LIFE INSURANCE TERMS AND MEANING
- ACCIDENT BENEFIT: Provides for payment of
an additional benefit equal to the sum assured in
installments on permanent total disability and waiver
of subsequently premiums payable under the policy.
- A.S.A.: Actual Sum Assured.
- AGE LIMITS: Stipulated maximum and minimum
ages below and above which the Corporation will not
accept applications or may not renew policies.
- AGENT: An LIC insurance company representative
licensed by the state that solicits, negotiates or
effects contract of insurance, and provides service
to the policyholder for the Life insurance.
- ANNUITY: It is a scheme which is under certain
amount is paid yearly / half-yearly / quarterly /
- ANNUITANT: Annuitant is the person who receives
certain amount at yearly / half-yearly / quarterly
/ monthly interval.
- ASSIGNMENT: A transfer of the right and benefits
of the insurance policy from one person to another.
Assignment means legal transference. A method by which
policyholder can appoint a person on his interest
to another person. An assignment can be made by an
endorsement on the policy document or as a separate
deed. Assignment can be of two types (a) Conditional
- BENEFICIARY: The person who receive the benefit
of a policy in case of death during the term of policyholder
who receive the benefit on maturity.
- BONUS: Bonus is the amount added to the basic
sum assured under a with-profit life insurance policy.
- B.M.CLUB: Branch Manager's Club.
- BUSINESS INSURANCE: A policy, which primarily
provides coverage benefits to a business as, contrasted
as an individual. It is assured to indemnify a business
for the loss of services of a key employee or a partner
who becomes disabled.
- CLAIM: A request for payment of contractual
benefits by the insurer that is made by the insured
or the beneficiary.
- C. M. Club: Chairman's Club
- C.I.R: The rider covers major illnesses by
paying extra premium.
- DATING BACK: Dating Back or Back Dating is
an option to the life assured to get the advantage
of lower age wherein the policy is commenced from
a date earlier than the date of singing of proposal
form. However back dating is limited to one year.
- D.O.C.: Date Of Commencement.
- DAYS OF GRACE: Policyholder are expected
to pay premium on due dates. A period of 15-30 days
is allowed as grace to make payment of premium; such
period is days of grace.
- DEATH BENEFITS: The benefits received by
the beneficiary (ies) on the death of assured.
- D.G.H.: Declaration of Good Health.
- DEFERRED ANNUITY: An annuity plan where the
first annuity payment become payable after a chosen
period that exceeds one year.
- DEFERMENT DATE: It is a date on which the
deferment period ends.
- DEFERMNENT PERIOD (D.P.): Deferment period
is the period from the date of commencement of policy
to the date of commencement of risk.
- D.O.: Development Officer.
- D. M. CLUB: Divisional Managers Club.
- D.A.B.: Double Accident Benefit.
- ENDOWMENT PLAN: A plan in which the amount
is paid to the policyholder if the outlives the tenure
of the contract or to the beneficiary if the insured
person dies before the date on which the policy matures.
- F. A. B.: Final Additional Bonus.
- F. M. R.: Full Medical Report.
- GUARANTEED ADDITION (G. A.): Guaranteed addition
is calculated at the rate per every thousands of sum
assured. They are added to the basic sum assured and
are payable on admittance of claim. The benefit is
allowed only for each year for which premium are paid.
- IRDA: The acronym for the Insurance Regulatory
and Development Authority of India. It is apex body
overseeing the insurance business in India. It protects
the interest of the policyholder, regulates, promotes
and ensures orderly growth of the insurance industry
and for matters connected therewith or incidental
- LAPSE: The termination of insurance policy
due to non-payment of premium.
- LAST BIRTH DAY (L. B. D.): Age on last Birthday.
- LIFE ASSURED (L. A.): Life Assured refers
to the person whose life is being insured.
- LIFE INSURANCE: A contract provided for the
payment of a sum of money to the person assured or
failing him, to the person entitled to receive the
same, on the happening of certain event for the consideration.
Here, sum of the money refers to sum assured/benefits;
certain event refers to contingent event; consideration
refers to the premium.
- LOYALTY ADDITION: Under certain life insurance
policies loyalty additions are giver as an additional
benefit to the policyholder. The rate of addition
depends on the LIC's performance and is allowed only
if the is in full force.
- M. D. R. T.: Million Dollar Round Table.
It is the premium association of Financial Professionals.
- MONEY Back PLAN: A plan in which part of
the sum assured is paid back to the policyholder at
- MORAL HAZARD: Moral Hazard is said to exist
in the case where we notice the absence of a genuine
need for the life insurance or when the proposal for
insurance is submitted by an individual beyond his
- NEAR BIRTHDAY: Age on nearest Birthday.
- NOMINEE: Nominee is a person who is nominated
to receive the amount under a policy and to give a
valid discharge to the insurer on the settlement of
the claim under a life insurance policy.
- NOMINATION: A provision by which a policyholder
can designate any person to receive the policy money
in the event of his death.
- NON-STANDARD LIFE: Any individual, who cannot
be granted a policy under normal rates of premium
but can be granted with an extra premium over normal
rates of premium, is considered as Non-Standard Life.
- N. S. A. P.: Non Standard Age Proof.
- NOTIONAL CASH OPTION (N. C. O.): On this
amount Annuity/Pension is calculated and is given
to the policyholder.
- PAID-UP VALUE: Paid-up value is the reduced
amount of sum assured paid by the insurer in case
of discontinuation of the payment of premiums after
paying the full premium for the first three years.
- P. F. O.: Personal Financial Questionnaire.
- PDB: Permanent Disability Benefits.
- POLICYHOLDER: The person who owns the life
- PREMIUM: Premium is the amount paid to secure
an insurance policy.
- PROPOSAL FORM: It is a form which is to be
completed for securing an insurance policy.
- PREMIUM WAIVER BENEFITS: (PWB): Premium waiver
benefits are the benefits which can be waived in the
event of death of the proposer.
- RIDER: Add-on benefits available at the option
of the policyholder that may alter certain features
of the policy by increasing or restricting benefits
- SUM ASSURED (S. A.): Sum Assured is the amount
that an insurer agrees to pay on the occurrence of
- S. U. C.: Sum Under Consideration.
- SURRENDER VALUES: Surrender Values is the
amount payable to the policyholder on surrendering
his right under a policy and terminating the contract
- TERM: Term is the period for which insurance
coverage is given.
- T. R.: On death of Life Assured during the
term cover under TR, an amount equal to Term Assurance
Sum Assured is payable.
- UNDERWRITING: Underwriting of a risk involves
consideration of material facts on the basis of which
a decision will be taken whether to accept the risk
and if so at what rate of premium.
- VESTING AGE (V. A.): The age at which the
receipt of pension starts in an insurance-cum-pension
- WHOLE LIFE INSURANCE: A life insurance policy
where benefits are payable to the beneficiary on the
death of insured, whenever that occurs. The premium
payment can happen for a specified number of years
or throughout life.
- Z. M. CLUB: Zonal Manager's Club.
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