Going to buy insurance policy or just going to renew it, you must know about these terms in order to buy the best fit for your needs and future. It may not seem necessary at first to buy insurance or read & know a long list about the product but believe us that you are going to get a ton if you give a certain minute to your future planning.
To ease your pain, we are going to tell you some insurance terms that are going to be helpful to get more hold of the product and understanding the deliverables as desired and also don’t get fooled by some fake promises done by the person who insures you.
Things to know before buying any Insurance
- Policy Holder
The Policy Holder is the owner of the policy and she/he may or may not be the insured person in short, the person who purchases the policy and pays the premium is the Policy Holder.
- Life Assured
It is the person whose life is covered in the insurance contract. In the event of a contingency, the insured can claim the amount or in the event of death of the life assured, the nominee will receive the insurance amount.
- Sum Assured (Coverage)
The financial loss during any disease or untimely death of a person is generally chosen depending on the product. In technical terms, ‘Sum Assured’ is the term used for an amount that the insurance company agrees to pay to the policyholder on any insured event.
The ‘Nominee’ is the person (legal heir) selected by the Policy Holder who will receive the death benefit in the absence of the Policyholder. The nominee needs to claim the death benefit, if the life assured dies during the policy tenure. The nominee could be wife, child, parents of the policyholder etc.
- Policy tenure
The ‘policy tenure’ is the duration for which the policy provides life insurance coverage. The policy tenure depends upon the type of insurance plan and its terms & conditions.
The premium is the amount you pay to keep the life insurance plan active and enjoy continued coverage. If you are unable to pay the premium before the payment due date and even during the grace period, the policy terminates.