Insurance Terms

Transferring or protecting risk, usually with a payment

Risk Management
Managing risks

Company that provides insurance

What the insurance covers or protect

Insurance Agent
A person who provides insurance advice and solutions

Policy Holder
Owner of the insurance

Transfer of policy rights

Person entitled to receive insurance benefits

Insurance Coverage
The amount or value of risks to be covered

The amount paid for the insurance

Insurance Policy
An insurance contract

Request for payments as per terms of insurance policy

Lump Sum
One-time payment

Single Premium
One-time payment

Regular Premium
Regular Payment

Cash Value
Value of insurance policy upon immediate termination

Transferring risk of company that provides insurance

Company that provides reinsurance

Sharing risks or payments

Sharing future profits and decreased in profits for the savings insurance policy

Values of savings insurance policy is pre-determined and is not subject to profit of loss.

assessing and deciding process for risks of an insurance policy

Actuarial Science
Using mathematical and statistical methods to assess risk in insurance, finance and other industries and professions

Life Insurance
Cover the life of a person against death.

TPD Insurance
Stands for Total Permanent Disability. Cover risks of person who becomes permanently disabled.
Usually defined as: Loss of 2 eyes, 2 arms or 2 legs.

Critical illness Insurance
Covers risks of getting stated critical illness

An insurance and savings plan that pays a lump-sum upon maturity or upon death

An insurance and savings plan with no maturity, and is payable upon withdrawal, termination or death.

Universal Life
An insurance and savings plan with regularly adjusted interested rate. No maturity, flexibility of withdrawal, and can be terminated or upon death

Investment-linked Policy
An insurance policy with returns linked to investments

An insurance and savings plan with regular payout that may terminate upon reaching zero value or death

Health Insurance
Cover medical, hospital and surgical expenses

Disability Insurance
Cover risks of not being able to work due to disability

Term Insurance
Life insurance coverage with a specified period

Keyman Insurance
Cover stated risks of important person
Example: Bruce Springsteen voice was Lloyd’s for $6 million

Accident Insurance
Cover risks of accidents

Additional insurance coverage added to a policy

General Insurance
Non-life insurance

Travel Insurance
Cover risks of travel

Car Insurance
Cover risks of car accidents

Fire Insurance
Protect risks of fire

Act of God
Events that happen outside human control such as natural disaster

What will be excluded

Benefit insurance
What must be paid regardless

Insurable interest
Insured must directly suffer from the loss.

Utmost good faith / Uberrima fides
Insured and insurer are bound by a good faith bond of honesty and fairness. Material facts must be disclosed.

Insurer has legal rights to recover damages to those who are liable for the insured, on behalf of the insured.

Causa proxima / proximate cause
Cause of loss must be covered and the dominant cause must not be excluded

Did you know

Maritime Insurance is the earliest known insurance contract in 1347 Genoa, Italy