1. What is insurance?
Insurance is a financial arrangement that provides protection against the risk of financial loss. It involves individuals or entities paying a premium to an insurer in exchange for a promise of compensation if specific events, such as accidents, illnesses, or damage to property, occur.
2. What are the different types of Insurance Coverage?
Insurance coverage can vary widely depending on the type of policy. Common types include health insurance, life insurance, auto insurance, home insurance, and liability insurance. Each type provides coverage for specific risks or losses.
3. What do you mean by ‘insurance coverage’?
Insurance coverage refers to the scope of protection that an insurance policy offers. It outlines what is insured, what is excluded, and the limits of the coverage. It’s essentially a detailed description of what the policyholder can expect in terms of protection.
4. What is premium insurance?
Premium insurance is not a standard term. It might refer to insurance premiums, which are the periodic payments made by policyholders to the insurer in exchange for coverage.
5. What do you mean by the terms ‘Insurer’ and ‘Insured’?
An “insurer” is the insurance company or entity that provides the insurance policy. The “insured” is the person or entity covered by the insurance policy, also known as the policyholder.
6. Who is the beneficiary?
The “beneficiary” is the person or entity designated to receive the insurance payout or benefits in the event of a covered loss or the insured’s death.
7. What is the contestable period in an insurance policy?
The contestable period is a specific timeframe, typically the first two years of a life insurance policy, during which the insurer can contest the policy’s validity or deny a claim if there’s a material misrepresentation or fraud by the insured.
8. What is the difference between “revocable beneficiary” and “irrevocable beneficiary”?
A “revocable beneficiary” can be changed or revoked by the policyholder without the beneficiary’s consent. In contrast, an “irrevocable beneficiary” requires the beneficiary’s consent to make changes, providing more security for the beneficiary.
9. What is the no-claim bonus?
A no-claim bonus is a discount or bonus offered by insurance companies to policyholders who do not make claims during a specific period. It encourages policyholders to maintain a good claims history and rewards them with lower premiums.
10. What is a ‘declaration page’ in an insurance policy?
The declaration page is a document that provides a summary of essential information about an insurance policy. It includes details such as the policyholder’s name, coverage limits, premiums, and the policy’s effective dates.
11. What do you mean by ‘Loss Payee’?
A “loss payee” is a party, such as a lender or a leasing company, who is entitled to receive insurance proceeds in the event of a loss or damage to property that is financed or leased. They are typically listed on the insurance policy.
12. What do you mean by ‘Deductible’?
A “deductible” is the amount that the policyholder must pay out of pocket before the insurance company starts covering the remaining costs of a claim. It helps reduce the insurer’s risk and often lowers the premium.
13. What is Co-insurance?
Co-insurance is a cost-sharing arrangement in some insurance policies. It requires the policyholder to pay a percentage of the covered expenses, while the insurer covers the remaining portion, after the deductible has been met.
14. What do you mean by the term “Annuity”?
An “annuity” is a financial product or contract typically offered by insurance companies. It provides regular, periodic payments to an individual over a specified period, often used for retirement income.
15. What is the Surrender Value?
The “surrender value” is the cash value that a policyholder can receive when they surrender or cancel a permanent life insurance policy before its maturity or without making a claim.
16. What is Paid Value?
“Paid value” is not a standard insurance term. It might refer to the amount paid by the policyholder in premiums, or it could be specific to a particular insurance policy or context.
17. Is it advisable to replace the policy with another policy?
Replacing an insurance policy should be done carefully and after considering the potential advantages and disadvantages. It’s advisable to consult with a financial advisor or insurance expert before making such a decision.
18. How to claim the policy?
To claim an insurance policy, the policyholder or beneficiary typically needs to contact the insurance company, complete the required claim forms, provide necessary documentation (e.g., medical records or police reports), and follow the insurer’s claim process.
19. **What happens if you fail to make the required premium payments?**
If premium payments are not made as required, the insurance policy may lapse, and the coverage will no longer be in force. Policyholders should be aware of any grace periods or options for reinstating the policy.
20. Is it safe to pay the premium through an Insurance Agent?
Paying premiums through an insurance agent is generally safe and common. Ensure that the agent is associated with a reputable insurance company, and always request receipts for premium payments.
21. Is it possible to get the full payment on canceling the new policy in the free look period?
During the free look period, policyholders can typically cancel a new insurance policy and receive a full refund of premiums paid. However, this period’s duration and conditions may vary depending on the policy and local regulations.
22. What is the difference between participating and non-participating policies?
A “participating policy” allows policyholders to receive dividends or bonuses from the insurance company’s profits. In contrast, a “non-participating policy” does not offer such participation in the insurer’s earnings.
23. Is it possible to restrict the premium payment for a lesser number of years than the duration of the policy?
Some insurance policies offer flexible premium payment options, allowing policyholders to pay premiums for a shorter duration while keeping the policy in force for a more extended period. However, these options vary by policy and insurer.
24. Can the beneficiary claim the policy if the insured person is missing or disappeared for several years?
If the insured person is missing for an extended period, the beneficiary may be able to claim the policy after complying with the insurer’s requirements, such as filing a missing person report and providing evidence of the disappearance.
25. Can an individual take two policies and claim for both of them?
Yes, it’s possible for an individual to have multiple insurance policies. In the event of a covered loss, the policyholder can make claims under all applicable policies to receive benefits, as long as the claims do not involve double recovery.
26. What do you mean by ‘Additional Insured’?
An “additional insured” is an individual or entity added to an insurance policy by endorsement. They are granted some level of coverage under the policy, often in cases where there is shared liability or interest in the insured property or activity.