Simple Insurance Policy Key Terms Explained

What are the key features of insurance policies?

• Coverage Limit: The maximum amount the insurance company will pay under the terms of the policy.
• Premium Payment: The amount of money the policyholder is required to pay at specific intervals (e.g., monthly, quarterly, annually) to maintain the insurance coverage.
• Deductible: The amount the insured must pay out-of-pocket before the insurance company covers the financial losses.
• Replacement Cost: In property insurance it refers to the amount it would take to replace or rebuild your property or repair damages with materials of similar kind and quality without deducting for depreciation.
• Exclusions: What is not covered by the insurance policy.
• Due Date: The date by which the premium payment needs to be made to avoid lapsing of the policy.
• Grace Period: A specified duration after the due date during which the premium payment can still be made without penalty or lapse of coverage.

What are terminologies and insurance policy key words?

• Insurance Coverage: The protection that the insurance provides against a specific loss.
• Liability Insurance: Protects the policyholder in case they are sued for claims that come within the coverage of the insurance policy.
• Sum Assured: The guaranteed amount the policyholder or their beneficiary will receive. This is common in term life insurance.
• Evidence of Insurability: Documentation or information proving a person's insurability or their qualification for an insurance policy, often required when applying for or increasing insurance coverage.
• Insurance Contract: The written agreement between the insurance company and the policyholder detailing the terms and conditions under which insurance covers the risks.

What are some other terms for the insurance policyholder?

• Insured: Another term for the insurance policyholder.
• Policy Owner: The person or entity that owns the insurance policy, which can be different from the insured.
• Beneficiary: The individual or entity designated to receive the insurance proceeds upon the death of the life assured or at the policy's maturity.
• Insurant: A less common term for the insured or policyholder.

Take a look at UNDERSTANDING INSURANCE POLICY WORDING for further terminology and jargon busting.