The Basics Of Insurance

Insurance is the promise of the compensation for a specific possible future loss in the exchange for the periodic payment. The insurance is aimed to protect t financial well-being of the individual, a company or other body in a case of the unexpected loss. There are terms which are used in the insurance policy. Here are some of them
Sum assured or Cover
It is the amount being paid out on the policy when you die within a Term of the insurance plan. If the endowment policy happens, the Sum Assured may be paid on the maturity together with the bonus. If the Money back policies the part of the Sum Assured have been spent on daily intervals and the maturity together with a bonus on the regular intervals. The guaranteed amount is required to be paid at the maturity with/without the Bonus.
Premium
The owner pays typically the fixed premium amount for the exchange of the guarantee’s insurance company to cover the economic losses being incurred under scope of an agreement of the insurance.
Bonus
This is the amount being added to a basic sum being assured under the policy of with-profit life insurance.
Surrender value
This is an amount which is payable by an insurer to an owner of the investment-based plan if he opts to dismiss a policy after 3 years which is a mandatory lock-in period though before the maturity date. A surrender value can be a premium paid until time minus the surrender charges together with any outstanding loans which are in due.
Endowment Policy
This is the life insurance contract which is designed to pay the lump sum after the specific term or on the death. The maturities can be ten, fifteen or even twenty years upto the age limit. Some of the policies pay in a case of the critical illness.