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Insurance Glossary
Accidental benefit
In life insurance policy additional sum insured paid in case of death due to an accident if extra premium paid
Actuary
An individual who is a Fellow of the Actuarial Society of India
Assignment
Transfer of rights of insured in a policy
Agent
Marketing representative (not an employee) of insurance company duly
licenced by IRDA
Annuity
Periodical payments (Pension) to the insured by an insurer in lieu of premium paid.
Bonus
Additional amount paid with sum insured in with profit policies
Cover note
A document issued by insurance company as a proof of insurance in motor
insurance in lieu of policy
Certificate of insurance
A certificate of insurance in case of motor policy issued by insurance
Company
Coinsurance
Where the insured also shares a predetermined percentage of risk with the insurer.
Coverage
Perils covered in an insurance policy
Contribution
Sharing of loss by all insurers of a policy covering the same property
Claim
An application for payment of required amount in a policy by
insured/dependents on happening of covered loss/damage
Date of commencement
Date of commencement of policy
Detariffing
Removal of controlled tariff/premium rates in General Insurance
Endowment plan
A life insurance plan where in sum insured is payable either on the maturity of the policy or on death if occurs before maturity of policy.
Expiry date
Date of expiry/end of policy
First premium receipt
First receipt of premium issued by life insurance company on commencement of policy
Fire Insurance
Insurance contracts which cover loss or damage to property due to fire
General Insurance
Insurance of property other than life, includes fire, marine & other General Insurance policies
Group life insurance
Life Insurance of a group of persons
Health insurance policy
A General Insurance policy covering hospitalization expenses of insured persons
House holders insurance policy
A General Insurance policy covering loss or damage of residential building and its contents
Insurance
Insurance can be termed as an agreement by mutual consent between the insured and the insurance company which is enforceable by law wherein insurance company promises to the insured on receipt of premium the payment of money as per terms and conditions of policy.
Insurer
An insurance company
Insured
A person/firm/company who is covered/insured in a policy
Indemnity
Compensation for actual loss
Insurable Interest
Financial interest
Insurance Company
An Insurer being a company
IRDA
Insurance Regulatory & Development Authority. It is the controlling and regulatory apex body in the country for insurance sector and its chairman and members are appointed by Government of India. IRDA’s HQ is located at Hyderabad
Insurance Policy
An stamped legal document issued by insurer mentioning terms and conditions of contract
Lapse
Termination of policy due to non-payment of premium
Life Insurance
Insurance contracts upon human life
Maturity date
Date when benefits of life insurance policy are payable/when policy expires
Mediclaim policy
A health insurance policy
NAV
Net asset value/price of a unit of mutual fund
Nomination
Provision for designating a person to receive claim amount in the event of death of insured in life insurance policy
Non-Life Insurance
General Insurance
Premium
Price/consideration of insurance contract paid by insured to insurer
Perils
Occurrences which may cause damage to assets. Fire, theft, accidents etc. are perils
Proposal form
Application for insurance submitted by proposer to insurer and forms basis of insurance contract
Policy holder
Insured person
Proposer
A person or a firm who proposes for insurance cover to the insurance company.
Pension plan
Insurance plans or mutual funds where after certain period of investment regular payments are made
Permanent disability
Permanent and irreversible incapacity of a part or whole of body
Personal accident policy
General Insurance policy covering death/disability due to accident. Policy does not cover death/disability due to natural causes
Reinsurance
Insurance of risk assumed by original insurer
Rider
Additional risk/benefit covered in a life insurance policy on payment of extra premium
Risk
Damage which may be caused by perils/unforeseen events
Shopkeepers insurance policy
A comprehensive General Insurance policy for shops
Subrogation
Transfer of rights of insured to insurer.Not applicable in life policies.
Surrender value
Amount payable on voluntary termination of life insurance policy
Sum Insured
Sum or amount for which life or property is insured
Term Assurance
A life insurance plan for a fixed term where only risk is covered & sum insured is payable to nominee on the death of insured
Utmost good faith
Principle of insurance contract requiring full diclosure and representation of material facts by insurer and proposer
With profit policy
Life insurance policy with provision of additional benefit or bonus
Whole life Insurance
Term assurance policy for whole life where benefits are payable to nominee on death of life assured
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