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2nd Feb 2021 | 5 min |
Life insurance is a contract between an insurance company and the insured person. When you buy a life insurance policy, the insurer agrees to pay a specific amount to your beneficiaries, if an unwanted event occurs. The beneficiaries refer to family members dependent on you for financial support. This contractual arrangement is in lieu of the timely payment of premium.
Thus, life insurance offers financial protection at times of adversities. Understanding its key features and the commonly used terminologies make the purchase decision and the claiming process easier. This article explains the basics of life insurance and 15 different terms used in insurance.
Risk in insurance is the possibility of the occurrence of an unexpected or unpleasant event which the insurer agrees to indemnify. Human life cannot be quantified, but life insurance aims to provide a monetary sum based on the possible loss of income.
Peril is the cause of damage or losses. It is an unfortunate event that causes loss or injury to property or human. For instance, there could be a loss of life in an accident. The accident here is the peril. You buy insurance to avail financial protection against the peril.
Exposure is having the cause to undergo loss due to contingencies. For instance, if you are a frequent driver, you have a higher exposure to the risk of accidents. Thus, higher exposures are usually accompanied by higher premium rates.
Here are some common terms used in insurance policy documents:
There are two types of insurance.
General Insurance – It includes financial cover for loss or damage to assets such as house property, car, etc.
Life Insurance -This insurance consists of two variants.
Consider your financial and insurance needs when you buy an insurance plan. It is important to avail the coverage from a trustworthy insurance company. A creditable insurer advises on the type and extent of coverage needed and supports a seamless claim filing and settlement process. Hence you need not worry about the completion of the requisite formalities in your absence.
TATA AIA Life Insurance provides specially curated life insurance products divided into different categories addressing varying financial & protection goals.
Product knowledge aids in making informed decisions. Besides, understanding the commonly used jargons further simplifies the selection process.
Compare policies online and buy one that meets your financial needs best.
By submitting your details, you are giving your consent to receive SMS/Call by Tata AIA Life Insurance Company Limited or its representative, with reference to this solicited inquiry even though you may be registered on the DND list. L&C/Advt/2019/Jan/075
Rider is not mandatory and is available for a nominal extra cost. For more details on benefits, premiums and exclusions under the Rider, please contact Tata AIA Life's Insurance Advisor/ branch.
The premium paid in Unit Linked Life Insurance policies are subject to investment risks associated with capital markets and the NAVs of the units may go up or down based on the performance of fund and factors influencing the capital market and the insured is responsible for his/her decisions. Tata AIA Life Insurance Company Limited is only the name of the Insurance Company & any contract bearing the prefix "Tata AIA Life” is only the name of the Unit Linked Life Insurance contract and does not in any way indicate the quality of the contract, its future prospects or returns.
* Insurance cover is available under the products.
* The products are underwritten by Tata AIA Life Insurance Company Limited. The plans are not guaranteed issuance plans, and they will be subject to the Company’s underwriting and acceptance.
* For more details on risk factors, terms and conditions please read the Sales Brochure carefully before concluding a sale.