Life Insurance Summary Terminology
Useful
Actuary
Technician of the insurance company, responsible for determining the premiums and the general operation of the contract.
Reinsurance
The insurance of the excess amounts in reinsurance companies.
Insured
The person for whose life the insurance contract has been concluded.
Insurance
The assumption of a large number of similar risks, where the damaging event must be accidental, to occur within a specific period of time e.g. year, to cause financial loss of a fixed amount, and the premium to be proportional to the probable loss.
Survival insurance
The insurance in which the insured capital is paid at the end of the contract as long as the insured is in life.
Life insurance
Contract between 2 parties, where the contractor with the payment of the premium for a specific period of time, obliges the Insurance company to pay to itself or the beneficiaries the agreed capital after the expiration of the agreed period.
Death insurance
The insurance in which the insured capital is paid to the beneficiaries in case of death during insurance.
Insurance – Social role
Greater insurance for individuals and families and businesses prevents the effects of damage. Prevents financial weakening. It relieves the State from the provision of welfare services. It creates a source of funds that are invested in government bonds and channeled to the private sector through the stock exchange.
Mixed insurance
The insurance in which the insured capital is paid either at the expiration of the contract to the contractor or in case of death to the beneficiaries.
Insurance company
Financial organization, which with the insurance premiums of many, groups the risk, thus minimizing the financial burden.
Insurance Consultants
The link between a client and an insurance company.
Premium
Amount of money paid by the contractor as a result of the insurance policy.
Automatic payment of premiums
It takes place in case of inability to repay the installment, as long as it is not greater than the redemption value of the contract.
Loan
Amount that the contractor can borrow from the company with a guarantee of the value of the contract at the time of borrowing.
Beneficiary
The person designated by the party and to whom the life insurance policy is paid in case of death of the insured.
Single premium
One-time payment of premium at the beginning of the insurance.
Extra Premium
Additional premium, corresponding to the increased risk that the prospective client may present.
Danger
The random and uncertain event that can positively or negatively affect an economic activity. The positive consequences are beneficial. Negatives have devastating consequences. The probability of the accidental or uncertain event occurring can be defined mathematically or statistically and so we can refer to the risk in the insurance sense of the term (insurable risk). The probability of the accidental and uncertain event occurring is excluded or minimized by investing part of the profits in insurance.
Danger – Dealing
The cost of the risk is called the premium and is derived from the formula: Premium = (P x Z) + EP = the probability of occurring lossZ = the average amount of the lossE = costs and profit margin.
Danger – Relocation and dispersion
The insurance consultant, the natural person of the insurance company, takes care of the proper management of the risk and has the possibility of dispersing the risk, ensuring the participation of the reinsurers. It undertakes large numbers of similar risks, ensuring their best predictability. He has specialized knowledge and experience.
Mathematical stock
The amount that the Company is obliged to store and invest, based on the terms of the contract, in order to create value at maturity.
Grace period
Deadline of 30 days during which the contract is valid, without the premiums being paid.
Mortality table
Table with the number of deaths that statistically occur in a group of insured, within a given period of time.
Contract – Cancellation
Deletion from the books of the contract company, for any reason other than death, payment of capital or expiration.
Contract – Redemption value
Amount paid to the contractor when the contract is terminated at his request.
Contract – Compensation
It is paid to the insured when the risk explicitly stated in the contract occurs.
Contract – Additions
Special attachments to the contract that are included to extend the usual benefits.