Insurance:

Social device for minimizing risk of uncertainty regarding loss by spreading the risk over a large enough number of similar exposures to predict the individual chance of loss.

Business Insurance:

A policy, which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled.

Coinsurance:

1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required.
2) A policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 per cent by the insurer and 20 per cent by the insured.

Convertible Whole Life Policy:

A mix of 'whole life policy' and 'endowment policy', it provides for very low insurance premiums with maximum risk cover while the life assured is just beginning his working career, and the possibility of converting the policy to an 'endowment' policy after five years of commencement.

Double/Triple Cover Plans:

These offers to the beneficiaries' double/triple the sum assured on death of life assured during the term of the policy. On survival to the date of the maturity, the basic sum assured is paid to the assured. These are low-premium plans, most useful for situations such as housing.

Excess And Surplus Insurance:

1) Insurance to cover losses above a certain amount, with losses below that amount usually covered by a regular policy.
(2) Insurance to cover an unusual or one-time risk, e.g., damage to a musician's hands or the multiple perils of a convention, for which coverage is unavailable in the normal market.
Exclusions: Specific conditions or circumstances for which the policy will not provide benefits.

Family Insurance:

A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and small amounts of term insurance on the other spouse and children, including those born after the policy is issued.

Fire Insurance:

Coverage for losses caused by fire and lightning, plus resultant damage caused by smoke and water. Flood insurance Coverage against loss resulting from the flood peril, available at low cost under a programme developed by the Central government.

Franchise Insurance:

A form of insurance in which individual policies are issued to the employees of a common employer or the members of an association under an arrangement by which the employer or association agrees to collect the premium and remit them to the insurer.

Group Life Insurance:

Life insurance usually without medical examination, on a group of people under a master policy. It is typically issued to an employer for the benefit of employees, or to members of an association, for example a professional membership group. The individual members of the group hold certificates as evidence of their insurance.

Homeowners' insurance policy:

The typical homeowners insurance policy covers the house, the garage and other structures on the property, as well as personal possessions inside the house such as furniture, appliances and clothing, against a wide variety of perils including windstorms, fire and theft. The extent of the perils covered depends on the type of policy. An all-risk policy offers the broadest coverage. This covers all perils except those specifically excluded in the policy.

Keyman Insurance Policy:

A life insurance policy taken by a person on the life of another person who is or was his employee/connected to his business in any manner whatsoever.

Liability insurance:

Insurance for what the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person.

Term insurance:

A form of life insurance that covers the insured person for a certain period of time, the 'term' selected by the policyholder. It pays benefit to a designated beneficiary only when the insured dies within that specified period which can be 1, 5, 10 or even 20 years. Term life policies are renewable but premiums increase with age.

Travel insurance:

Insurance to cover problems associated with traveling, generally including trip cancellation due to illness, lost luggage and other incidents.

Guaranteed Insurance Sum (GIS):

A lump sum purchase price is given to purchase future pensions under the Jeevan Akshay Plan of Life Insurance Corporation of India. This amount is referred to as GIS. The monthly pension that is payable one month after payment of first premium is calculated on the basis of the age at entry.

Gross Insurance Value Element (GIVE):

The amount payable on the deferred date under Jeevan Dhara Life of Life Insurance Corporation of India. An annuity of 1% of the GIVE is payable per month after the deferment period. And the entire GIVE is payable on death after deferment period.

Premium Back Term Insurance Plans:

These provide for refund of all the premiums paid, in the event of the life assured surviving to the end of the policy term. The total sum assured is paid to the beneficiaries in the event of death occurrence during the policy term.

Money Back Policy:

Unlike endowment plans, in money back policies, the policyholder gets periodic 'survival payments' during the term of the policy and a lumpsum amount on surviving its term. In the event of death during the term of the policy, the beneficiary gets the full sum assured, without any deductions for the amounts paid till date, and no further premiums are required to be paid. These types of policies are very popular, since they can be tailored to get large amounts at specific periods as per the needs of the policyholder.

Non-cancelable policies:

Such policies stay in effect regardless of whatever that might happen and as long as the premium is paid from time to time.

Joint Life Endowment Assurance Plans:

The sum assured (plus any accrued bonuses) under this type of policy is payable on the end of the endowment term or on the first death of the two lives assured, whichever is earlier. Typically (though not a necessity) taken out by a couple, a variation is available for couples only. In this case, the sum assured will be payable on first death and then again on the second death (along with all vested bonuses) if both deaths occur during the term of the policy. If one or both lives survive to the maturity date, the sum assured along with all vested bonuses will be payable on maturity date. Premiums during this plan cease on the first death or the expiry of the selected term, whichever is earlier. Another variation provides for annuity to both/surviving spouse, or a lumpsum amount to the legal heirs.

Limited Payment Life Policy:

Premiums need to be paid only for a certain number of years or until death if it occurs within this period. Proceeds of the policy are granted to the beneficiaries whenever death of the policyholder occurs. Again, this policy can also be of the 'with profits' or 'without profits' type.

Loyalty Additions:

The loyalty addition is given upon the maturity of the policy, and not before. It's a small percentage of the sum assured. Broadly speaking, loyalty addition is the difference between the performance, of the insurance company and the guaranteed additions. It is LIC's effort to further share its surplus after valuation with the policyholders, as LIC is a non-profit organization.

Annuity Plans:

These plans provide for a 'pension' (or a mix of a lumpsum amount and a pension) to be paid to the policyholder or his spouse. In the event of the death of both the spouses during the policy period, a lumpsum amount is provided to the next of kin.

Deferred annuity:

An annuity contract that is purchased either with a single tax-deferred premium or with periodic tax-deferred premiums over time. Payments begin at a predetermined point in time, such as retirement.

Endowment Policy:

The assured has to pay an annual premium, which is determined on the basis of the insured's age at entry and the term of the policy. The insured amount is payable either at the end of specified number of years or upon the death of the insured person, whichever is earlier.

Whole Life Policy:

Premiums are paid throughout the lifetime of life assured. This can be 'with profits' or 'without profits' (A 'with profit' policy is eligible for various bonuses declared by LIC every year, while a 'without profits' policy does not have this privilege)

Salary Saving Scheme:

This scheme provides for payment of premiums by money deduction from the salary of the employees by one employer.