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Faq

  • What is a medical examination when buying insurance?

    An individual buying insurance for a sum of Rs 600,000 and above has to undergo a medical examination. This is done by the insurance company since it needs to ensure that the prospective client is healthy. Also the company wants to verify that the objective of buying a policy is to insure against a risk and not to deceive the company

  • I am healthy. Why should I take health insurance?

    Insurance cover is always available for uncertain event; once we suffer from any disease it is difficult to take coverage for such disease. Life is full of uncertainties we do not know when we will be suffer from diseases and accident so, it is better to take health insurance when we are healthy. When we are healthy we have number of choices available and we can choose the best and affordable plan for us.

  • 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

  • What are the basic elements of Life Insurance?

    The two basic elements of life insurance are Risk coverage (i.e. Term Insurance) and savings for the future (i.e. Pure Endowment)

  • Why do I need Insurance?

    You need insurance for
    Family that is financially dependent on you: If you have a family that is financially dependent on you, then you definitely need to insure yourself. The most common reason to buy life insurance is it provide protection to your family incase of any unforeseen events. The life insurance proceeds can be used to support your family members with the expenses.

    Loans or liabilities: It is very important to insure yourself if you have taken a loan or mortgaged your assets. It not only provides peace of mind but also a steady source of income for your family

    Compulsory saving-cum-investment: A life insurance policy could be used as a compulsory saving-cum-investment avenue. Proceeds from the insurance policy could be used to fund future expenses such as child’s higher education or retirement funds or even a well-deserved holiday.

    Partner in a firm or Self-employed: It is highly needed by people who are partners in a firm or have their own proprietor firms. Life insurance can be a critical component for specialized business applications - such as funding a buy-sell agreement. The proceeds of a life insurance policy could be used to provide cash for the purchase of a deceased owner’s interest in the business or to pay off business liabilities.

    Other than the RBI Bonds, insurance products are the only other investment products that guarantee yields over a range of time - from 5 years to 25 years. Insurance companies offer single premium investment products as well as regular investment-cum-insurance products that guarantee high yields over a period.

    Source: SBI Life Insurance

  • What is a Whole Life insurance product?

    Whole life insurance risk covers the death of the insured, whenever it may happen. It means that there is no fixed term under whole life insurance. Most policies provide a dividend to the policy holder which helps with retirement.

    There are two variations in the whole life insurance products i.e.

    Pure Whole Life Insurance: - where premiums are payable continuously throughout the life of the insured till death. Risk coverage is for the entire duration of life and the life insured amount is paid on the happening of the death of the insured at any time.
    Limited Payment Whole life Insurance: - where premiums are paid for a limited and shorter period and the option of the insured or till death if earlier. Risk coverage is however throughout the life of the insured.

    Source: SBI Life Insurance

  • 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.

  • How long will it take for the Insurance Repository to open AN e Insurance Account?

    The Insurance Repository will open an e Insurance Account within 7 business days from the date of receiving the eIA application form. On opening the e IA, the Insurance Repository will inform the applicant the particulars of the e Insurance Account and usage instructions through email and by post.

  • Is it compulsory for all Insurance Companies to offer electronic policies?

    Yes. It is the policy holder’s prerogative to opt for a policy in electronic form. If a policy holder wants his/her policy (either new purchase or existing) in electronic form, then the Insurer is bound to fulfill his / her requirement.

    The choice of a Repository for opening an e IA is the prerogative of the policy holder and hence all Insurance Companies will need to work with all the Insurance Repositories.

    Initially, repository service will be available for life insurance only; over time, health and general insurance (personal lines only) will also be brought within the ambit of repository services.

  • How much does life insurance cost?

    The cost of buying an insurance policy depends on the following factors:
    The insured person’s age, health and his nature of work
    Type of policy selected
    Sum assured
    Policy terms
    Term for paying premium and payment frequency
    Riders (if any) attached to the policy
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insurance glossary

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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.
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