Life Insurance Contract Is and Other Terms
Life Insurance Contracts Are and Other Terms – Life insurance is a type of insurance that provides protection to a person’s life for financial losses caused by risks such as death. This type of insurance is very suitable for family protection.
Because later it will provide financial benefits to the bereaved family if the customer dies. In life insurance, we will find several terms such as insurance contracts, claims, premiums, and other terms.
Which you may have just heard and is still foreign to your ears. Well, here are some terms in life insurance that you need to know.
Terms in Life Insurance
Life Insurance Contract
A life insurance contract or life insurance policy is an agreement that has legal force that contains an agreement between the insurance company and the policyholder customer. Matters related to the contract agreement along with the details of the insurance are contained in a written agreement or insurance policy.
The contract covers the rights and obligations of the insurance company and its customers, insurance exclusions, general policy terms, and other matters relating to the life insurance products purchased.
Life Insurance Premium
Life insurance premiums are a number of contributions that must be paid by policyholders or customers to insurance companies. This contribution arises as a result of the transfer of risk from the customer to the insurance company. Premiums are also the customer’s obligation to insurance companies.
The amount of premium varies depending on the type of product purchased by the customer. Each insurance company charges a different rate depending on the facilities they provide.
Claims on life insurance are demands from the policyholder to the insurance company to provide or pay a number of benefits that have become the rights of the policyholder.
The claim occurs at the time the risk occurs. Simply put, a claim is the process of disbursing insurance funds from an insurance company to replace or bear losses from these risks.
Lapse is an insurance policy cancellation due to late payment of premiums beyond the grace period. Premiums that are not deposited beyond the grace period will result in the cancellation of the life insurance policy.
When experiencing Lapse, the protection and benefits of the insurance product are no longer valid. So, try to pay premiums on time.
Rider is an additional benefit added to insurance products at a lower cost. These additional benefits are for example health insurance products with benefits for critical illnesses.
The more riders you add to the insurance product. Then the more expensive the premium paid by the customer. Because, the rider will increase the amount of premium directly.
The insured party is the party who gets the benefits of protection or insurance coverage. Then who is the insured party? The answer is policy holders or customers who buy insurance products.
The Insurer is the party that guarantees or bears the risk transferred from the customer. Who is the insurer? The answer is insurance companies. Insurance companies will guarantee and provide protection against risks that may occur to their customers.
The sum assured is the amount of money or funds that must be paid by the insurance company to the customer when an insurance claim occurs.
The sum assured or the sum assured is the insurance company’s obligation to the customer. For example, when a customer dies, the company must pay the sum insured to the customer’s family.