This is the second part of Insurance Terms named Terminology in Insurance sharing more glossary words of Insurance which are technical words of insurance but to be known to us.
Money Back Policy
In layman’s language, a money-back policy is where the insurer gets its money back but as per the Life Insurance Corporation – the policy in which the policyholder gets periodic survivance payments during the term of the Policy and lumsum amount on surviving its terms. In this, the beneficiary gets the full sum assured on surviving.
Moral Hazard
The risk depends on the need for insurance, state of health, personal habits standard of living, and income of insured person. Moral hazard is the risk factor that affects the decision of the insurance company to accept the risk.
Nomination
An act by which the policyholder authorizes another person to receive the policy money. The person so authorized is called Nominee.
Premium
The payment, or one of the regular periodic payments, that a policyholder makes to an insurer in exchange for the insurer’s obligation to pay benefits upon the occurrence of the contractually-specified contingency (e.g., death)
Premium Back Term Insurance Plans
These provide for a refund of all the premiums paid, in the event of the life assured surviving to the end of the policy term. The total sum assured is paid to the beneficiaries in the event death occurs during the policy term.
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Salary Saving Scheme
This scheme provides for payment of premiums by money deduction from the salary of the employees by one employer.
Surrender Value
It is the value payable to the policyholder when he/she decides to terminate his/her policy before the maturity of the service.
Survival Benefit
It is due given back to the policyholder on the survival of the policy under money-back insurance.
