Glossary Of Life Insurance Terminology

Agent

An insurance company representative licensed by the state who solicits and negotiates contracts of insurance, and provides service to the policyholder for the insurer. An agent can be independent agent who represents at least two insurance companies or a direct writer who represents and sells policies for one company only.

Annuity

A contract that provides a periodic income at regular intervals, usually for life.

Annuity Certain

A contract that provides an income for a specified number of years, regardless of life or death.

Application

A statement of information made by a person applying for life insurance. It helps the life insurance company assess the acceptability of risk. Statement made in the application are used to decide on an applicant’s underwriting classification and premium rates.

Beneficiary – The person named in the policy to receive the insurance proceeds at the death of the insured. Anyone can be named as a beneficiary.

Bonus Rate Annuity

An extra percent of interest credited to an annuity during the first year that it is in force. The extra amount is above the interest rate to be credited beginning the second year and the remaining years that the annuity is in force. The extra rate is paid in the first year in an effort to attract new policyholders.

 Surrender Value

The amount available in cash upon voluntary termination of a policy by its owner before it becomes payable by death or maturity. The amount is the cash value stated in the policy minus a surrender charge and any outstanding loans and any interest thereon.

 Claim

It is a formal request to an insurance company to pay out the benefit covered under the contract of life insurance policy. ALSO READ https://legitupdate.com/insurance-policy-procurement/

Premium

Is the money you pay to the insurance company to avail of insurance policy benefits.

Sum Insured

Sum insured is applicable for a non-life insurance policy like home and health insurance. It refers to the maximum cap on the costs you are covered for in a year against any unfortunate even