Insurance Glossary

• Accumulation Period: Accumulation period refers to the time interval between the commencement of the policy and the time when benefits are paid out.
• Assignment: Assignment refers to the transfer of the rights and benefits of an insurance policy from one person to another.
• Beneficiary: Beneficiary refers to the person or legal entity who receives the policy benefit if the insured event occurs.
• Claim: A claim refers to the payment made by the insurer to the insured/or nominee on the occurrence of the event specified in the contract, in return for the premiums paid by the policy holder.
• Death Benefit: Death benefit refers to the payment made to a beneficiary by an insurance company when the policyholder dies.
• Endowment plan: Endowment plans provide a combination of life cover and savings. Under an endowment plan, the policyholder pays regular premiums during the policy term. In case of demise of the policyholder during the policy term, the nominee gets the death benefit ? usually the sum assured and accumulated bonuses. On survival, the policyholder gets a survival benefit, including vested bonus and terminal bonus, if any.
• Free look period: Free look period gives the client the option to review the terms and conditions of the policy for a few days after the date of receipt of the policy document. In case the policyholder disagrees with the terms and conditions stated in the policy, he has the option to return the policy.  The premium paid by the policyholder is also returned after deducting expenses.
• Grace period: Grace period refers to the period after the due date for paying the premium during which it can be deposited, along with a penalty, if stipulated.
• Insured: Insured refers to the policyholder or the person protected in case of a loss or claim.
• Insurer: Insurer refers to the insurance company.
• IRDA: IRDA (Insurance Regulatory and Development Authority) is the apex body overseeing the insurance sector in India. Its main aims are to protect the interests of policyholders and regulate the insurance industry.
• Lapse: Lapse refers to the termination of an insurance policy due to non-payment of premium.
• Loyalty additions: Some insurance policies give you a share of the profits in the form of loyalty additions, which are terminal bonuses payable along with the death or maturity benefits.
• Maturity Benefit: The amount that the insurance company has to pay you when the policy expires is known as the maturity benefit. It generally comprises of the sum assured and bonuses declared, if any, by the insurance company.
• Nomination: Nomination is a right conferred on the life insurance policyholder to appoint a person to receive the policy monies in the event of the death of the policy holder.
• Policy Benefit Period: Benefit Period is the maximum time period up to which the plan will pay benefits. This period could extend even beyond the date of the policy expiration.
• Policyholder: The policyholder is the person who owns the policy.
• Premium Payment Term: The Premium Payment Term refers to the duration for which you are required to pay your premium.
• Policy term: The policy term is the number of years for which the policy is bought. If you buy an insurance policy for 15 years, then it implies that the policy has a term of 15 years.
• Premium: Premium refers to amount paid to purchase an insurance policy. The frequency of premium payment can vary from monthly to quarterly to yearly or it could even be a one time payment of premium.
• Term Plan: A Term Plan is a pure risk product that aims to cover your life at a nominal cost. Since it is a pure risk cover product, there is no maturity benefit payable on survival. This is a non-participating plan.