• Toll Free
  • 1800 - 120 - 1819
Let us call you!!

Glossary Insurance

  • Absolute Liability

    Liability for damage/loss even though negligence or fault can't be proved.

  • Accident

    An unforeseen incident or occurrence that causes bodily injury or damage to your vehicle

  • Accident Policy (Personal Accident Policy)

    Policy that covers expenses incurred in treating injury caused by accident.

  • Accidental Death Benefit

    Pre-specified benefits offered to the nominee by the insurance company when the person insured dies in accident.

  • Actuary

    A person who calculates insurance premiums, dividends along with analyzing risk.

  • Agent

    An insurance professional that sells insurance products, provide services to customers on behalf of an insurer

  • Annuitant

    The person who receives the annuity benefits

  • Annuity

    Periodic benefits that an annuitant receives during the survival or for the period specified

  • Arbitration

    An alternative way to settle insurance disputes rather than a court

  • Assets

    All properties of an insurance company that might be used to pay its debt.

  • Assignee

    A person or entity to which insurance policy is legally transferred

  • Assignment

    When the policyholder legally transfer the benefits and rights of a policy to third person or entity; normally, as collateral towards a loan.


  • Bancassurance

    Distributing insurance products through banks.

  • Beneficiary

    The person nominated by the policy holder who receives benefits under the policy if the policyholder dies.

  • Benefits

    An amount or facility that the insurance company offers to nominee/beneficiary under an insurance policy.

  • Bonus

    An amount equal to a certain percentage of sum assured paid to the policyholder every year towards policy benefits

  • Broker

    A person or organization that acts as an intermediary between an insurance company and customers. The broker receives commissions from the insurer for selling policies and providing services

  • Business Insurance Policy

    A policy designed to indemnify a business entity against loss of income due to loss of services of employees or partner who becomes disabled

  • Cashless Settlement

    A claim settlement system wherein a policyholder doesn’t require making any payment to avail policy benefits

  • Casualty

    Bodily injury, death or any loss caused by an accident.

  • Ceded Premium

    Amount of premium paid by the insurance company (ceded company) for reinsurance.

  • Claim

    A written demand made by a policyholder or nominee to the insurance company to compensate loss as per the policy.

  • Co-payment

    An additional fee that a policyholder pays for health-care services, usually when the service is rendered.

  • Comprehensive Cover

    Comprehensive Motor Insurance Cover policy is policy that provides coverage both damage/loss to your vehicle and damage/loss to third-party caused by your vehicle. Also, it covers damage caused by fire, riots, natural disaster, lightening or by any malicious act.

  • Contingent Beneficiary

    Also known as ‘Secondary Beneficiary’, is the person named by the policyholder to receive death benefits in case the first/original nominee dies

  • Convertible Term Policy

    A Term Insurance Policy that allows policyholder to convert policy to an investment-based insurance policy without a health check-up.

  • Cover

    It refers to the benefits offered under an insurance policy

  • Cover Note

    A temporary document supplied by the insurer in general insurance as a proof of insurance buying. It provides coverage until the issue of formal policy.

  • Coverage

    The scope or degree of benefits offered in an insurance policy

  • Coverage Area

    It refers to a geographical area covered by a travel insurance policy.

  • Critical Illness Rider

    It’s a rider in insurance policy that provides financial protection to the policyholder if he/she diagnosed with any of the listed critical illness in the policy.

  • Cubic Centimeter (CC)

    Normally called as CC or Litre, refers to the volumetric capacity of an engine. This is one of the parameters on which premium of vehicle is determined.

  • Cumulative Bonus

    It’s the total bonus accrued over the period in insurance policies such as – health insurance, personal accident etc

  • Death Benefit

    Death benefit is the lump-sum amount the insurance company pays to the nominee/beneficiary under a life insurance policy if the policyholder dies within the policy period.

  • Deductible

    In non-life insurance,'Deductible’ or 'Excess’ is a portion of the insured loss need to be borne by the policyholder. The insurer pays the remainder only.

  • Deferred Annuity

    An annuity plan wherein the annuitant does not begin to receive payment after a chosen period that exceeds one year

  • Depreciation

    It’s a decrease in value of insured property over a period of time due to wear and tear or obsolescence. Insurer determines the current value of the property on the basis of depreciation

  • Disability

    Disability is a physical state of insured person where he/she becomes unable to perform his/her occupational duties due to an accident or illness

  • Endorsement

    A written amendment in an insurance policy such as-insuring agreements, exclusions or declaration.

  • Endowment

    An insurance plan that fulfills policyholder’s both risk coverage and investment appetite.

  • Escalation

    A provision for automatic increment on some defined basis in premiums and sum assured.

  • Ex-gratia

    A voluntary payment when there was no legal obligation or liability to pay it.

  • Excess

    In non-life insurance, 'Deductible' or 'Excess' is a portion of the insured loss need to be borne by the policyholder. The insurer pays the remainder only.

  • Exclusions

    These are illness, conditions or circumstances not covered by the insurance policy. The insurer does not accept claims for losses arising out of such conditions.

  • Expected Loss Ratio

    It the ratio of losses incurred to premiums earned and premium anticipated when rates are first for-mutated.

  • Exposer

    Possibility of losses

  • Extended Coverage

    It is the additional coverage for risk other than those in the basic policy

  • Face Amount

    In a life insurance policy, Face Amount is the amount payable to the nominee/beneficiary upon the death of the person insured

  • Free-look Period

    A period of time during which the policyholder can return the policy if he/she disagrees to any of the terms & conditions mentioned in the policy.

  • Grace Period

    A period of time provided as a grace for making payment of premium after actual due date. During this period policy does not get expired

  • Group Insurance

    A term insurance policy purchased by an employer to protect lives of their employees

  • Guaranteed Additions

    In an assured-return policy, it is the certain percentage of sum assured paid as return, with the amount payable being stated by the insurer

  • Guaranteed Insurability Option Rider

    This option allows the policyholders to enlarge the purview of their cover at different stages of their lives without disclosing any further medical or occupation details.

  • Guaranteed Renewable

    A provision which guarantees the policyholders the right to renew coverage every year

  • Hazard

    A condition responsible for loss

  • Hospital Cash Benefit Rider

    A rider in health insurance policy that offers cash benefit for days spent in the hospital

  • House Breaking

    Forcibly entering of a thief into the house or premises

  • Householders Policy

    A policy that provides homeowners coverage of property and liability

  • Hull Insurance

    An insurance policy for a vessel and its machinery

  • Immediate Annuity

    An annuity that starts immediately after the first premium is paid

  • Indemnity

    A legal principle of compensation which says that the nominee/beneficiary should receive more money than the actual loss but should stand in the same financial shape as existed before the damage/loss.

  • Inherent Vice

    A self-destruction characteristic of goods such as – vegetables and fruits. Normally, insurance companies don’t provide cover such risks

  • Insurability

    The characteristic or conditions on which the insurer decides whether the subject can be insured or not

  • Insurable Interest

    Person applying for an insurance cover for any subject/person should have any financial or emotional interest in it. According to the insurance law, you cannot buy insurance cover for subjects in which you don’t have any insurable interest

  • Insurance

    A contract between the policyholder and the insurance company wherein the latter assures to compensate financial/emotional losses to former in return of premium paid

  • Insured

    The person or property that has been covered by any insurance policy

  • Insured Declared Value (IDV)

    It is the depreciated value of a vehicle declared by the insurance company for insurance based on the vehicle’s make, model, variant and its accessories.

  • Insurer

    Company involves in insurance business

  • IRDA (Insurance Regulatory and Development Authority of India)

    It’s the insurance regulator in India responsible for providing licenses to insurance business entities, regulating insurance sector and oversees policy matters

  • Joint Life Insurance Policy

    A life insurance policy that is taken out on two lives. On the death of either of the insured, the death benefit is paid to the surviving insured, and the policy terminates. However, the surviving insured has an option to buy a fresh policy

  • Key man Insurance Policy

    A life insurance policy taken by an employer on the life of his employee or on any person connected to his business in any manner whatsoever

  • Lapse

    Termination of an insurance policy because of non-payment of premium

  • Liability

    A legal obligation that binds an individual or business entity to settle the debt or loss.

  • Liability Insurance Cover

    An insurance policy that covers legal liability of the policyholder resulting from injuries to other persons or loss/damage to their property.

  • Life Annuity

    An annuity that makes payment throughout the life of the policyholder

  • Life Assured

    Person whose life is covered by any life insurance policy

  • Limited Payment Life Policy

    A life insurance policy wherein the policyholder pays premium for a pre-specified period and enjoys coverage for lifetime

  • Loading

    An amount over and above the premium charged to cover normal risk.

  • Loyalty Additions

    An additional benefit other than guaranteed additions /bonus paid to the policyholder on maturity of an investment-based insurance plans for keeping the policy alive.

  • Market Value

    The current market value of an object or property if sold

  • Material Fact

    The fact about the insured life/property or conditions of incidents, disclosure of which might change the decision of the insurer either with respect to settling claims, writing cover or determining the premium

  • Maturity Date

    The date on which the face value of an endowment policy is paid to the policyholder if the life insured is still alive.

  • Money-back Policy

    An endowment policy that pays survival benefits to the policyholder throughout the chosen policy term either annual, half-yearly or monthly rather than paying a lump sum at the end of the policy.

  • Morbidity

    The probability of disability of a person or a group of person; either physical or psychological, resulting from illness, injury or sickness.

  • Mortality

    The probability of death of a person or a group of person

  • Net Asset Value (NAV)

    It represents the per unit market value of a fund. It’s the price at which the investor buys a fund share from a fund company. The NAV is calculated once at the end of each trading day

  • No-claim Bonus

    A discount in renewal premium in general insurance portfolios such as – health, motor for not making claim in the preceding year

  • Nominee

    The person or persons nominated by the policyholder to receive the benefits under the policy if he/she dies during the policy term

  • Non-participative Policy

    An insurance policy which does not pay any share of insurance company’s profits to the policyholder. It’s also known as ‘Without Profit Policy’.

  • Outpatient Services

    Services provided to patients in clinics, hospitals OPD or at home that do not require stays

  • Over Insurance

    When any property is covered for above its actual value

  • Owner

    The person or entity that has the control of rights and benefits of an insurance policy

  • Package Policy

    When two or more than two distinct policies are combined into a single

  • Paid-up Value

    It is the reduced amount of sum assured payable to the nominee if the policyholder stops paying premiums after paying the premiums for first three years

  • Par Value

    It refers to the nominal or face value of a stock or bond

  • Participating Policy

    Also known as ‘With Profit Policy’, refers to the policy that pays share of the insurer’s profit. The premium for this policy is charged higher than a non-participating policy

  • Peril

    The factor that causes personal injury, loss or damage of property

  • Personal property

    All tangible assets, except land, that is either temporary or movable, such as-electronic items, furniture, jewelry etc.

  • Point-of-service (POS)

    A place or office having contract with an insurance company where policyholders get policy related services

  • Policy

    It’s the contract between a policyholder and an insurance company

  • Policy Loan

    An advance received by a policyholder from a life insurance company against the policy. The insurance company keeps policy document as a mortgage

  • Policy Period

    It refers to the period for which an insurance policy provides coverage

  • Policy Term

    It refers to the period for which an insurance policy provides coverage

  • Policy-owner

    The owner of the policy. Also called the ‘insured’

  • Policyholder

    The owner of the policy. Also called the ‘insured’

  • Pre-existing Condition

    An illness or sickness prior to the beginning of a health insurance policy

  • Premium

    The amount paid by the policyholder to the insurer either monthly, quarterly, half-yearly, yearly or one time to buy cover

  • Primary Beneficiary

    The first person or entity nominated by the policyholder entitled to receive benefits under the policy after the demise of the life insured. Also called as ‘first nominee’.

  • Re-entry Option

    An option in a renewal term plan under which the policyholder is guaranteed to get his/her policy renewed at the end of the term without having producing evidence of insurability at a premium rate specified in the policy.

  • Re-insurance

    A contract between a primary insurance company and another insurer called re-insurer where the latter agrees to cover all or part of the possible losses and/or loss adjustment expenses of the former insurer

  • Re-insurer

    An insurance company that bears all or part of the possible losses of the primary insurer

  • Reinstatement of Policy

    Also called ‘revival’, is a process that brings a life insurance policy back in force after it lapsed because of no-payment of premiums

  • Renewal

    Act of paying premiums in order to keep existing policies in-force

  • Reversionary Bonus

    An amount equal to a certain percentage of sum assured paid to the policyholder every year towards policy benefits

  • Riders

    An optional cover that can be purchased with a life or health insurance policy on paying extra cost.

  • Risk

    Possibility of losing values such as- property, good health or social status

  • Secondary Beneficiary

    Also referred to as the ‘Second Nominee’.  This is the person or entity nominated by the policyholder entitled to receive benefits under the policy after the demise of the original nominee.

  • Single-premium Policy

    A life insurance policy that allows customer to buy for a one-time lump sum payment, and provides coverage for the specified term or for life time

  • Subrogation

    An assignment of rights of recovery from the policyholder

  • Suicide clause

    A stipulation in life insurance policy wording that specifies that the insurer will not pay anything to the nominee/beneficiary if the life insured commits suicide within a specified period, normally the first year of issuance of the policy.

  • Sum Assured

    This the amount of cover taken under a life insurance policy that can be paid to the nominee on demise of the life insured within the policy period.

  • Surrender Value

    The amount payable to the policyholder in an investment-based policy if he/she opts to end the policy before its maturity date, subject to completion of 3-year lock-in period. It is the amount paid by the policyholder as premiums minus surrender charges and loans, if any

  • Survival Benefits

    The amount payable to the policyholder in an investment-based policy if he/she survives the policy period. It is the amount equal to the sum assured plus guaranteed additions/bonus accrued over the period

  • Temporary Total Disability

    A temporary physical condition caused from an accident that leads a person unable to perform his/her regular duty affecting earning capacity temporarily.

  • Term

    A period of time for which policy is in effect

  • Term Plan

    A type of life insurance policy that provides life protection for a specified period of time. If the life insured survives the period, the policy terminates without paying anything

  • Terminal Bonus

    An amount paid to the policyholder/nominee on maturity of a ‘Participating Policy’ or ‘With-profit Policy’

  • Third Party

    A person other than the insured or insurance company who has incurred losses/damage either monetary or physical injury due to acts or omission of the insured.

  • Third-party Administrator (TPA)

    An intermediary company tied-up with the insurance company that process cashless claims in health insurance or motor insurance policy

  • Total Loss

    The complete destruction of a house, building or any property that has nothing left of value

  • ttttttttttttttttttttrrrrrrrrrrrrrrrrrrrrrrrrrrrrrriiiiiiiiiiiiiiiiiiiiiiiiiiiiiippppppppppiiiiiiihgm


  • Underinsurance

    It is a state wherein the owner of the property takes cover for less than its actual value.

  • Underwriter

    It is a highly educated professional responsible for reviewing applications for insurance and decides if the applicants are insurable, and at what premium rate.

  • Variable annuity

    A type of annuity policy wherein the amount of each benefit payable to the policyholder is not guaranteed and specified in the policy. The benefits under such policy fluctuate according to the earnings of a separate account fund

  • Vesting Date

    It’s the date from which a policyholder starts receiving pension in a pension plan. Whereas in child plan, it’s the date from which a child takes ownership of the policy taken in his name 

  • Waiting Period

    In a health insurance policy, this is the initial period of time after inception of the policy for which the policy does not cover pre-existing illness, sickness or condition (except accident) specified in the policy document. Whereas, in life insurance policy, this is the period of time after the policyholder signed the policy till the inception of the policy after due verification. The insurer does not pay death benefits if the life insured dies during the period

  • Waiver of Premium Rider

    A clause in an insurance policy that waives policyholder’s obligation to pay future premiums for the base policy if he/she becomes seriously ill or disabled to pay premiums or dies. The policy continues in-force

  • Whole-life Insurance Policy

    The only life insurance policy that provides protection for lifetime.

  • With-profit Policy

    An investment-based life insurance policy wherein the policyholder receives a share of the insurer's profits along with the sum assured

  • Without-profit Policy

    An insurance policy that does not share any profits of the insurer with the policyholders

  • Written Premium

    It refers to the amount a policyholder needs to pay for insurance cover written during the accounting period. It is different from premiums earned by an insurance company by providing risks during the year.