3rd Party Insurance: Motor third-party insurance or third-party liability cover, is called as ‘third-party’ cover since the beneficiary of the policy is someone other than the two parties the car owner and the insurance company involved in the contract.
Absolute Assignment: An absolute assignment is the act of complete transfer of the ownership of the policy to other party without any terms and condition.
Accidental death benefit and Dismemberment: Accidental death benefit is an additional benefit paid to the policyholder in the event of his death due to an accident. Dismemberment benefit is paid if the insured dies or loses his limbs or sight in the accident.
Actuaries: A person who is the expert in the fields of economics, statistics and mathematics, who helps in risk assessment and estimation of premiums etc for an insurance company, is called an actuary.
Adverse selection: When insurer is confronted with the probability of loss due to risk not factored in at the time of sale. This occurs in the event of an unbalanced flow of information between the insurer and the insured.
Agent: An agent is a person who sells insurance policies of insurance company on its behalf.
Annualized Premium: Amount of premium paid annually is called the annualized premium.
Annuitant : An individual named in the contract who is entitled to receive the income benefits from the annuity is called Annuitant.
Assessed Value: For the purpose of taxation, a property is assessed for its monetary worth for the purpose of taxation and the value obtained in this way is assessed value.
Assignee: A person, an entity or a trust who receives the rights, ownership and benefits of an insurance policy is the assignee.
Assignor: A party who transfers the rights of holding contract to another party (assignee) is called the assignor.
Auto Insurance or Motor Insurance: It provides cover for loss or damage to any vehicle such as car, two-wheeler or commercial vehicle, etc.
Bancassurance: Insurance company come up in a partnership with Banks to sell their Insurance products and Selling insurance product through banks is called as Bancassurance.
Beneficiary: the beneficiary is the person entitled to receive the claim amount and other benefits upon the death of the insured or on the maturity of the policy.
Ceding company: Ceding Company is an insurance company that transfers a share of insurance portfolio to a reinsurer. The insurer however is liable to pay the claims in the event of default by the reinsurer.
Claim amount: Claim can be defined as the sum payable at the maturity of an insurance policy or upon death of the person ins tsured. This amount is payable to the beneficiary or the nominee or the legal heir of the insured.
Claim Handling Cost: Costs incurred by the insurance company in processing and administration of insurance claims are called claim handling cost.
Concealment: Concealment is the act of hiding any relevant fact from the insurer that need to be revealed and may lead to loss to the insurer.
Conditional Assignment: Through assignment a life insurance policy holder (assignor) can transfer rights of the policy to the assignee, according to some terms and conditions. Under, conditional assignment, the rights of the policy gets transferred back to the assignor if he/she has fulfilled the conditions under which the rights of the policy were transferred.
Contingent Beneficiary: In a life insurance policy or an annuity plan, contingent beneficiary is required in the event of a demise of the primary beneficiary at the same time as that of the insured.
Dating Back: Dating Back is a facility under which a insured person can ask the insurer to start the policy from an earlier date than the one on which he actually signs the policy.
Embedded value: Sum of the net asset value and present value of future profits of a life insurance company is called as Embedded Value.
Exclusions: Those cases for which the insurance company does not provide coverage are called as Exclusions.
Expense loading: The amount charged by an insurance company for its administrative and maintenance costs is called as Expense Loading.
First Class Life: When there is low life risk present for any person then it is called as First class life.
First Unpaid Premium: When any policyholder defaults on premium payments for the first time then it is called as First Unpaid Premium.
General Insurance: Insurance other than life insurance is called as general insurance.
Group policy: The policy that provides coverage to a group of people is called as group policy. Group can be formal or informal.
Indemnity: Compensation payments to one party by the other for the loss occurred are called as Indemnity.
Insurability: The characteristic of being acceptable for insurance is called insurability.
Insurable interest: the reasonable concern of a person to obtain insurance for any person or property against unexpected events such as death, losses, etc. is called as Insurable interest.
Insurable Risk: A risk that fulfills the norms and specifications of the insurance policy is called insurable risk.
Insurance : Insurance policy is a contract between the policyholder and the insurance company, under which insurance company promises to pay the financial loss undertaken by the policyholder on happening of certain specified event.
Investment risk: It is defined as probability or likelihood of occurrence of losses relative to the expected return on any particular investment.