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Important Terms in Life Insurance You Must Know About by David Skriloff

Important Terms in Life Insurance You Must Know About by David Skriloff

Legal terms in insurance policies can be pretty confusing for a novice. However, insurers include these terms to be specific and ensure that both parties are legally bound to follow the terms. Signing off without understanding the terms can have consequences.

Important Terminologies in a Life Insurance Policy According to David Skriloff

There are particular terminologies in life insurance policies, and understanding them will help you become more familiar with the insurance plan so you can accept the policy without any doubts.

Here are the essential terms in a life insurance policy that David Skriloff attempts to explain for better understanding:

Policy Holder

The person signing off on the life insurance policy and the one who owns the policy is legally known as the policyholder. The text refers to you as the policyholder in the document. The policyholder is responsible for paying the premium.

Agent

The insurance company representative who acts as an intermediary between you (the policyholder) and the insurance company (insurer) is called an agent.

Life Assured

The person whose life is being insured is referred to as life assured. The life assured and the policyholder can be different in some cases. At times, person A (policyholder) buys a policy for person B (life assured). This would mean that person A becomes liable to pay the premium, and person B’s life is insured according to the policy. 

Premium

The amount the policyholder is liable to pay the insurer is called the premium. The insurer terminates the policy if the policyholder hasn’t paid the premium until the grace period ends.

Policy Tenure

The duration for which the policy is supposed to last is referred to as policy tenure. Policy duration and policy term are other terminologies used to describe the time the insurance company will be insuring the life assured. Policy tenure is different for every insurance policy, depending on the agreement.

Maturity Age

This is similar to policy tenure. However, instead of the duration, it refers to when the insurance policy expires or terminates officially as agreed upon.

Nominee

David Skriloff explains the nominee as the person who reaps the benefits in case the life assured passes away during the time their life is insured (policy tenure). The policyholder nominates this person when they formulate the terms of the policy.

Death Benefit

The amount the insurance company owes the nominee in case the life assured dies during the policy tenure. This amount could be just the sum assured or have more benefits per the signed policy.

Survival Benefit

The survival benefit is the amount the insurer is liable to pay in case the life assured outlives the policy tenure.

Sum Assured

David Skriloff defines sum assured as the amount the insurer is liable to pay if the life assured passes away during the time their life is insured.

Grace Period

If the policyholder cannot pay the premium by the due date, they are granted a grace period to make the payment and continue the policy. The grace period can be 13 to 30 days long, depending on the premium payment mode (yearly or monthly premium payment) the policyholder chooses upon signing.

David Skriloff’s Final Word

David Skriloff believes that since a life insurance policy is set up for your family, you must take a moment to understand these legal terms. This way, your family or you (if you outlive your policy) would not have any difficulty when the policy matures.