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Insurance Glossary

Understand key insurance industry terms and concepts to help you better understand insurance products and services.

Life Insurance

An insurance product that pays a lump sum to beneficiaries upon the death of the insured person. Used to protect family financial security and help pay mortgages, living expenses, and other costs.

Health Insurance

Insurance coverage for private medical services, including private hospital treatment, specialist consultations, and surgical procedures. Helps you skip public hospital waiting lists.

Trauma Insurance

Insurance that pays a lump sum upon diagnosis of specific critical illnesses such as cancer, heart attack, or stroke. Funds can be used for treatment, recovery, or lifestyle adjustments.

Income Protection Insurance

Insurance that provides partial income replacement when the insured cannot work due to illness or injury. Typically covers up to 75% of income to help maintain living standards.

Premium

The amount paid by the policyholder to the insurance company for insurance coverage. Can be paid monthly, quarterly, or annually.

Deductible

The amount the insured must pay out of pocket before the insurance company begins to pay claims.

Beneficiary

The person entitled to receive insurance benefits when an insured event occurs. Usually designated by the policyholder and can be family members or other specified individuals.

Underwriting

The process by which insurance companies assess applicant risk and decide whether to provide coverage and at what premium rate. Includes health checks and financial assessments.

Waiting Period

The time period between when insurance takes effect and when claims can be made. Insurance events occurring during this period are typically not covered.

Sum Insured

The maximum amount the insurance company will pay under the insurance contract. Also known as the coverage amount or policy limit.

Policy Holder

The person who signs the insurance contract with the insurance company and is responsible for paying premiums.

Claim

The process by which the insured or beneficiary applies to the insurance company for compensation when an insured event occurs.

Exclusion

Specific situations or conditions clearly stated in the insurance contract where the insurance company will not provide coverage or pay claims.

Total Permanent Disability (TPD)

Insurance that provides a lump sum payment when the insured becomes totally and permanently disabled due to illness or accident and cannot perform any work.

Mortgage Protection Insurance

Insurance specifically designed to pay off home loans. The insurance benefit is used to clear the remaining mortgage when the insured dies or becomes totally disabled.