Accident
An unexpected external and
violent factor. An unplanned event, unexpected and
undersigned, which occurs suddenly and at a definite place.
Accidental Death:
Benefit will be paid in case
of the insured died from the cause of an accident
Annual Statement:
Summary of an insurer’s or re
insurer’s financial operations for a particular year,
including a balance sheet.
Application
A signed statement of facts
made by a person applying for life insurance and then used
by the insurance company to decide whether or not to issue a
policy. The application becomes part of the insurance
contract when the policy is issued.
Beneficiary
This is the person who
benefits from the terms of a trust, if the beneficiary is a
spouse, parent, offspring or grand-child, they are
considered to be a preferred beneficiary. The person who
receives the death benefit when an insured person dies.
Cancellation
Termination of a contract of
insurance in force by voluntary act of the insurer or
insured in accordance with the provisions in the contract or
by mutual agreement.
Cash Value (or Surrender Value)
In a permanent insurance
policy, the cash value is the money that the policyholder
can take out, either by canceling the policy or withdrawing
the money early. However, if the money is withdrawn without
canceling the policy, it can affect the amount of the death
benefit. A policyholder can also use the cash value of a
policy to pay all or part of a policy's premiums.
The amount of money that is considered to be the investment
part (Premium + Performance) for every customer regarding
his policy.
Claim
A demand made by the insured,
or the insured's beneficiary, for payment of the benefits
provided by the contract.
Coverage
The scope of the protection
provided under a contract of insurance. Incase of death or
permanent total disability of the insured, a lump sum will
be paid to the chosen beneficiary.
Date of Issue
The date stated in a policy as
the date on which the contract was issued by the insurer.
This is not necessarily the effective date of the policy.
Death Benefit
The money paid to the
beneficiary when the insured person dies.
Delay
Period within for example a
grace period of payment could be guaranteed to the insured.
Disability
A condition that curtails to
some degree a person's ability to carry on his normal
pursuits. A disability may be partial or total, and
temporary or permanent.
Face amount
The amount of money that is
going to be paid to the beneficiaries or to the policy owner
/ insured in case of risk due.
Grace Period
The length of time (usually 31
days) after a premium is due and unpaid during which the
policy, including all riders, remains in force.
Insurance
A contract in which payment of
premiums covers the insured against something which may, or
may not occur.
Insured
This is the person covered by
the life insurance policy. Upon this person's death, a tax
free benefit will be paid to that person's estate or a named
beneficiary.
Insurer
An authorized company which
provides insurance.
Intermediary
An agent, broker or financial
institution which can give advice and act as a middle person
between a company and a client conducting investment
business.
Lapse
In insurance terminology, a
policy is deemed to have lapsed when the policyholder fails
to pay the renewal premiums. Also, it may be that the
insurers do not invite renewal.
Lump sum
A sum of money paid in a
single installment.
Medical Examination
Usually conducted by a
licensed physician or another approved examiner; the medical
report is part of the application, that becomes part of the
policy contract and is attached to the policy. A document is
completed by the physician or another approved examiner and
submitted to an insurer to supply medical evidence of
insurability (or lack of insurability) or in relation to a
claim. A “non-medical” is a short-form medical report filled
out honestly by the agent.
Owner
This is the person who owns
the insurance policy. It is usually the same person as the
insured but it could be someone else who has the permission
of the insured to be the owner, like a spouse, a
common-law-spouse, an offspring, a parent, a corporation
with insurable interest or a business partner with insurable
interest. In order for someone else to be an owner of your
policy, they have to have a legitimate insurable interest in
you.
Policy Anniversary
The anniversary of the date of
issue of a policy as shown in the policy declarations.
Policy Fee
This is an administrative fee
which is part of most life insurance policies.
Policy
A written contract for
insurance between an insurance company and policyholder
stating details of coverage
Policyholder or Policy Owner
The person who owns a life
insurance policy. This is usually the insured person, but it
may also be a relative of the insured.
Premium
This is your payment for the
cost of insurance. You may pay annually, semi-annually,
quarterly or monthly.
The amount of money that is
necessary to be paid to continue with the insurance policy.
Rate
The cost of a unit of
insurance, usually per 1,000 EGP.
Rates are based on historical
loss experience for similar risks and may be regulated by
insurance companies.
Savings
A savings plan for either a
personal project or simply a financial investment. Incase of
death or permanent total disability of the insured, the
beneficiary will receive the sum insured plus the saved
amount. A saving plan is often covering the death and the
disability.
Sum Assured
The amount the company
guarantees to pay out under traditional or term policies
upon death, disablement, or when the policy matures.
Surrender
Canceling a life insurance
contract before it has run its full term.
Temporary Life Insurance coverage
Temporary insurance coverage
is available at time of application for a life insurance
policy if certain conditions are met. Normally, temporary
coverage relates to free coverage while the insurance
company which is underwriting the risk, goes through the
process of deciding whether or not they will grant a
contract of coverage.
Term
The period of time for which a
policy is issued.
Term insurance
A form of life insurance that
covers the insured person for a certain period of time, the
“term” that is specified in the policy. It pays a benefit to
a designated beneficiary only when the insured dies within
that specified period which can be one, five, 10 or even 20
years. Term life policies are renewable but premiums
increase with age.
Terminal Illness
Diagnosing with a terminal
illness that will lead to death within 12 months
(certificate from doctor is required).
Total & Permanent Disability (TPD)
Unable to perform any kind of
work as a result of sickness or an accident such as losing
both arms or legs or one arm and one leg.
Valued policy
A policy under which the
insurer pays a specified amount of money to or on behalf of
the insured upon the occurrence of a defined loss. The money
amount is not related to the extent of the loss. Life
insurance policies are an example.
Waiting period
The period stipulated in some
Accident and Disability policies before the benefit payments
commence.
Waivers of premium
It is the burden that the
company takes to complete the continuity of the policy
(Paying the premiums) in case of death or disability
occurring to the insured.
Whole of Life Insurance (WOL)
A policy under which the sum
assured, plus any bonuses, is paid only on the death of the
life insured.
A Whole of Life policy can be participating - that is it
allows you to share in the company's profits. The profits
are distributed in the form of bonuses which are added to
the benefit that will be paid when you die. If the policy is
non-participating, your premiums will be lower for the same
sum assured, but the sum assured will not grow.
Participating Whole of Life policies have a surrender value,
after an initial period (usually between 2).
Frequently Asked Questions
