Insurance guarantees financial assistance for a predefined loss in exchange for a recurring charge. Insurance protects a person, company, or organization from unexpected losses. We’re all acquainted with insurance, yet we frequently overlook vital details.
We’ll describe several terminologies your insurance agent may use while discussing coverage. We hope this glossary clarifies your insurance coverage.
Sum guaranteed means cover, which is the amount paid out if you die within a policy’s term. In an endowment policy, the Sum Assured is paid out on maturity together with the bonus, while in a money-back policy, a part of the Sum Assured is paid out at regular intervals.
Periodic donation is the amount paid out at maturity independent of a bonus, depending upon the policy.
The property owner is typically compelled to pay a premium in exchange for the insurance company’s pledge to reimburse any economic losses within the agreed-upon coverage region.
Bonus refers to the extra money added to a life insurance policy’s “base sum assured.”
Surrender value is the amount an insurer must pay a policyholder who terminates an investment-based plan after the three-year lock-in period but before the policy’s maturity date. The paid premium, surrender fees, and loan amounts are subtracted from the total.
Endowment policies pay out an amount to the policyholder if they outlast the policy period or to the beneficiary if they die before the policy matures.
Term life insurance is a kind of life insurance that offers extensive coverage for lower rates. Term life coverage is term life insurance. Only if the insured dies during the insurance term will the beneficiary get the cover amount. Unlike endowment plans, term life insurance provides no reward if the insured person lives after the policy ends. Financial advisors can help find the best insurance solution.
Whole life insurance gives out payments regardless of when or how the insured person dies. The premium might be paid for a certain number of years or life.
Unit Linked Insurance Policy (ULIP) is a kind of life insurance policy that combines investment and risk coverage. The remaining monies are invested in equity and debt units. A percentage of the money invested in a ULIP pays for insurance coverage.
A money return plan is an insurance policy in which the policyholder gets a part of the covered amount at regular intervals and bonuses upon maturity.
A rider is an optional addendum to an insurance policy. It may enhance or reduce insurance coverage.
Survival benefits are paid by an investment-based plan if a policyholder survives the policy’s length. In most situations, guaranteed additions or bonuses have accrued.
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