Life Insurance Jargon Buster!
Insurance can be a treacherous place if you do not understand the lingo. Life insurance especially.
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Insurance Plan/ Policy
This Plan provides a guaranteed amount called sum assured at maturity of the plan or on the death of the Life Assured on condition that a valid claim is lodged and Claim requirements have been satisfied
.The application form, the Terms and Conditions, the Plan, Schedule, and any Endorsement will constitute the Plan.
Level Term policy
This is a life insurance policy that provides protection for a specific term e.g. 10 years, 20 years, etc (time you feel your beneficiaries need you the most). When the term is over, there is no payout if no death occurred. Cheapest life cover.
Decreasing Term Policy
This is a term cover whose value will reduce over the term of the policy. This is typically used in line with a mortgage or a loan (because of reducing balance). This is to stop loved ones from being left with our debts.
Whole Life Policy
This is a life insurance policy that provides protection during your entire lifetime. You cannot outlive this policy. This is usually used to leave legacy money, an inheritance to descendants.
The Insurer is a registered financial services provider that underwrites the benefits under this plan, in this case, life insurance.
The Life Assured shall be the Person who is eligible for Cover under the Plan.
The person who owns the insurance policy.
This is the insurance that is given to the Life Assured on condition that the Premium is paid. Ends upon claim made according to policy
This allows both parents to be covered under the same plan.
Benefit refers to the lump sum monetary consideration, as defined, that is payable to the Policyholder or beneficiary on condition that the Eligibility Conditions have been met, valid claim lodged and all other Terms and Conditions of this Plan met.
This is the monetary amount set out in the Plan Schedule which the Policyholder or beneficiary is entitled to in the event of a claim.
The endorsement shall mean any schedule, letter, or other document issued by the company to the Policyholder that alters the provisions, conditions, definitions, or schedule in this Plan.
This refers to someone eligible to receive distributions from a trust, will, or life insurance policy.
Shall be the person nominated to receive death benefits in the event that the child is a minor at the point a claim is made.
Maturity Date shall mean the date provided in the Plan Schedule when the sum assured is paid out after expiry of the insurance period. Maturity benefit will be paid to the Policyholder
It is the amount the policyholder will get from the life insurance company if he decides to exit the policy before maturity.