration, usually all or part of the commission, to the prospect or insured as an inducement to by or renew. Rebating is prohibited by law.

Reduced Paid-up Insurance

A form of insurance available as a non forfeithure option. It provides for continuation of the original insurance plan, but for a reduced amount.

Renewable Term Insurance

Term insurance which can be renewed at the end of the term, at the option of the policyholder and without evidence of insurability, for a limited number of successive terms. The rates increase at each renewal as the age of the insured increases.

Sum Assured

Sum assured is the amount that an insurer agrees to pay on the occurance of an event.

Surrender Value

Surrender value is the amount payable to the policy holder on his surrendering his right under a policy and terminating the contract of insurance.

Target Pension

Target pension is the amount of pension which one wishes to receive under a pension policy.

Term

Term is the period for which insurance coverage is given.

Salary Saving Scheme

This scheme provides for payment of premiums by money deduction from the salary of the employees by one employer.

Sub Standard Risk

Person who is considered an under-average or impaired insurance risk because of physical condition, family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits.

Survival benefit

The payment of sum assured to the insured person which has become due by installments under a money back policy.

Suicide Clause

Limitation in life insurance policies to the effect that no death benefits will be paid if the insured commits suicide during a specified initial period, usually the first one year of the policy.

Settlement Options

The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid.

Term Insurance Rider

An endorsement or attachment to a life insurance policy that provides additional term coverage for only a specified, limited period. If the insured dies during this time, the designated beneficiary(ies) can receive death benefit proceeds.

Term Life Insurance

A form of life insurance which provides coverage for a specified period of time and does not build cash value.

Term

Term is the period for which insurance coverage is given.

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