Insured: The person buying the policy is referred to as the insured.

Insurer: The insurance provider selling an insurance policy to an individual.

Sum Assured: The total sum of money that is guaranteed to a person at the maturity of the life insurance plan is known as the sum assured. Bonuses are not included in the sum assured.

Death Benefit: The payout received by the beneficiary or the nominee upon the unforeseen demise of the policyholder is called the death benefit.

Accident Benefit: If the insured meets with an accident, their life insurance policy might have a clause covering all the expenses related to their accident such as hospitalization expenditure, medical expenses etc.

Rider: Often the insurance providers offer the adjoining features to their policies at an affordable fee. Such additional features enhancing the value of one’s life insurance policy and delivering additional benefits are referred to as riders.

Claim Settlement Ratio: The ratio of the total number of claims that the insurance provider has paid to the nominated beneficiary of the policyholders in proportion to the overall number of claims they get from consumers. The other claims are generally either denied for reasons like impersonation, misrepresentation, fraud, etc.

Free-look Period: If one is unsatisfied with their life insurance policy’s terms and conditions, and wants to cancel their policy, one can do so during the free-look period without paying any penalties or fees.

Bonus: The additional sum of money an individual receives during the term of the policy, or on the maturity of the life insurance policy, considering that s/he has paid all the premiums as required for a specific number of years, is referred to as the bonus.

Moral Hazard: When an insured is involved in situations or events that could boost the risk of an insurance provider to incur extra costs on behalf of that individual, s/he is known as moral hazard.

Lapsed Policy: If a policyholder fails to pay the premium on or prior to the due date, and doesn’t pay the premium after the grace period as well, the insurance provider ceases all the benefits provided by the insurance cover and abolishes it for the reason of non-payment. Such a policy is known as a lapsed policy.

Reinstatement: If the insured does not make payments for the due premiums for any reason, and the insurance provider, consequently, decides to dismiss the life insurance policy, the insured will have a choice to renew the life cover, and this process to make a lapsed policy active again is termed as reinstatement.

Convertible Life Insurance Policy:It permits the insured to convert his/her term life insurance policy to a permanent policy. Nevertheless, there will be a certain time limit for the consumer to make such conversions.

Renewable Life Insurance Policy: A best Life insurance policies having this clause enables the nominated beneficiaries to increase the term of the policy for a certain period of time.

Single Premium Life Insurance Policy: Single premium policy is one that covers the person for a specific period of time and guarantees payment to the nominee in case of the unforeseen demise of the insured, provided that the insured has paid lump sum amount as premium.

Cash Value: If the life insurance plan gets terminated voluntarily prior to the maturity date, the insurance provider will pay the policyholder a specific amount known as the cash value.

Vesting Age: The age of the policyholder at which the provider start giving pay-outs is known as the vesting age.

Policy Term: The total duration for which the policyholder will be covered by the insurance provider is known as the policy term.

Grace Period: If the insured could not pay the renewal premium towards his/her policy on time, the insurance provider gives them an extension in the number of days after the due date of premium payment. A grace period can be a period of 15 days, if the premium is paid monthly, and 30 days in case of the yearly mode of premium payment.

Waiver of Premium: The policyholder has a responsibility to pay the premiums regularly. Waiver of premium is the rider that the insured can buy if he is seriously ill or disabled, and hence, is not able to pay the premiums. This feature makes sure that the insured continue receiving the benefits from the company even if he can’t afford to pay the premiums.

Premium Paying Term: The total duration for which the policyholder will be paying premiums to the provider is known as the premium payment term. These terms are generally same as that of the policy term.