The A-Z Glossary of Term & Life Insurance

A for Apple and B for Ball are for kids. This A-Z is a thing for the adults who want to stay under a financial shield throughout their lives.

Let’s begin!

A: Annuity Plan

It is an insurance contract, which provides for an income for a specific duration of time, like for life or for a certain number of years.

B: Beneficiary

A beneficiary is an entity or person who is named as the recipient of the insurance benefit in case of the death of the policyholder.

C: Critical Illness Cover

If the policyholders have term insurance with critical illness, they will receive a lump sum amount if they are diagnosed with a specific disease that is predetermined on the insurance policy.

D: Death Benefit

It is the lump sum amount given to the nominee as named in the term insurance policy if the policyholder passes away within the term of the policy.

E: Exclusions

The exclusions are stipulated as the things that will not be included in the insurance plan. Hence, the exclusions will not offer any benefit to the policyholder or the nominees.

F: Fiduciary

A fiduciary is a person who is trusted by the beneficiary legally. In other words, the person legally appointed by the beneficiary who will act on his behalf whenever needed is a fiduciary.

G: Grace Period

Ideally, the policyholders have to pay their insurance premiums on time. However, the insured gets a certain amount of additional time, known as the grace period. During this period, the policyholder has the privilege of paying the premium amount without interest.

H: Hospital Benefits

This helps to cover the charges incurred while the policyholder is treated in a hospital, as defined on the life insurance policy.

I: Insured

This is a simple one. This term has already been used a lot of times above, so if you have been wondering who is insured, then, here’s your answer: The person who is covered under the policy is known as the insured.

J: Juvenile Insurance Plan

This is a life insurance plan bought by an adult for covering the life of a minor.

K: Keep reading to become a pro in the insurance vocabulary!

L: Lapsed Policy

The policy that gets terminated due to non-payment of insurance premiums is known as a lapsed policy. Usually, a policy will lapse when the premium is not paid even after the completion of the grace period.

M: Maturity Date

It is the date when the payment of the amount towards the insurance policy is provided to the policyholder at the end of the policy term.

N: Nomination

Nomination means the insured or policyholder authorizes another individual officially to receive the monetary benefits of the policy. This authorized individual is known as the nominee.

P: Premium

It refers to the amount that is paid by the policyholder, either periodically or lump sum, to the insurance provider under the insurance policy.

Q: Qualifying Event

It is the event or occurrence that triggers the insurance claim.

R: Rider

It is an addition to the insurance policy, which becomes a part of your contract, that either limits or expands the benefits, which would otherwise have been paid under the terms of the policy.

S: Surrender Value

It is the amount that is paid to the policyholder who wants to terminate the plan before its maturity stage.

T: Terminal Illness Benefit

This benefit pays the policyholders a lump sum amount in case they are diagnosed with a disease that will lead to their demise within 12 months. It is different from a term plan with critical illness. 

U: Underwriting

This is the process by which the insurance provider decides whether, and on what basis would an insurance application be accepted.

V: Vesting Age

It is the age at which the policyholder will start getting a pension from the insurance provider through an insurance-pension plan.

W: Waiting Period

It is the duration between the occurrence of the illness or injury and time the insurer pays the benefit.

X: Xcuse Me! 

Y: You know the majority of the insurance terms NOW. 

Z: Zapping your minds on insurance jargon is a thing of the past now.

Go on and make a well-informed decision while buying your life insurance policy!