Planning to Purchase a Life Insurance Plan. Here is the List of The Most Important Terms of Life insurance Policy You Should Know.

Lets Check Them.

Policyholder: The Policyholder is the legal owner of this policy, Who Purchases the insurance policy and pays the Premium of the Policy.

UIN : UIN means the Unique Identification Number allotted to the Insurance Policy by the IRDAI.

Beneficiary: Beneficiary means the person who is entitled to receive benefits under The Policy. The Beneficiary may be proposer or Life Assured or his Assignee or Nominees or proved Executors or Administrators or other Legal Representatives as the case may be.

Nominee: Nominee is the person who has right to give a valid discharge to the policy monies in case of the death of the Life Assured.

Minor: Minor is a person who has not completed 18 years of age

Appointee: Appointee is the person to whom the proceeds/benefits secured under the Policy are payable if the benefit becomes payable to the nominee and nominee is minor as on the date of claim payment.

Life Assured: Life Assured is the person on whose life the insurance cover has been accepted.

Premium: Premium is the contractual amount payable by the Policyholder at specified times periodically as mentioned in the schedule of the Policy Document to secure the benefits under the policy. The premium payable will be “Total Installment Premium” which includes installment Premium for Base Policy and installment Premium for Rider, if Rider has been opted for, and This does not include any taxes.

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Terms of life insurance Policy You Should Know

Policy term: Policy term is the period, in years, from the Date of commencement of policy during which the contractual benefits are payable as per the terms and conditions of the policy.

Policy Document: Policy Document Means the document along with endorsements, if any, issued by the Insurance Company which is a legal contract between the Policyholder and the Insurance Company.

Due Date: Due Date means a fixed date on which the policy premium is due and payable by the policyholder.

Annualized Premium: Annualized Premium is the total amount of premium payable in a policy year excluding extra amount if charged under the policy due to underwriting decisions and rider premiums, if any.

Assignee: Assignee is the person to whom the rights and benefits are transferred by virtue of an Assignment.

Assignment: Assignment is the process of transferring the rights and benefits to an “Assignee”. Assignment should be in accordance with the provisions of section 38 of the Insurance Act, 1938 as amended from time to time.

Base Policy: Base Policy is that part of the Policy referring to basic benefit (benefits referred in the policy document excluding the benefits covered under Rider(s), if opted for).

Date of commencement of policy: Date of commencement of policy is the start date of the Policy.

Date of commencement of risk: Date of commencement of risk is the date on which the Insurance Company accepts the risk for insurance (cover) as evidenced in the schedule of the policy.

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Terms of life insurance Policy You Should Know

Date of Maturity: Date of Maturity is a fixed date on which benefit may become payable either absolutely or contingently.

Date of vesting: Date of vesting is the date from which the Life Assured becomes entitled to the policy benefits.

Maturity Benefit: On Life Assured surviving the stipulated Date of Maturity provided the policy is in-force, Sum Assured on Maturity along with vested Simple Reversionary Bonuses and Final Additional Bonus, if any, shall be payable. Where Sum Assured on Maturity is equal to Basic Sum Assured.

Death Benefit: Death Benefit refers to the benefit, agreed at the inception of the contract, which is payable on death of Life Assured as specified in conditions of the Policy document.

Foreclosure: Foreclosure is an action of closing the policy due to default in payment of outstanding loan and/ or loan interest on due date.

Free Look Period: Free Look Period is the period of 15 days from the date of receipt of the policy document by the policyholder to review the terms and conditions of the policy, where the policyholder can disagree to any of the terms and conditions and has the option to return the policy.

Grace period: Grace period is the time granted by the insurer from the due date for the payment of premium, without any penalty/ late fee, during which time the policy is considered to be in-force with the risk cover without any interruption as per the terms of the policy.

Guaranteed Surrender Value: Guaranteed Surrender Value is the minimum guaranteed amount of Surrender Value payable to the policyholder on surrender of the policy.

Lapse: Lapse is the status of the Policy when a due premium is not paid within the grace period.

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Terms of life insurance Policy You Should Know

Maturity Benefit: Maturity Benefit means the benefit, which is payable on maturity i.e. at the end of the policy term as specified in conditions of the Policy Document, on life assured surviving the stipulated Date of Maturity.

Paid-Up: Paid-Up is the status of the Policy if the premiums are paid for at least 3 full years and subsequent premiums are not paid within the grace period.

Policy Anniversary: Policy Anniversary means one year from the date of commencement of the Policy and the same date falling one year thereafter, till the date of maturity.

Premium paying term: Premium paying term means the period, in years, during which premium is payable.

Proposer: Proposer is a person who proposes the life insurance proposal.

Revival: Revival of a policy which was discontinued due to the non-payment of premium, means restoration of the policy by the insurer as per underwriting decision, upon the receipt of all the premium due and other charges/ late fee, if any, as per the terms and conditions of the policy, upon being satisfied as to the continued insurability of the insured on the basis of the information, documents and reports furnished by the policyholder, in accordance with the then existing underwriting guidelines.

Revival Period: Revival Period is the period of two consecutive years from the date of discontinuance of the policy, during which, The policyholder is entitled to revive the policy which was discontinued due to the nonpayment of premium.

Rider: Rider is an add-on benefit in addition to basic Policy coverage benefits as specified in the Policy Document.

Schedule: Schedule is the part of policy document that gives the specific details of your policy.

Simple Reversionary Bonus: It is the surplus/profit added by the Insurance company to ‘with-profits’ policies. It is declared per thousand Basic Sum Assured at the end of each financial year.

Sum Assured : Sum Assured on Death is the assured amount payable on death during the policy term.

Sum Assured on Maturity: It is the absolute amount payable on maturity as mentioned in Conditions of The Policy Document.

Surrender: Surrender means complete withdrawal / termination of the entire policy before maturity.

Surrender Value: Surrender Value means an amount, if any, that becomes payable in case of surrender in accordance with the terms and condition of the insurance policy.

Vested Bonus: Vested Bonus is the reversionary bonus, if any, which has already been declared and remains attached to the policy.

Underwriting: Underwriting is the term used to describe the process of assessing risk and ensuring the cost of the cover is proportionate to the risks faced by the individual concerned. Based on underwriting, a decision on acceptance or rejection of cover as well as applicability of suitable premium or modified terms, if any, is taken.

Hope You Found This List Helpful.

Also Check,

Why buy a life insurance policy?

भारत में जीवन बीमा (Life Insurance) पॉलिसी के प्रकार

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