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Faq

  • What is the guaranteed Savings/bonus applicable under a Life Insurance Policy?

    There are some insurance policies that guarantee the amount of money you would receive upon maturity. Typically, this amount is a proportion of the sum assured such as a bonus or a guaranteed addition. Lets say bonus is Rs 50 per Rs 1000 of the sum assured and you have an insurance policy for a sum assured of Rs 100,000 then you earn a bonus of Rs 5,000 each year on the sum assured.
    Other policies may offer you a guaranteed bonus as a percentage such as a guaranteed addition of 3.5% per annum on a compounded basis.
  • What is Term Insurance?

    Term Insurance covers “Risk” and Risk means “Death”. Here a lump sum amount is payable only if death occurs during a selected period. If the insured survives till the end of the selected period, nothing becomes payable.


    Source: SBI Life Insurance
  • Should I take Life Insurance?

    A person who have dependents (especially if they are the primary provider) or significant debts that outweigh ones assets, then you need insurance to ensure that your dependents are looked after if something happens to you.

    However, buying life insurance doesn't make sense for everyone. If you have no dependents and enough assets to cover your debts, survivor living expenses, outstanding life goals and the cost of dying (funeral, estate lawyer's fees, etc.), then insurance is an unnecessary cost for you.
  • What does my family get on my death?

    If death of the policy holder takes place during the term of the insurance policy, then the nominee designated by the policy holder receives the assured sum plus the accrued bonus, if any.
    If the policy is along with the bonus policy or participative profits, the bonus is payable to the nominee in addition to the sum assured but only for the number of years the premium has been paid.
    If the policy has an accident rider and death takes place due to an accident, then nominee may receive double the sum assured.
    However, if death takes place after the policy has matured, then the nominee does not receive anything from the insurance company. There are certain policies which offer to cover the insurer for the sum assured or a part of the sum assured, even after the policy has matured.
  • What is vesting age?

    The age at which you start receiving pension in an insurance-cum-pension plan is known as vesting age.
  • How do I open an e Insurance Account (eIA)?

    To open an e IA, you need the fill out an account opening application form of the Insurance Repository along with the necessary supporting documents. Application Forms would be available in all offices of the Insurance Repository, once they are operational. They can also be downloaded from the respective website or you can fill out an application online at the website). You can also contact your Insurance Advisor (Agent) for an application form. You can submit the signed e IA application form at any Insurance Repository office. If you are applying to open an e IA at the time of buying a new Insurance Policy, it may be best to hand over the e IA form, along with the insurance proposal form, to the Insurance Company.

    To open an e IA, you need to necessarily have either a PAN or Aadhar number. When submitting your e IA application, please ensure that you provide copies of your PAN or Aadhar, Address Proof and proof of date of birth, along with a passport size photograph. You also need to show the original of address proof for verification (the list of acceptable address proof documents is given elsewhere).
  • What is Life Insurance?

    Life insurance policy gives you the protection against financial losses resulting from the insured individual’s death. It provides you and your family the financial security and certainty to deal with the aftermath of any unfortunate events.
  • When should I insure?

    When your family members become dependent on your earning income, you should insure yourself. The advantage of starting insurance at an early age is that the premium will be lower at early stages. Even if you are single, earning and planning to get married, you should think of buying a policy now, as it costs less now than it will when you marry.
    Even if you are 45, and not insured, you could still choose insurance plans that provide benefits to your family and provide income during your retirement period.
  • What is a Money Back plan?

    Money back life insurance plan provides for periodic payments during its tenure, it gives back money to policyholder at different points in time usually 4-5 years. The investments done are similar to endowment plans. Money back policy will give you a fixed percentage of the sum assured after 4 or 5years. For example, if the policy is of 20 years, then company will pay 15% after every 4 years and the remaining 40% on maturity with accumulated bonus. The policy terms and payback schemes will vary from company to company.
  • What are the benefits of group life insurance?

    This scheme provides insurance coverage to a group of people under one contract. These schemes are provided for employees, associations, societies, etc. Group insurance are more affordable than other individual insurance plans and also beneficial to those who cannot afford individual life insurance.

insurance glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
  • Abstract

    A brief history of title to land
  • Accelerated death benefit

    A percentage of the policy?s face amount, discounted for interest, that can be paid to the insured prior to death, under specified circumstances. This is in lieu of a traditional policy that pays beneficiaries after the insured?s death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.
  • Accident & Accidental Death Benefit

    In the context of life insurance, accident or accidental death is defined as a sudden and unforeseen happening that causes disability or death of the policyholder.
  • Accident and health insurance

    Coverage for acci-dental injury, accidental death, and related health expenses. Benefits will pay for preventative services, medical expenses, and catastrophic care, with limits.
  • Accidental death benefit

    An endorsement that pays the beneficiary an additional benefit if the insured dies from an accident.
  • Accidental Death Insurance

    Accidental Death Insurance provides coverage in the event of death due to accidental injuries, but not illness. In the event of death, payment is made to the insured\'s beneficiary. And most of these covers provide for cases for bodily injury (e.g., the loss of a limb), where the insured receives a specificed sum.
  • Accounts receivable (debtors) insurance

    Indemnifies for losses that are due to an inability to collect from open commercial account debtors because records have been destroyed by an insured peril.
  • Accumulation Period

    The time interval between the commencement of the policy and the time when benefits are paid out. It is established by the insured.
  • Activities of daily living

    Activities-such as eating, bathing, toileting, dressing, and continence-that trig-ger payment in a long-term care insurance policy, if at least some of them cannot be performed by the insured.
  • Acts of god

    Perils that cannot reasonably be guarded against, such as floods and earthquakes.
  • Actual cash value

    A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation.
  • Actual loss ratio

    The ratio of losses incurred to premiums earned actually experienced in a given line of insurance activity in a previous time period.
  • Actuarial cost assumptions

    Assumptions about rates of investment earnings, mortality, turnover, salpatterns, probable expenses, and distribution or actual ages at which employees are likely to retire.
  • Actuarial Cost Method

    A method that determines contributions that would be made under an insurance plan.
  • Actuary

    An insurance professional skilled in the analysis, evaluation, and management of statistical information. Evaluates insurance firms? reserves, determines rates and rating methods, and determines other business and financial risks.
  • AD&D

    Accidental Death and Dismemberment Benefits
  • Additional insureds

    Persons who have an insurable interest in the property/person covered in a policy and who are covered against the losses outlined in the policy. They usually receive less coverage than the pri-mary named insured.
  • Additional living expenses

    Extra charges covered by homeowners policies over and above the policy-holder?s customary living expenses. They kick in when the insured requires temporary shelter due to damage by a covered peril that makes the home temporarily uninhabitable.
  • Adjustable Life Insurance

    A facility allowing a life insurance policy owner to change the insurance plan, increase or decrease the premium and make changes in the protection period.
  • Adjuster

    An individual employed by a property/cas-ualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyhold-ers, and receive a portion of a claims settlement. Inde-pendent adjusters are independent contractors who adjust claims for different insurance companies.
  • Admitted company

    An insurance company licensed and authorized to do business in a particular state or country.
  • Adverse selection

    The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all. In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance. works best when risk is shared among large numbers of policyholders.
  • Affinity sales

    Selling insurance through groups such as professional and business associations.
  • Affirmative warranty

    An agreement between an insurance company and an agent, granting the agent authority to write insurance from that company. It specifies the duties, rights, and obligations of both parties.
  • After Tax Rupees

    This refers to the disposable income that the policy holder has in his hands after paying all tax dues during a particular financial year under the Income Tax Act.
  • Age Limits

    The maximum and minimum ages above or below which an insurance company will not accept applications for insurance from or will not renew a policy with a person.
  • Agent

    Insurance is sold by two types of agents: inde-pendent agents, who are self-employed, represent several insurance companies and are paid on commission, and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.
  • Agent (Life Advisor)

    A representative of an insurance company authorized to sell insurance policies.
  • Aggregate deductible

    A type of deductible that applies for an entire year in which the insured absorbs all losses until the deductible level is reached, at which point the insurer pays for all loses over the specified amount.
  • Aggregate limits

    A yearly limit, rather than a ?per occurrence? limit. Once an insurance company has paid up to the limit, it will pay no more during that year.
  • Aleatory contract

    A legal contract in which the outcome depends on an uncertain event. Insurance contracts are aleatory in nature.
  • All-risk agreement

    A property or liability insur-ance contract in which all risks of loss are covered except those specifically excluded; also called ?open perils policy.?
  • Alternative dispute resolution (ADR)

    Alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.
  • Alternative markets

    Mechanisms used to fund self-insurance. This includes captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance, are also a form of self-insurance.
  • Ancillary charges

    In hospital insurance, covered charges other than room and board.
  • Annual statement

    Summary of an insurer?s or rein-surer?s financial operations for a particular year, including a balance sheet.
  • Annual-premium annuity

    An annuity whose purchase price is paid in annual installments.
  • Annuitant

    : An individual receiving benefits under an annuity.
  • Annuity Certain

    An insurance contract that provides an annuity for a certain number of years, irrespective of whether the insured is alive or dead.
  • Annuity Consideration

    The payment that an annuitant makes for an annuity.
  • Annuity units

    A measure used in valuing a variable annuity during the time it is being paid to the annui-tant. Each unit?s value fluctuates with the performance of an investment portfolio.
  • Apportionment

    The dividing of a loss proportion-ately among two or more insurers that cover the same loss.
  • Appraisal

    A survey to determine a property?s insura-ble value, or the amount of a loss.
  • Arbitration

    Procedure in which an insurance company and the insured or a vendor agree to settle a claim dispute by accepting a decision made by a third party.
  • Arson

    The deliberate setting of a fire
  • Assessable policy

    A policy subject to additional charges, or assessments, on all policyholders in the company.
  • Asset-backed securities

    Bonds that represent pools of loans of similar types, duration and interest rates. Almost any loan with regular repayments of principal and interest can be securitized, from auto loans and equipment leases to credit card receivables and mortgages.
  • Assign

    To use life insurance policy benefits as collat-eral for a loan.
  • Assignee

    Assignee is the person to whom the title, rights and benefits under a life policy are assigned.
  • Assignor

    Assignor is the policyholder who transfers the title, beneficial interest and rights under the policy to another individual.
  • Asymmetric information

    An insured?s knowledge of likely losses that is unavailable to insurers.
  • Attained Age

    It is your current age.Your attained age is one of the factors life insurance companies use to determine your premiums. As the older you are, the probability of death during the period of insurance cover i.e life insurance risk increases and so does the premium. Higher the risk, higher the premium.
  • Authority

    The Insurance Regulatory and Development authority, IRDA established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 is the regulator for the insurance sector.
  • Auto insurance premium

    The price an insurance company charges for coverage, based on the frequency and cost of potential accidents, theft and other losses.
  • Automatic coverage

    An insurer agrees to cover accidents from all machinery of the same type as that specifically listed in the endorsement.
  • Automatic treaty

    An agreement whereby the ceding company is required to cede some certain amounts of business and the reinsurer is required to accept them.
  • Average adjusters

    A name applied to claims adjusters in the field of marine insurance.
  • Aviation insurance

    Commercial airlines hold prop-erty insurance on aeroplanes and liability insurance for negligent acts that result in injury or property damage to passengers or others. Damage is covered on the ground and in the air. The policy limits the geographical area and individual pilots covered.