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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.

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If you have been declined whilst trying to claim on your domestic or commercial insurance, we can help. We can also help with professional services, for example, Brokers, VAR Valuations and Managing Agents.