Insurance – Common Terminology
The only thing certain in this world is UNCERTAINTY. Insurance is a method of protection from contingencies and financial losses arising due to uncertain risks.
Key Terms
Insurance Regulatory & Development Authority of India (IRDAI)
The Insurance Regulatory and Development Authority of India is a regulatory body under the jurisdiction of Ministry of Finance, Government of India and is tasked with regulating and licensing the insurance and re-insurance industries in India.
Insurance Company (Insurer)
A company that is authorised by IRDAI (Insurance Development Authority of India) for selling insurance products and services.
Insurance Broker
An insurance broker is a specialist in insurance and risk management. Brokers act on behalf of their clients and provide advice in the interests of their clients. A broker will help you identify your individual and/or business risks to help you decide what to insure, and how to manage those risks in other ways.
Insurance brokers can give you technical advice that can be very useful if you need to make a claim. Brokers are aware of the terms and conditions, coverages and exclusions and costs of a wide range of competing insurance policies; so they can help you find the most appropriate cover for your own circumstances. Brokers can help arrange and place the cover with the chosen insurer.
Policyholder
The individual or an entity who owns the insurance policy.
Insured
The individual or an entity who’s risk is covered under the policy.
Policy
A contract in which an individual or entity pays an insurance company in exchange of financial protection or reimbursement of losses resulting from a covered event.
Policy Period
The duration for which the loss is covered in the policy.
Sum Insured
The total amount of risk covered by the policy in a policy period.
Premium
The amount paid to Insurer for purchasing the insurance policy that covers the risk.
What Are The Kinds Of Insurance Offered In India?
GENERAL INSURANCE – General Insurance plans fall under the categories of:
Health
Health insurance or medical insurance is a type of insurance that covers the risk of a person incurring medical expenses.
Travel
Covers the risk involved while travelling.
Automobiles / Motor
Mandated by the Government, Motor Plans protect against liabilities and losses to self / vehicle and third party.
Home and Assets
Plans to protect homes, assets and valuables therein from Burglary, Fire and other disasters.
Commercial
Plans to protect a company/organisation w.r.t Property, Engineering, Marine, Workmen’s Compensation, Business Interruptions etc.
Life
Life Insurance is a means of financial protection against unfortunate events like death or disability of insured.