FAQs 152 views June 10, 2021

Important Insurance Terminologies

List of Important Insurance Terminologies that Every Policyholder Must Know

Like any other industry, insurance also comes with its set of terminologies. And if you are not aware of them, you might choose the wrong insurance policy for yourself! That’s where Wishpolicy, a neutral insurance marketplace with rich market expertise, can let you know important Insurance Terminologies so that you could choose the RIGHT insurance policy. So what are you waiting for? Let’s read all such terminologies below.

Premium

It is an amount that you will pay to the insurer and get cover for your life, health, property, vehicle, etc. Let’s see how the insurer decides about the premium amount across each of the insurance products.

Health insurance Premium – An insured person’s health insurance premium is based on Age, Gender, Medical Records, Income, and the number of covered persons.

Life Insurance Premium – For deciding a Life Insurance premium, your age, gender, medical records, type of employment, insurance tenure, and lifestyle will be taken into account.

Motor Insurance Premium – Your vehicle Insured Declared Value (IDV), vehicle type, and age of the vehicle will help decide your premium.

Note – You can pay the insurance premium monthly, quarterly or annually, except for motor insurance where only a yearly mode of payment is available.

Product Comparison

If you are thinking about insurance, you should know how to make a product comparison? Doing this efficiently will help you grab the best insurance deal. Let’s read below how you should go about comparing different insurance products.

Life Insurance  – Life Insurance policies come in several variants such as Term, Endowment, Money Back and Traditional plans. For Term Life Insurance, customers can compare the product based on the Sum Assured they will receive, the Premium Amount, Coverage, Company’s Claim Settlement, and the defined exclusions. Whereas in an Endowment, Money Back, and Traditional plan, the same would be considered along with the payout at maturity.

Health Insurance – You can choose a suitable health insurance for yourself and your family if you compare policies based on aspects – entry age, room rent capping, pre-hospitalization, pots-hospitalization, Daycare cover, Dental cover, Mental illness cover, Maternity cover, waiting period of pre-existing conditions and even the exclusions.

Motor Insurance  – A motor insurance gives you the cover to your vehicle due to accidents or any unforeseen circumstances. But have you done any comparison of motor insurance policies? If not, consider the following while doing the comparison: Age of the Vehicle, Fuel Type, Insured Declared Value (IDV), coverage, and the applicable deductible.

Claim Settlement Ratio

The number of claims settled out of the claims received by an insurance company in a financial year is called a claim settlement ratio. The ratio comes in a certain percentage. For example, if an insurance company has settled 5,500 out of 6,000 claims, its claim settlement ratio will be 91.67% (approx.). The higher the ratio the more confidence you will have when buying the policy of the particular company.

Trust

A customer trusts an insurance company which is old, renowned, has a consistently high claim settlement ratio, and provides an extended coverage. Customers usually refer to a claim settlement ratio to find whether the insurer is trustworthy or not.

Policy Conditions

In insurance, there are certain terms and conditions that you need to follow. And this may vary depending on your insurer. Because policy conditions can affect your claims, premium payment, tax deductions, etc. So do read the conditions before agreeing to buy the policy.

Future Security

Life Insurance can secure your family’s future in a situation when you are not around. The Plan will provide Death benefits to the nominee in case you die during the policy term. Some plans also offer savings over the long-term that can help fulfill your various financial goals such as child education, marriage, retirement planning, etc. A Health Insurance Policy provides protection from any health emergencies in the near future, and safeguard your finances.

Flexibility

Insurance Policies also provide you the flexibility of choosing the premium amount, premium payment mode (Annual, Half-yearly, Quarterly, and Monthly), policy term, premium payment term according to your convenience and future goals.

Cover Amount

The Cover amount is the maximum amount that an insurance company will pay when you claim your insurance policy. Also known as Sum Assured or Sum Insured, it is the maximum amount that an insurance company will cover.

Policy Term

The overall duration for which an insurance company offers insurance to individuals is known as the Policy Term. A policy term can vary according to the insurance policy you are choosing.

Tax Benefits

You can enjoy tax benefits for the premium payable for a Life Insurance Plan under Section 80C of the Income Tax Act, 1961, for a maximum of INR 1,50,000 in a year.

Tax benefits are also available on the maturity amount on your policy under 10(10D).

In the case of a Health Insurance plan, individuals can get tax benefits up to INR 1,00,000 in a year under Section 80D.

On paying the lump sum premium payment towards your health insurance plan, you will also get tax benefits under Section 80D, up to INR 50,000 per year

ARO/Response of Enquiry/Customer Treatment

Once you show interest in joining us, our Assistant Relationship Officers (AROs) will call you and analyze your age, employment type, income to find a custom fit insurance solution for you. They will give you the best quotes based on the details you share with us. Besides, AROs will let you know the function of premiums, the sum insured, the list of coverages and benefits, etc. We also tell you precisely the documents you need to submit for quick processing. The ARO support will remain undeterred till the time you get the right policy. But we won’t stop there! We will keep monitoring your profile and see whether you should have some more insurance solutions to prosper ahead.

Payment Related Difficulties

Failing to pay premiums regularly can make you lose privileges like guaranteed maturity benefits, loans at lower interest rates, etc. Now, anyone can face payment issues due to technical glitches. In case you face the same, don’t hesitate to chat with us on 7290036765. We will be happy to help you! Our executives will suggest simple steps that you can do from your place and pay your premium successfully. The word ‘Payment’ in insurance is broad in scope by including even the amount you receive upon claiming. Understanding the hard work you do by paying insurance premiums, we run a free Claim Assistance Service for you! Just give us a call and get your claim settled in a hassle-free manner.

Delay in Policy Issuance

The delay in policy issuance can annoy you! Understanding the same, Wishpolicy experts guide you smoothly so that you can get the policy documents quickly, both on your hand and email. A quick issuance means a quick beginning of the policy coverage.

Loan Facility

You could even get a loan against traditional life insurance policies that must have a specific surrender value. Usually, a spotless payment for 2-3 years can help your insurance policy acquire a surrender value. You could get a loan of upto 80%-90% of the surrender value.

Money Back

Most insurance policies come with a lump sum payment at the end of the policy term. But there are some money back plans which offer you regular payments after a few years from the policy inception. These are called survival benefits. And as the same suggests, the benefit remains till the time the insured is alive. In case the policyholder dies during the policy term, this benefit will cease to exist.

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