Glossary Terms to Know Before Buying Life Insurance.

In an era where nothing is certain, many people begin to seek stability in life. Having life insurance is another way to secure safety in life. However, without research and going through the insurance information first may cause misunderstanding which will lead to getting life insurance that might not match your needs. This article will introduce you to life insurance terminology so you can understand insurance conditions before purchasing the most suitable one.

Life Insurance.

Life insurance is a financial contract between an individual (the policyholder) and an insurance company. The purpose of life insurance is to provide a payout to the policyholder or family members in case of death or disabilities causedcause by accidents.

Life Insurance Contract. (The Main Contact)

A life insurance contract is a legally binding agreement between an individual (policyholder) and an insurance company. The contract outlines the terms, conditions, the premiums and details of life insurance coverage that the insurance company provides to the policyholder. There are 3 types which are:

1. Term insurance.

Term insurance is a type of life insurance that provides coverage for a specified period such as 10, 20, 30 or another term length. During this period, the policyholder must pay an insurance premium to the insurance company within the remaining period of the contract. If death occurs within this period, family members will receive the benefits specified in the contract.

2. Whole Life Insurance.

Whole life insurance is a type of permanent life insurance that provides coverage for the entire lifetime of the policyholder, as long as the premium is paid according to the terms of the policy. Whole life insurance offers lifelong protection including death coverage and savings.

3. Endowment / Saving Insurance.

Saving insurance is an insurance plan that allows the policyholder to save and invest their money for themselves and their beneficiaries. It is a combination of life insurance and investment. In case of death during the coverage period, beneficiaries will receive the benefits according to the contract.

Additional Life insurance. (Riders)

Riders are optional coverage or add-ons to your base policy for additional coverage. Riders can help cover life events that your standard plan does not.

Policy.

A policy is a contract or an agreement that specifies terms and conditions, details of coverage and benefits of an insurance which occurs between the insured (policyholder) and the insurance company

Sum Assured.

Sum Assured is the amount that the insurance company provides to the policyholder or the insured in case of unexpected events such as illness, injury or even death according to the insurance plan that they agreed on.

Assured/Insured.

Assured or Insured is a term that refers to a person whose life is being covered by the policy. The insured must pay premiums in order for the contract to continue until its expiration.

Beneficiary

The policyholder designates the individuals who will receive the benefits in the event of their passing. Beneficiaries can be family members, friends or other parties chosen by the policyholder and can be more than one person.

Premiums.

The contract specifies the premiums payment schedule, including the frequency of payments (monthly, annually, etc) and also the amount of each payment.

Period of Insurance.

It is a time or a period when the coverage and benefits in the insurance policy are effective.

Concealment.

Concealment refers to the intentional of concealing relevant information by the insured when applying for insurance. When applying for insurance, the insured must provide accurate and completely honest information about the risks they want to insure. This information is used by the insurance company to assess the level of risks and the appropriate premium. Not telling the whole truth can lead to cancellation of the policy or medical costs might not be covered by the insurance company.

Once you know and understand about the terminology of life insurance, choose your life insurance with dSurance, the online platform that gathers insurance from leading companies nationwide. Everyone can compare insurance coverage and select life insurance that meets their needs the most with suitable premiums, all in just one place, easy and super convenient.