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Glossary

Glossary

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Accident
An event or occurrence causing damage/injury to an entity, and is unforeseen and unintended.
Accident Benefit
Provides for payment of an additional benefit equal to the sum sum assured in instalments on permanent total disability and waiver of subsequent premiums payable under the policy.
Age Limits
Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.
Agent
An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer.
Annuity Plans
These plans provide for a "pension" ( or a mix of a lumpsum amount and a pension ) to be paid to the policy holder 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.
Application Form
Supplied by the insurance company, usually filled in by the agent and medical examiner (if applicable) on the basis of information received from the applicant. It is signed by the applicant and is part of the insurance policy if it is issued.
Assignment
Assignment means legal transference. A method by which the policy holder can person on his interest to another person. An assignment can be made by an endorsement on the policy document or as a seperate deed. Assignment can be of two types Conditional absolute


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.
Business Insurance
A policy which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled.


Cancelable
A contract of health insurance that may be cancelled during the policy term by the insurer or insured.
Coinsurance
1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required;
2) a policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 per cent by the insurer and 20 per cent by the insured.
Convertible Whole Life Policy
A mix of "whole life policy" and "endowment policy", it provides for very low insurance premiums with maximum risk cover while the life assured is just beginning his working career, and the possibiliy of converting the policy to an "endowment" policy after five years of commencement.
Coverage
The scope of protection provided under a contract of insurance; any of several risks covered by a policy.


Days Of Grace
Policy holders are expected to apy 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.
Deferment Period
Period between the date of subscription to an insurance-cum-pension policy and the time at which the first instalment of pension is received. Such policies generally prescribe a minimum and maximum limit on the deferment period.
Depreciation
A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss.
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.


Embezzlement
Fraudulent use or taking of another's property or money which has been entrusted to one's care.
Endowment Policy
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. 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.
Excess And Surplus Insurance
1) Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy.
2) Insurance to cover an unusual or one-time risk, e.g., damage to a musician's hands or the multiple perils of a convention, for which coverage is unavailable in the normal market.
Exclusions
Specific conditions or circumstances for which the policy will not provide benefits.


Facultative Reinsurance
A type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance compa