13 Important Terms in Insurance to Know, What Are They?

DELTASION.com - You must be familiar with the name insurance, but what about the terms in insurance? As a financial need that is for the long term, insurance is financial protection for life, assets, or others by dividing the risk of loss of the customer with insurance supporters.

The insurance supports are insurance brokerage companies, reinsurance brokerage companies, and insurance loss appraisal companies. Supporting companies are required to pay insurance premiums to customers as financial protection according to what is stated in the insurance policy agreement.

Insurance is divided into two types, namely general insurance and life insurance. If you are interested in taking care of personal insurance, let's get to know the terms in the following insurance.

1. Terms in insurance

Automatic Premium Loan (APL)

Automatic premium loan means a provision from the insurer that allows them to take the cash value from the policy automatically. This can happen if the customer does not pay the premium, even until the grace period ends.

Acquisition fee

Costs used to fund marketing, operational costs, and others are known as acquisition costs.

Cash values

As a term in insurance, cash value is the amount of money that the company gives to policyholders in cash. As interest, cash value applies to types of insurance that have investment features.

Premium leave

The term used when you want to stop paying premiums for a while is known as premium leave. Each insurance company also applies different premium leave regulations.

Grace period

As a term in insurance, the grace period is a grace period after the maturity given to customers. Although it varies, this period is on average valid 30 days after maturity.

Claim

Insurance claim is a request for compensation from the insured or customer to the insurer according to what is stated in the insurance policy.

Lapse

The term in the next insurance is lapse, which indicates the cancellation of rights caused by inactivity for a certain period of time, for example the customer's negligence in carrying out obligations.

Mortality

The term in insurance that is important to recognize next is mortality, which means the estimated time of death is uncertain. In life insurance, mortality is a consideration in determining insurance premiums.

Insurance policy

One of the terms in insurance that is important to know is an insurance policy. The policy is a written document that is legal in the eyes of the law where the customer and the insurance company are the guarantor.

Insurance premium

The term in this insurance refers to the obligation that the insurance company must pay to the customer as financial protection according to what is stated in the insurance policy agreement.

Riders

The next term in insurance is rider, which means additional benefits that you can add to the insurance program of your choice. The more riders added, the greater the amount of premium that needs to be paid.

Risk

The term in insurance also includes risk, which indicates the possibility of bad things that might happen to someone.

Sum insured

As a term in insurance, the sum insured indicates the amount of money that must be paid by the insurance company to the customer. This happens when the customer makes a claim against the risks contained in the insurance policy.

2. Costs in insurance

Insurance fee

Insurance costs are sourced from the periodic premium unit balance, if the balance is used up, the insurance fee can be taken from the Top-Up Premium Unit Balance.

Acquisition fee

Acquisition costs include costs for health checks, procurement of policies and printing of documents, field fees, postal and telecommunications costs, as well as remuneration for employees and marketing personnel.

Administrative costs

The amount of administrative fees varies and depends on how the policyholder chooses the frequency of payments.

Policy withdrawal and redemption fees

Fees charged when the policyholder makes a withdrawal of the Balance of the Periodic Premium Unit or Redemption (Surrender) of the policy within a certain period.

Cost of switching investment funds

Fees on unit linked insurance for the transfer of investment funds or switching

Investment fund management fees

Fees on unit linked insurance used by insurance companies to manage joint investment funds with Custodian Banks and securities.

Tax

Taxes charged for withdrawing or redemption of policies according to tax laws in Indonesia.
Those are terms in insurance that are important to know before registering personal insurance. This term includes acquisition costs, cash value, premium leave, and sum insured.

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