Below is a list of important terms related to Insurance exams:
Insurance is defined as a contract between two parties whereby one party called insurer undertakes in exchange for a fixed sum called premium to pay the other party called insured a fixed amount of money after happening of a certain event.
In simple terms:
An arrangement by which a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death in return for payment of a specified premium.
According to the Indian Contract Act 1872, “A Contract may be defined as an agreement between two or more parties to do or to abstain from doing an act, with an intention to create a legally binding relationship.”
Bancasurance means selling of insurance products through banks. The insurance companies and the banks come up in a partnership wherein the bank sells the tied insurance company’s insurance products to its clients.
Bank Insurance Model is also termed as Banccasurance.
A person with expertise in the fields of economics, statistics and mathematics, who helps in risk assessment and estimation of premiums etc for an insurance business, is called an actuary.
A professional statistician working in an insurance company is an Actuary.
4. Actuarial Science:
Actuarial science is the discipline that applies mathematical and statistical methods to assess risk in insurance, finance and other industries and professions.
Actuarial science includes a number of interrelated subjects, including probability, mathematics, statistics, finance, economics, financial economics, and computer programming.
5.Third Party Administrators:
Third Party Administrators or TPAs are a vital link between health insurance companies, policyholders and health care providers.
The TPAs maintain databases of policy holders and issue them identity cards with unique identification numbers and handle all the post policy issues including claim settlements.
6. Mortality Charge:
Mortality Charge is the amount charged every year by the insurer to provide the life cover to the policyholder on the life of the Life Insured. It is also called as Cost of Insurance.
7. Maturity Date:
The date on which the principal amount of a note, draft, acceptance bond or other debt instrument becomes due and is repaid to the investor and interest payments stop.
The maturity date tells you when you will get your principal back and for how long you will receive interest payments.
An Agent is a person who is licensed by state to sell Insurance. The Agents serve as an intermediary between the insurance company and the insured.
Agents are only responsible for the timely and accurate processing of forms, premiums, and paperwork.
- Captive Agent – Agent sell Insurance of a specific Company.
- Independent Agent – Agent who works independently and sells Insurance of many companies.
An insurance broker is a specialist in insurance and risk management.Brokers act on behalf of their clients and provides advice in the interests of their clients.
Insurance brokers can be best described as a kind of super-independent agent.
A long-term contract sold by an insurance company designed to provide payments to the holder at specified intervals, usually after retirement.