Insurance - Increasing (Sum Assured) Term Policy

Increasing (Sum Assured) Term Policy :
                                                           In some money-back plans, a fixed percentage of the Sum Assured is paid to the insured at the end of specified periods during the term of the policy. However, not withstanding the periodical payouts, the sum assured at risk (payable on death) continues to be same during the term of the policy; that is

Insurance - Immediate Annuity/Straight Life Annuity

Immediate Annuity/Straight Life Annuity :
                                                             These are single-premium policies. The life assured pays a lump sum and the insurer pays him/her a specified amount throughout his/her lifetime. The word immediate denotes that the annuities start from the day on which the single premium is paid, providing immediate income to the insured.

Insurance Guaranteed Addition

Guaranteed Addition : In case of certain policies, the insurance company adds a certain sum every year to the sum assured of a policy (guaranteed additions): This sum is calculated at a rate per every thousand of sum assured. It is payable upon the maturity of the policy or when the claim is made. The guaranteed addition take place only for every year the premium is paid

Insurance Guaranteed Surrender Value

Guaranteed Surrender Value :
                                            You can obtain this minimum amount in case you decide to foreclose the policy, after payment of premium for a stipulated minimum period.

Insurance - Group Superannuation Scheme

Group Superannuation Scheme :
                                                This operates like a Pension scheme where the payments made at the end of each period
• Employers set up trust fund.
• Trustees enter into a Superannuating scheme.
• Fund managed by insurer.
• Insurer provides actuarial, legal and tax assistance to trustees.

Insurance - Group Savings Linked Insurance Scheme

Group Savings Linked Insurance Scheme :
                                                                This scheme provides both death and savings benefit. It normally requires the group to consist of at least 50 members. The scheme is administered through the employer, with the first charge on salary for life insurance cover. The balance in this account is utilized for earning interest. The premium for providing risk cover is based on the age distribution of members of the group and balance amount of the premium after deducting for risk cover is used for savings (endowment).

Insurance-Group Insurance Scheme

Group Insurance Scheme :
                                       This is a term insurance type of contract, simple and cheap, The specified amount is payable by the insurer on death of a member.

Insurance Group Gratuity Scheme

Group Gratuity Scheme:
The Payment of Gratuity Act 1972 makes it compulsory for employers, who have 10 or more employees, to set up a Gratuity Scheme. The Group Gratuity Scheme operates as follows:
 • Employer sets up Gratuity fund as an irrevocable trust fund
 • Trustees enter into a contract with an insurance company to manage funds
 • Insurance company manages fund by diversifying risk.
The Main Benefit is to the families of employees who die at an early age since the gratuity is paid on the basis of completed service.
Group Insurance provides cover for a group of people who satisfy the following conditions :
 • The group must be formed for reasons other than to take a policy
 • Members enter and exit a group for reasons other than to take a policy
 • Should consist of more than 25 members
The Master policy covers all group members and there is no mandatory requirement for all members have to apply for equal cover. Al inception of the policy, all members have an option to join, but members who join later cannot be covered immediately. Members appointed specified authority to represent the group and premiums vary depending on performance of the group. The surplus if any may be shared among members in case of good performance (PROFIT SHARING SYSTEM).

Insurance Grace Period

Grace Period :
                      Grace period is the period during which the policyholder can renew his policy. The policy remains in force, i.e. the risk continues to be covered during this period and claims will be serviced in case of death during this period. For yearly, half yearly and quarterly premium payments the grace period is 30 days. For monthly mode of payment -15 days.

Insurance General Insurance Companies

General Insurance Companies :
                                               Insurance companies which offer risk (insurance) cover on non-life entities, such as Crop insurance,Fire Insurance, etc are known as General Insurance Companies. They cover human life only for Mediclaim Policies.

Insurance - Forfeiture of Premium

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.

Insurance - Foreclosure

Foreclosure :
                   It is the action taken by the insurer when the policy holder 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.

Insurance-Excess

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

Insurance-Exception/Exclusion

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

Insurance-Endowment Policies

Endowment Policies :

                                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.

Insurance-Education Annuity Plans

Education Annuity Plans :

                                     Education Annuity Plans pay the sum assured in installments spread over a specified period to match the estimated financial expenses on higher education. 

Insurance-Double Accident benefit

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. 

Insurance-Disability Plans

Disability Plans:
                      These come as add-ons to basic insurance covers. Higher premiums are charged to cover the risks associated with sick-ness, 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.

Insurance-Deferred Annuity (Annual Payments)

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 de-ferment period along with interest. These policies come with an op-tion 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

Insurance-Deferment Date

Deferment Date : It is the date on which the risk cover commences after the deferment period has elapsed. 

Insurance-Decreasing (Sum Assured) Term Policy/Mortgage Redemption Policy

Decreasing (Sum Assured) Term Policy/Mortgage Redemption Policy :

                                                                                                        The Sum Assured decreases during the term of the policy to match the outstanding principal. 

Insurance-Debit to Provident Fund

Debit to Provident Fund :
                                   
                                      Rules permit payment of premium by withdrawal from Provident Fund PF authority sends cheque to policy-holder Policyholder forwards the premium and sends the receipt to Provident Fund. 

Insurance-Death Risk Cover

Death Risk Cover :

                             It is the person authorized by Insurance Regulatory & Development Authority (IRDA) to sell its policies. 

Insurance-Death Claim

Death Claim :
                    It is the claim that arises if the life assured dies during the term of the policy. 

Insurance-Death Benefit

Death Benefit :

                     Death Benefit is the benefit payable in the event of death during the term of the policy.

Insurance-Claim Amount

Claim Amount :
                      It is the amount payable by the insurer under a policy on a claim arising. 

Insurance-Children Deferred Assurance Plans

Children Deferred Assurance Plans :
                                                        Are schemes under which a minor child is the beneficiary. The parent proposes for insurance on the life of the minor and pays premiums. The risk on life of child begins at a specified age. The period before the specified age is attained is called Deferment Period. Claim : An insurance contract is a promise to pay certain sums under certain conditions. Making a claim is invoking that promise and if it is in accordance with what is set out in the contract then it is admissible and can be payable if all other terms and conditions of the contract are met. 

Insurance-Bonus

Bonus :
           The insurance company periodically values its assets and liabilities. The premium payments that it receives from you are used for three purposes: to settle claims, to make investments, and to pay expenses. If the insurance company makes profits, it declares a bonus for a certain period for its policyholders. It can disburse this bonus to you in three ways: the bonus is added to the value of the policy;the bonus is distributed to you physically; or your future premium payments are reduced. In India, generally the first method is adopted for with profit policies, and is paid to you upon maturity of  the policy. 

Insurance-Benefit Policy

Benefit Policy:
                     In some cases the extent of loss cannot be quantified in monetary terms, and hence the amount payable under a life policy is a benefit and not an indemnity.It also means that the extent of compensation need not be restricted to the sum assured under one specific policy and that payment under other policies if they exist can be collected too.

Insurance-Bankers orders

Bankers orders:
                      Bank is instructed to pay premium on due date on behalf of the insured.

Insurance-Assignment

Assignment:
                 Assignment is the transfer of the rights,titles and interest of the policy by the assignor to the assignee. The assignor is the absolute owner of the policy.He/she could be the proposer, the life assured or the absolute assignee. Nomination is automatically cancelled by assignment.

Insurance-Annuity Certain

Annuity Certain:
                       These annuities are payable for a certain minimum period and if the policyholder dies during this period,the remaining installments are paid to the beneficiary of the policy.These annuities operate as any normal annuity after the end of the certain period,.i.e payments will be made throughout the life of the life assured.No payments are made to the beneficiary after the death of the life assured,if the outlives the certain period.

Insurance-Annuity

Annuity:
           Its is a periodic payment payable by the insurer to the life assured.Generally,it is used in context of retirement benefits.Under this type of insurance contracts of retirement contracts,the life assured pays fixed premium and the insurer,in return provides the life assured a fixed amount of income throughout his.her lifetime.

Insurance-Agent

Agent:
        It is the person authorized by insurance regulatory and development authority(IRDA) to sell its policies.

Insurance-Accident Benefit

Accident Benefit:
                         If you pay a small additional premium,your nominee will receive twice the sum assured upon your death by accident.I you suffer a permanent disability due the accident,then the amount is paid to you in installments, and subsequent premiums under the policy are waived.

Insurance-Absolute Assignment

Absolute Assignment:

                               If the absolute assignment is done then there can be no reversion of the assignment to the assignor or his estate.