Do you know all terms of Life Insurance? It can be tricky to read a contract full of words that we don’t usually use.
Need a dictionary? Now it’s easier with our glossary!
It is not always easy to understand all the different and technical terms in this area of Life Insurance, is it?
In this financial education Post, we will help you by uncovering the words that cause the most questions when evaluating a proposal, reading your contract, or understanding how to claim.
Now, with the information on this list, you’ll understand everything with a lot of ease!
Check it out:
The Most Used Terms of Life Insurance
Policy: it is the contract between the insurance company and the client, which contains the description of everything that is being insured, its guarantees and coverage, and also the rights and duties of both.
Assistance: is the provision of extra service to the contracting party or its beneficiaries that goes beyond your contract, such as, for example, an electrician service for your home, towing services for your car, or assistance for your pet, among others.
Claim Notice: is the communication that the insurance client or beneficiary makes to the insurance company that something foreseen in the contract has happened, such as the death of the contracting party or a personal accident.
Beneficiary: is the person who will receive an indemnity. This beneficiary can be the policyholder himself, as in the case of disability coverage, or another person, as in the case of death.
Insured capital: is the amount of compensation stipulated in your contract, which corresponds to the maximum that will be paid in your insurance. Remember that it is possible that the full amount will not be paid, depending on what happens and what is established in the policy.
For example, in the case of coverage for a serious illness, the amounts to be paid are different according to each illness, receiving different percentages of the maximum amount provided.
Waiting period: is the period that the client is not yet covered, previously determined in his contract.
Coverages: are the situations that were foreseen in your contract with the insurance company, including cases that can be obligatory or optional, such as coverage for serious illnesses or temporary incapacity.
Daily allowance for temporary incapacity: this is coverage for cases in which the insured is away from his work due to some illness or personal accident. In this case, an amount will be paid for each day that the insured is away from work.
Pre-existing illnesses: are all illnesses that the insured knows he has before he takes out the insurance.
Policyholder: is the individual or legal entity responsible for contracting insurance coverage for a group and has the obligation of communicating to the insurer, the client, and SUSEP the necessary information regarding the insurance, such as registration data, changes in coverage, or irregular procedures.
Deductible: is an amount defined in the contract, which reduces the responsibility of the insurer and makes the insured share in the losses arising from each claim. In other words, the insured will have to pay a part of the indemnity if something covered happens. This amount can be obligatory or optional, in which the insured chooses if he has to pay the excess.
Indemnity: is the amount that the insurance company will pay the insured in case something is foreseen in his contract happens.
Permanent Disability; is when there is loss, reduction, or definitive functional incapacity, total or partial, of some member or organ. This is usually additional coverage and is guaranteed in cases of a covered accident or injury foreseen in the contract.
Claim settlement: is the process for paying compensation to the beneficiary, following the entire process determined in the contract.
Premium: is the amount paid by the insured to the insurance company for the insurance.
Proposer: is the person who intends to take out insurance and who has received a proposal for contracting it.
Adhesion proposal: is a document in which the proponent expresses his interest in joining the insurance and is an integral part of the contract.
Claim: is any occurrence foreseen in the insurance policy in which there is the possibility of activating the insurance company, such as death, illness, or personal accident.
Term: the beginning and the end of the validity period of the coverage and guarantees contracted in the insurance.
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We at insurancily value education and believe that the more access to education people have, the more they will be aware of the need to plan and protect themselves in the long term.