A-Z things that everyone should know about term insurance

There are a number of phrases in a term insurance policy document that you might not understand or be familiar with. Continue reading to review the glossary of terminology used frequently in life insurance.

A term insurance is an extremely important document that specifies the financial protection your beneficiary or loved ones would be entitled to in the terrible event of your passing. However, it is crucial to comprehend the fundamental meaning of some of these terms that are frequently used in a life insurance policy so that you may understand what it means for you and your loved ones after you pass away.

Term insurance You Should Know: A-Z Glossary

The following is a list of the most well-known and commonly used terms in life insurance policies. Before purchasing a plan, we hope that this glossary will increase your understanding of life insurance jargon and enable you to make an informed choice.

• Annuity: A contract between an insurer and an insured that guarantees the latter a set sum of money each month for the rest of their lives is known as an annuity.

• Beneficiary: The term refers to the individual the insured has designated to receive the insurance benefit in the event of an untimely and unlucky passing. The life insurance policy is then amended to include the beneficiary’s name.

• Claim Settlement Ratio: Before obtaining an insurance policy, especially term life insurance, it is one of the most crucial determining variables. The Claim Settlement Ratio, or CSR, is the sum of all claims resolved by the insurance company as compared to all claims received or filed by the insured for a specific financial year. Be aware that a company’s reputation or trustworthiness in the market improves with stronger CSR.

• Death Benefit: The sum of money that the insurance company must pay to the insured’s beneficiary or nominee upon the latter’s passing in order to financially sustain the insured’s family.

Any hazardous situation at work or on the job that raises the risk of an accident, illness, disability, or even death for the insured under the plan is referred to as an “occupational hazard.”

Refers to the supplemental insurance policies that are added on top of the term insurance policy in order to gain more protection or coverage. To obtain various additional benefits, a variety of riders can be purchased in addition to the insurance policy.

• Surrender Value: The amount that the insurance company will pay to the insured if it decides to voluntarily quit or cancel the plan for whatever reason.

• Tax Benefits: Make reference to the deductions offered to the policyholder under the Income Tax Act of 1961 for the premiums paid under life insurance contracts.

• Unit Linked Insurance Plans: These are a kind of financial product offered by several insurance companies in India. The main benefit that ULIPs provide to their owners is the opportunity to invest while still receiving insurance.

The bulk of life insurance companies in India use a variety of terminologies, some of which are covered in this article. You can search for the best life insurance plan provided by ICICI and select the one that best satisfies your financial needs.