Important words in Insurance

S.No	Important Words	SUMMARY
1	proposer	A person who requests to buy a policy for self, spouse or child.
2	Proposal form	This is a form to be filled by person who wishes to take a policy. (all a person in whose name policy is taken.
3	Policy holder	A person in whose name policy is taken.
4	Premium	Amount to buy a policy or installment. (Annually, semi annually, quarterly, monthly (ECS-electronic clearing system)
5	agent	Intermediate between company & policy holder. (one who sells policies on commission basis)
6	insurer	Insurance company who sells policy & also gives money (SA/maturity) at the end of the period.
7	contract	Agreement between company& policy holder. (one giving & one taking)
8	nominee	A person who receives the money on death of the life insured
9	rider	It can be taken along with normal policy for extra benefits (WOP, CI AD &D, SC, HC)
10	Sum assured	The limit of the policy amount. (risk amount- sum at risk)
11	claim	Payment of sum assured on death or maturity.
12	Risk/peril/hazard	Risk- chance of damage of loss, peril- event which might cause a loss, hazard- conditions that a peril would happen.
13	Coroner (investigator)	A person who investigates in case of death cases.
14	Medical referee	Panel of doctors who are appointed for medical checkups. (not company employee)
15	underwriter	He is a company employee who decides to give the policy or not

16	actuary	A person who decides the premium, bonus etc.
17	Utmost good faith	Declarations by the person that  All information filled in proposal form are correct.
18	indemnity	It is amount paid as per actual loss occurred applied for general insurance not applied for life insurance as Li is value contact.
19	Insurable interest	Policy taken on near & dear ones (profit if they are alive loss in case of their death). It arises at the time of inception of the policy.
20	Grace period	Extra time given for policy holder to pay the premium.  Yrly/Hif/Qtr 30 days 7 mtly 15 days.
21	lapse	Stops benefits of policy for nonpayment of premium after grace period.
22	revival	A process to re-start the lapse policy.
23	endorsement	A process to make changes in the policy document.
24	assignment	A process to transfer the rights or title to others (gift loan)
25	surrender	After paying 3 full  years premium a policy can be surrendered with s. charges (ULIP plans no surrender charges after 5 years).
26	Income tax 1961	Life insurance sec 80c (upto 1 lac) health/medical 80d (15k or 20k) & 10 10d tax free returns 9maturity & death)
27	Micro insurance	A policy for low income group (SA 5k to 50k) medical (KD to 30k) min premium Rs 15 per week.
28	MWP act 1874	(married women policy act) a special act to protect the women & upto 2 & more children’s
29	ombudsman	This is a court where policy holder can file a case against the company in case of dispute. (max 20lac & decision 90 days)
30	Moral & physical hazard	Risk which is external is physical hazard (height, weight) risk for habits, carelessness is intention is moral.
31	Saving products	Life insurance, bank, post office, gold silver, Mf shares etc.
32	Type of insurance	Life, non-life & reinsurance.
33	Health insurance	Individual, family floater, group & daily hosp benefit. ( fixed days & fixed amount)
34	Participants insurance	Agents, corporate agents, intermediaries, underwriter, acuturaries, TPA
35	Human life value	Every human being has a value (20 times of his income)
36	e-sales	Sales trough internet
37	Life insurance products	Pure term, pure endowment, endowment, (child, money back) ULIP group insurance etc
38	Pooling of risk	Similar risk faced by people, different people contribute premium. (life, car etc)
39	Mutual understanding	In a contract there are 2 parties they come together & agree for the same terms & conditions.
40	Paid up value	If premium is not paid after the grace  period it can be converted into paid up policy as it will have some surrender value. (total number of premium paid/total number of premium payable x sum assured)
41	inflation	If price of goods & services increase & value of money fall.
42	Fact finding	Collection of financial information from the customer(age, family history, income etc)
43	Investment priority	High, low & middle
44	Life cycle	Childhood, young, young married, with small child, with big child, pre-retirement etc
45	Insurance priority	Protection, income protection, child edu, medical, wealth creation, retirement.
46	churning	Convincing customer to shift from existing policy to new policy for earning high commission.
47	Participating plan	This plan has the right to participate in profits (bonus) of the company. (nonparticipating no bonus eg term, ULIP)
48	IRDA,SENBI, RBI	full form of these & relations of the same.
49	bonus	benefits above the S A paid to the policyholder after a certain period of time.
50	Clause & lien	clause is a condition which applies for high risk people (pilot, electrician) lien reduction of SA over a period of 5 years if risk is reducing over a period of time.
51	maturity	Benefits received at the end of the policy term.
52	underwriting	Process of checking the policy (to issue or not)
53	trustee	To whom benefits of policy to be paid. 9in case of MWP ACT)
54	ULIP	The policies which are related to share market.
55	NAV	Net asset value of 1 unit of share purchased.
56	Vesting age	The age of the child when the child attains maturity.  Mostly found in children
57	Risk retention & risk transfer	Keeping the risk with self. Transferring the risk by purchasing a insurance policy.
58	Locking period	Applicable for ULIP plans where the premiums have tp be parked for certain period.
59	Indisputable clause	Sec 45 if the insurer comes to know if any information in the policy is hidden.
60	Role of financial services	Where the agents help the policy holders to maintain a stable life. They also help the Govt  for smooth fuctioning.
61	Indirect channel	These are the channels who sell insurance on behalf of the insurer. (agents, bancassurance, brokers ETC)