Insurance Definition And Some Term That Policyholder Must Know

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Tipswalet.Insurance Definition And Some Term That PolicyHolder Must Know- Insurance, this word is very meaningful for those of you who understand the value of protecting yourself, your family, or the property that you own. Those who understand the benefits of long-term investment or more precisely financial protection will consider this insurance highly.

However, it would be better if you know more details about insurance. You should at least know what insurance is, what is an insurance policy, and what is the purpose of insurance.

You also have to know a little about the terms that exist in the world of insurance. This is so that you can understand correctly, what you need, and how the cooperation procedure in insurance. For more details, let’s look together with the following review:

Define Insure

What is the define insure? These are words that arise from those who are new to insurance. Most of them are confused and have questions, What is the actual definition of insurance? Define insure is an agreement with which an insurer ties himself to an insured, by receiving a premium, for reimbursement to him because of damage or loss of expected benefits that he might suffer because of an uncertain event.

Another definition of insurance is a risk transfer from the first party to another party. In delegation is controlled by legal rules and the enactment of universally accepted principles and teachings by the first party and other parties.
In terms of economics, insurance means a collection of funds that can be used to cover or compensate people who suffer losses.

Insurance Definition in Global Meaning

Insurance is a contract agreed upon by two parties and begins with a policy, where an individual or object receives financial protection or compensation for losses from an insurance company. The company will pay compensation in accordance with the value agreed to be insured by the insurance company to the recipient of the insurance

The insurance policy itself is actually intended to hedge against the risk of financial loss. This protection covers both large and small things, which can be caused by damage to the insured or his property, or from liability for damage or injury caused by third parties or accidents that occur.

Insurance that is growing rapidly at this time can not be separated from the benefits that are needed by the community. As with any successful and growing business, insurance currently has several types. This type of insurance increases from what was previously only focused on life insurance and property insurance. This is based on the community’s need for protection of certain things, such as vehicles, accidents, education, even protection when traveling.

Type of Insurance

Insurance that is growing rapidly at this time can not be separated from the benefits that are needed by the community. As with any successful and growing business, insurance currently has several types. This type of insurance increases from what was previously only focused on life insurance and property insurance. This is based on the community’s need for protection of certain things, such as vehicles, accidents, education, even protection when traveling.

Until now, there are at least 10 types of insurance that are active with the countless number of policy recipients. The 10 types of insurance currently available are:

  1. Life Insurance
  2. Health insurance
  3. Vehicle insurance
  4. Home and Property ownership insurance
  5. Educational Insurance
  6. Business Insurance
  7. General Insurance
  8. Credit Insurance
  9. Marine Insurance
  10. Travel Insurance

Life insurance to date has become a leader with the highest number of policies favored by the public. The second number is occupied by health insurance which is indeed considered a vital need. Next followed by vehicle insurance, property insurance, then travel insurance. We obtain this data from conducting research on several well-known insurance companies. The data that becomes the benchmark is how much interest is compared to the value of insurance entrusted to the company.

List of Terms in Insurance You Must Know

The world of insurance has become very complex, especially lately, considering the types of insurance offered by companies are increasingly diverse. This is because insurance is a legal business that deals with financial conditions and affects the economy of the person or object that is borne. However, there is very little awareness of recipients of insurance to know about this. This is what can then lead to long tails and problems and then run to the courts and lawyers.

In order not to be a problem later on, then you must know about the terms contained in insurance. In order to avoid misunderstanding and troubles you later, please refer to the list of terms contained in the insurance below:

Insurance Agent: Employees of insurance companies whose job is to market products or serve prospective customers ranging from submitting policy provisions to the contents of policy agreements after becoming policyholders. Read Also: 7 Key How To Choose The Best Insurance Agents

Actuary: Knowledge in insurance that applies mathematical, financial and statistical methods to estimate or calculate risks.

Adjudication: The stage of dispute resolution to make a decision whether the claim submitted by the policyholder must be accepted or rejected by the insurance company.

Annuity: Payments made by insurance companies periodically for a certain period of time.

Assignment: The term used to refer to transfers in insurance.

Assignor: Parties who carry out assignment rights and insurance benefits from policyholders to others.

Automatic Premium Loan (APL): Provisions for automatic withdrawal of cash value from a policy if the customer has not paid the premium until the grace period ends.

Bancassurance: Insurance products offered and sold through banks and targeted customers are bank customers.

Cut limits: Costs that must be incurred by the policyholder to cover the lack of costs paid by the insurance company to the hospital.

Acquisition Costs: Costs incurred when issuing policies.

Cash Value: Total money given by insurance companies to policyholders (cash value).

Contestable Period: Time given to the insurer to cancel the policy.

Leave Premium: Features in insurance that customers may use if they want to stop paying premiums for a while.

Fund Investment: The amount of funds obtained from the payment of premiums has been deducted by acquisition costs and several other costs.

Endowment Plan: An insurance program with two benefits: protection and savings.

Explanation of Benefits (EOB): A letter from an insurance company as a sign of receipt of claims given to policyholders.

Field Underwriting: Initial selection by an insurance company.

Flat Rate: Cost of premiums every month determined by insurance companies whose nominal is the same for each pay period during the contract period.

Free-Look Period: Policyholders get 14 days to terminate cooperation/cancel policy because they do not agree to the terms and conditions in the policy.

Grace Period: The term used to specify the grace period given to policyholders for 30 days from the due date of payment.

Unit Price: The results obtained from the portfolio investment obtained from the results of asset value plus the profits derived from investment returns.

Illustration Policy: Projections of insurance benefits received by policyholders.

Investment-linked plan: A term that refers to unit link insurance that offers protection and investment benefits.

Guarantee of Protection: One of the guarantees provided by insurance companies so that policyholders can purchase additional insurance products without the need for a selection process.

Guarantee / Guarantee Statement: A statement issued by the prospective customer regarding the condition of the person or object insured.

Joint life annuity: Payments made will stop if the insured dies.

Key Employee (Key Person): Experts owned by insurance companies with all the capabilities that support the success of insurance companies.

Claim: Claims given by the insurance policy holder to get the right properly so that the insurance company pays the conditions according to the existing procedure.

Final Contract Claims: The claim of the rights of the policyholder because the contract has ended with the insurance company.

Claims Delayed: Claims made by policyholders and cannot be paid by insurance companies for certain reasons.

Clause: Articles contained in policy agreements that must be complied with by policyholders and insurance companies.

Lapse: Premiums that are not paid beyond the grace period can cancel the policy (the effective period of the policy stops).

Life Insurance Company: An insurance company that has insurance products to receive risk delegation regarding life (economic value and insured). Read Also: Top 5 of the Most Popular insurance companies With Best Services To Customers

Loan of Policy: If the policyholder requests a loan to an insurance company in a certain amount and is approved with a guarantee of the cash value of the policy.

Late Remittance Offer: Final offer from an insurance company that is used to recover a canceled customer policy.

Law of the Large Numbers: Calculation through statistical data through the concept of a large number of law that can describe how much percentage of all possibilities that might occur to policyholders.

Main Reserve: Premium reserves held by policyholders will be calculated in the middle of the year.

Mail Kit: A sales brochure that is used to send various information related to insurance programs sent by post to prospective customers to make it easier to make a decision to join the insurance program.

Grace Period: The deadline given by the insurance company to the policyholder to pay the agreed premium.

Waiting Period: There is no premium payment due to certain reasons.

Minor: Policyholders who are under 21 years old.

Mortality: When estimates of death are uncertain or can also be used to refer to the frequency of death.

Net Asset Value (NAV): The basic value of investment in the Unit Link policy.

Investment Value: The total value of units formed in a period.

Occupational Risk / Hazard: Risk from the work of policyholders.

Payor: The term used for policyholders as parties who pay premiums.

Policyholder: A person who is bound by an agreement made with an insurance company and is responsible for all obligations to the insurance company.

Policy: An agreement made by the policyholder with an insurance company.

Insurance Policy: Agreement between policyholders and insurance companies to carry out obligations as agreed by both parties.

Premiums: Nominal payments approved by policyholders and insurance companies. Premium payments will be carried out in accordance with the agreement, can be monthly, annual or according to an agreement.

Quarterly Premium: Premium payments are made every three months.

Reinsurance: An attempt by an insurance company to protect itself by bestowing insurance risks to other insurance companies.

Risk: A variety of bad possibilities that can happen to someone.

Secondary Benefits: Other benefits obtained outside of the basic benefits.

Sum Insured: Amount of money that must be paid by the insurance company in the event of a claim from the policyholder for the risks guaranteed in the insurance program.

Underwriter: A person who has expertise in assessing or reviewing the various risks of a policyholder so that the prospective customer has the right to receive insurance or not.

Must know the insurance definition and the term in the insurance

Well, that was the definition of insurance, both in words and interpreted globally. Besides Define Insure above, there are also several terms in insurance. These terms are usually found in insurance policies or related terms in the insurance industry itself. Policyholders should take the time to read or learn the various terms above so that there is no misunderstanding later.

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