Insurance is a sort of financial agreement to protect you from loss. You might be unaware of some important insurance terms you need to know. Because insurance documents are written with different insurance terms which you’re not familiar with. Here we are discussing some main Insurance terms for your guidance.
Insurance: An agreement in which insurer help insured one to overcomes their loss by using their prior paid payments.
Risk: Possibility of any loss, for either good or bad.
Floaters: Such insurance policies designed to protect your properties and can be shifted from one spot to another. It covers insurance for a fixed place or transport perils.
Pure Risk: The possibility of such loss, which can affect you in a bad way.
Physical Hazard: Any possibility about any building, place or job that can cause a larger chance of bad ending.
Liability: When you are supposed to pay some amount for the opponent’s loss according to law.
Premium: That prior amount, you’re supposed to pay in the promise that insurer will pay you a huge amount in case of any loss which is covered by that plan.
Insured: The individual that will be benefited in the result of any purchased insurance plan.
Insurer: That agent/company/organization that provides insurance plans for prior payments and promise that they will help in that loss that is being covered in that plan.
Policy: Policy is a written paper in which all of the plan’s details are included. In this paper, you can get to know what that plan will cover that you are about to buy.
Policy Contract: A written legal promise.
Policy Holder: Policy Holder is the one who owns the insurance or pays the amount to buy the insurance.
Life Insured: Someone for whom the insurance plan has been purchased. The life Insured may or may not be policyholder. For example, a father purchases insurance for his son. In this case, the father will be policyholder and son will be insured one.
Grace Period: the extra time given by your insurance company in case of when you couldn’t make the payment on time.