When you’re on a lookout for a life insurance, you will undoubtedly run over some new terms. Insurance language can for sure be hard to grasp regardless of how you look like at it. Understanding key insurance terms is greatly pivotal when you’re endeavouring to limit on the best decision else you may wind up purchasing whatever the agent recommends. Whether you’re beginning your hunt for a policy or you just got affirmed for one, here are some essential terms that you should get a grip on when you’re buying or investigating life insurance on the web.
The person in whose name the insurance policy has been taken is as a rule referred to as the insured. Generally, the insured owns the policy, it must be said that the protected need not generally be the policyholder. The insured is the individual on whose name the policy has been obtained and it can be acquired by anyone. For occurrence, on the off chance that you have taken out an insurance policy in your name, you are the policyholder while also being the one who is insured. Additionally, the person whom you name as the nominee is the person who will get the guaranteed sum in the occasion something untoward were to transpire amid the time frame.
The insurance agency that offers the policy to the insured is referred to as the Insurer.
Premium is the amount you pay to the insurance agency to purchase a policy. Premiums can be either made in a single payment mode which is a lump sum paid as a premium at one go or for a limited period which means you pay for certain number of years or annually . A single premium policy requires that the policy holder pays only one lump sum amount while a yearly premium arrangement will require him/her to pay each year.
Sum Assured and Maturity Value
Sum assured is the sum an insurance agency guarantees to pay to the policyholder or the beneficiary if the said conditions specified in the policy emerge. Sum assured is essentially the coverage and the aggregate sum you are protected for.
Maturity Value is the sum the insurance agency provides for the protected or the policyholder at the end of policy term. Premise the sort of policy picked, the maturity value can either be guaranteed or can change depending on the bonus or performance of funds.
Rider is an optional add-on or a supplementary advantage that can be added to the primary policy. These riders are charged at nominal extra cost which is added to the premium. It can be taken with a policy and an alternate coverage i.e. accidental death, accidental total and permanent disability.