While purchasing the insurance, you must have to face different kind of words which is unable to understand hardly. These words are practical terms belong to insurance, that are necessary to understand so that you can take the right decision and confirmed understanding for your insurance policy.
We will explain in you in easy way and language so that you are able to purchase insurance policy easily.
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What is Premium in insurance policy?
The premium is that amount you pay to the insurance company in giving and taking for your policy. This amount is fixed for a time, such as a monthly, quarterly, or annually. which you must pay for the protection of insurance. The more Premium you will the more coverage you will get.
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Coverage in insurance plan
The coverage is that amount when insurance company promise to that will help to the insured to pay in that situation. for your losses or claim This amount based on your policy and different kind of losses are involved in this. Such as hospital’s expenses in health insurance, or vehicle fix in auto insurance.
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Sum Assured
The sum assured is the maximum amount that the insurance company will pay you under a claim. For example, if your life insurance policy has a sum assured of Rs 10 lakh, this amount will be given to your family on your death.
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Claim process in insurance
Whenever an accident occurs or the insured person suffers any kind of loss, he can demand payment from the insurance company. This kind of demand is called claim. You must inform to the insurance company to make a claim and need to submit necessary documents.
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No-Claim Bonus
If you have not made any claim during an insurance year so insurance company provide you a no claim bonus. This bonus gets you in the form of discount. For example, if you do not make a claim in auto insurance, you may receive the discount for the next year premium.
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Excess or Deductible
An excess or deductible is the amount that the insured must bear at the time of a claim. If you file a claim, you pay a set amount first; the insurance covers the remaining balance.
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Underwriting
Underwriting is that process through this insurance enquiry your insurance application and decided that your policy do need to approve or not. It involves this your health condition, age and risk, factor.
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Term
Terms means here to duration of policy. During the that time your policy is active. In the terms of life insurance, terms policies are fixed time, such as 10, 20 or 30 years.
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