1. Policy holder: Also known as the policy owner, this is the person who owns the policy. The policy holder is the one who buys the insurance and pays regular premiums.
2. Life Assured: This refers to the person for whom the insurance is bought. This may or may not be the same as the policy holder. For example, if you buy insurance for yourself, you will be the policy holder and the life assured. But, if you buy insurance for a parent, and pay the monthly premiums for them, then you will be the policy holder while the life assured will be your parent.
3. Nominee: The nominee or the beneficiary is the person who inherits the sum assured in case the life assured passes away. This is normally chosen by the policy holder and can be a family member or a close relative.
4. Sum Assured: This is the amount that the insurance company pays to the nominee on the death of the life assured. For example, let us assume that you buy a term life insurance policy for yourself and nominate your wife as the beneficiary. You will be required to fix a sum assured at the time of purchase. Let us say that the sum assured is Rs 1 crore. Now in the unfortunate event of your death during the tenure of the policy, your wife will receive the sum assured of Rs 1 crore from the insurance company. The sum assured is also sometimes referred to as the cover.
5. Policy Term: This is the period for which the insurance policy is active or valid. This period can differ from policy to policy and can range from anywhere between a year to a lifetime. Let us say that the policy term for an insurance policy is 50 years. Now if the person who is the life assured for the policy dies during this period, the insurance company will be liable to pay the nominee the sum assured. This is also called policy tenure or policy duration.
6. Premium: This is a fixed amount that the policy holder pays the insurance company in return for insurance. You can choose between different plans of payment like monthly, quarterly, annually, etc. The premium is an important aspect of an insurance policy.
7. Payment Term/Mode: The payment term or mode refers to the different ways in which you can pay the premium to the insurance company. There are primarily three types of payment modes:
- Regular Pay: In this method, the policy holder pays premiums throughout the policy term.
- Limited Pay: In this plan, the policy holder can choose a certain period for the payment of the premium. For example, if you choose 5 years, then you have to pay premiums for only 5 years while the policy remains in force for the entire term selected by you.
- Single Pay: In this method, the policy holder pays the premium in one go. This is usually paid at the time of purchasing the insurance policy.
8. Death Benefit: The death benefit is the total sum that the insurance company pays to the nominee in case of the policy holder’s death during the policy term. This is generally equal to the sum assured. However, in insurance plans where riders are involved, the death benefit can also be higher than the sum assured.
9. Maturity Benefit: Some policies pay the policy holder an amount in case he/she survives the policy term. This is known as the maturity benefit.
10. Riders: These are optional add-ons to your existing term life insurance policy. They are over and above the terms of your policy. They can be benefits like an accelerated critical illness pack or an accidental death benefit pack. The policy holder is liable to pay extra for riders at the time of buying the policy.
11. Claim: If the life assured dies during the tenure of the policy, the insurance company does not directly pay the sum assured to the nominee. You are required to file a claim to the company, after which you receive the coverage.
12. Free Look Period: Imagine you buy a term life insurance today, but change your mind about it later. An insurance policy usually comes with a free look period which is the duration within which you can terminate the policy without paying penalties. This period can differ from policy to policy.
ADVT No.: W/II/0914/2019-20
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1 Top-selling plan refers to ICICI Prudential Life Insurance plans which are bought by customers through the website with our Zero-Paper-Process. Source: Company BuyOnline data - Dec 2015 till date.
2 The above mentioned premium rate is for ICICI Pru iProtect Smart for ₹ 1 Crore of life cover for a 25 year old healthy male for a policy term of 21 years with regular income payout option. The annual premium will be ₹ 5725 & the monthly premium will be ₹ 490. The premium amounts are inclusive of taxes.
3Refer the product brochures for the definitions, exclusions and other terms and conditions applicable for Permanent Disability due to accident and Terminal Illness.
4Critical Illness Benefit is optional and available under Life and Health and All in One options. This benefit is payable, on first occurrence of any of the 34 illnesses covered. The CI Benefit, is accelerated and not an additional benefit which means the policy will continue with the Death Benefit reduced by the extent of the CI Benefit paid. The future premiums payable under the policy will reduce proportionately. If CI Benefit paid is equal to the Death Benefit, the policy will terminate on payment of the CI Benefit. To know more in detail about CI Benefit, terms & conditions governing it, kindly refer to sales brochure. Critical Illness benefit is available till age of 75.
5Accidental Death benefit is up to ₹ 2 Crores. Accidental Death Benefit is optional and available in Life Plus and All in One options. Accidental Death Benefit cover is available upto age 80.