Some of the language used by insurance providers may be unfamiliar to customers, even when they have maintained policies for a number of years. This guide will give precise definitions to help policy holders understand the terms of their insurance contacts.
* Insurance or Assurance. The first refers to an event that may or may not occur. The second term refers to one that will most definitely occur. The two terms are used interchangeably.
* The Guaranteed Sum Assured is also known as the amount covered, and refers to the lump sum paid out when the policy holder dies.
* The Beneficiary is the person who receives the lump sum.
* A Joint Policy exists where two people are insured. The death of one ends the policy with a lump sum being paid to the other.
* An insurance Policy is the contact between the holder and
the insurance company.
* A Premium is the monthly or sometimes yearly payment for insurance services.
* A Risk is the chance you will make a claim on any policy.
* A Claim occurs when the event insured against in the policy occurs. In the case of life insurance, this means the death of the policy holder.
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