Common Life Insurance Terms

Premium

This is the amount paid to the insurance company to get the life cover. The premium you have to pay depends on the policy. It can be yearly or in one go even.

The insurer and Insured

The one who is the policyholder is the insured and the company which does the policy is the insurer.

Sum assured

It is the amount which the company is ready to pay along with the bonus. Being specific it is the amount which your nominee will get.

Bonus

This is an additional amount which is given along the submitted amount by the company to the nominee of the policyholder.

Maturity Value

The amount which the life insurance company pays on maturity is known as the maturity value. It is sum assured plus the bonus.

Surrender Value

If in between the policy you decide to discontinue, you can take the money which is due to you, the life insurer pays the amount which is called the surrender value.

Paid-up value

If you do not withdraw the money from the insurance company but you stop paying premiums, then the policy you own earns paid-up value. Depending on the number of premiums you have paid the company will reduce the sum assured considerably and pay the rest amount.

Survival Benefit

This is a fixed particular amount paid up by the company to the policyholder after a specific period.

Annuity

It is the regular payment which the insurance company agrees to pay after you cross a certain age. For example, if you cross 55, then the life insurance will pay you monthly or quarterly the amount which is decided. Thus this payment is called annuity.

Thus to secure the future of your whole family including yours, life insurance is the best means which will help you to stay out of financial crisis in case of any issue or mishap. So get the best policy which suits your needs and fits your pocket.