In our last lesson, we looked at the meaning of insurance, the types and why insurance is important. In this lesson we shall attempt to look at some key terms used in Insurance.
1. Insurer: The seller of an insurance. Eg Union Assurance PLC.
2. Insured/Policy Holder: The person buying buying the insurance policy.
3. Premium: Amount of money to be charged for certain amount of insurance.
4. Insurance Policy: A contract between the insurer and the insured which determines the claims the insurer is legally required to pay.
5. Indemnity: An obligation by a person (Indemnitor) to provide compensation for a particular loss suffered by another person (Indemnittee).
6. Peril: Cause of loss eg fire, windstorm, hail or theft
7. Hazard: A condition that may create or increase the chance of a loss arising from a given peril or under a given condition.
8. Sum Assured: The amount of money a life insurance policy guarantees to pay at the event of risk occurring.
9. Surrender Value: The amount given back to the insured when he discontinues the policy.
10. Paid Up Value: A reduction in the sum assured when a policy holder stops paying the premiums, but do not withdraw the money from his policy.
11. Rider: An optional feature added to a policy
12. Annuities: Regular payment the insurance company will guarantee at some future date.
13: Claims: A formal request to an insurance company asking for a payment based on the terms of the insurance policy.
14. Lapsed Policy: A situation in which all benefits to a policy holder is terminated due to non payment of premium. An Insurance Policy will lapse if the policy holder does not pay premium.
15. Deductible: Fixed amount or percentage of an insurance claim that is the responsibility of the insured, and which the insurance company will deduct from the claim payment.
Watch Out for our next tutorials on Insurance
*Michael Onjewu is a Risk Analyst with Union Assurance PLC. 07032879723, twitter @MikoOnjewu
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