Glossary of Insurance

Accelerated Death benefits: This life insurance policy option comes into play if the insured gets terminally ill. Then the proceeds are made available over the lifetime of the insured. What ever the insurance company pays during this period is deducted from the death benefits that are paid to the beneficiaries of the policy.

Actuary: He or she is an insurance professional who is well adept in analysis, evaluation and management of statistical data. They calculate the business and financial risk by determining the reserves, rates and rating methods.

Annuity: It is a type of life insurance that forwards periodic income benefits to the insured for a specific time period of annuitant’s lifetime. There are two types of annuity - Deferred and Immediate.

Fire Insurance: This insurance policy covers the property against fire and lightening. It is a type of homeowner or commercial multiple peril policy.

Group Insurance: It is a single insurance policy that covers a group of individuals such as company employees, association members etc. The Master policy is issued to the employer or the association.

Home Owners’ Insurance Policy: This insurance policy covers house, garage and other property structures along with all the personal possessions like furniture, clothes, appliances etc. It covers against hazards like fire, storm, flood, earthquake, etc.

Insurable Risk: It is the risk type against which getting insurance is not difficult. For example definable, accidental in nature, and part of a group of similar risks large enough to make losses predictable.

Insurance: Risks of may individuals and business organizations are pooled and transferred to an insurance company in return of a premium thus making large financial losses affordable. This is insurance.

Insurance Pool: Sometimes insurance companies pool their assets in order to extend more insurance that they would be able to as individual firm.

Notice of Loss: In case of accident or other loss the insurance company must be immediately informed in written. It is a part of policyholder’s responsibilities after the loss.

Policy: It is a written agreement between the insurance company and the policyholder stating the details of coverage.

Premium: This amount is charged annually or semi-annually from the policyholder as a fee or fixed charges by the insurance company.

Variable Life Insurance: This life insurance policy doubles up as a savings account that can be used as investment base for stocks, bonds and mutual funds and coverage against premature death of the policyholder.

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