Financialtreat – will explain about Know, Insurances Terms You Need to Understand You Can Trust which you will get in the following article. let’s look at this article carefully!
Insurances is one of the important needs if you want to have stable and healthy personal finances. Not only an adequate emergency fund, ownership of protection is something that should not be delayed. Therefore, it is very important to have freeway insurance in traveling.
By having freeway insurances, personal finances can be protected from the risks of loss that may occur when dealing with a situation that requires large costs. For example, when you fall ill and have an accident and need medical costs or when the backbone of the family dies, the implications of an accident so that the family’s income stops.
Know, Insurances Terms You Need to Understand
The pandemic atmosphere has made insurances needs even more relevant. The risk of developing infectious diseases and the risk of death that threatens, make insurances an important endeavor to maintain body and financial health as well as peace of mind, not only social distancing. Well, if you are currently considering buying insurances, you should first recognize the important terms in insurance.
Realizing the terms in Insurances will help you find the most appropriate Insurance product tailored to your needs. What are some insurances terms that are important to understand? Check it out below:
1. Insurance Policy
Insurances Policy is a term to refer to the contract of a cooperation agreement in writing between the Insurance Provider Company (Insurance Insurer) and the Policyholder’s customer. All Insurances contracts, whether it is Life Insurances, Health Insurance to Loss Insurances, are referred to as Insurance Policies.
The content of the cooperation agreement contained in the Insurances is an agreement that the Insurance Provider is willing to bear the risks owned by the Insured whose name is stated in the policy, within the exclusive period adjusted to the agreement. To obtain insurance provision from the Insurance Provider, the Policyholder is required to pay a certain amount of the agreed insurance coverage contribution fee.
The Insurances Policy also contains the General Conditions of the Policy, details of the rights and obligations of the Insurances Provider, Policyholder, the range of Insurance Benefits provided, the article that mentions the dispensation of protection, the article that mentions things that can cancel the Policy. Not only that, in the Insurances Policy, usually attached also a coverage sheet, Special Provisions, as well as a copy of the Insurances Application Letter (Claim Letter).
The Insurances Policy includes important documents that have legal energy. Therefore, you must store it in a special area that you can easily access whenever needed, for example when you want to claim insurances.
2. Insurance coverage dues
To get insurances support, the Policyholder is required to pay a certain amount of insurance coverage contributions to the Insurances Insurer. Insurances insurances coverage dues are defined as an amount of payment set as the cost of transferring risks from the Policyholder to the Insurance Provider.
The amount of insurance coverage dues is determined by the Insurances Provider and agreed upon by the Policyholder. The size of the small insurance coverage contribution will be determined by many factors. Among others, the coverage of assistance provided by the Insurance Provider, the age of the Insurances Insured, the lifestyle or medical records of the Insured, gender model, to the insured’s employment sector.
The more complete and wider the protection range of an insurances, the premium is usually the more expensive it is. Likewise, if the Insurances Insured is considered to have a high risk, the premium is automatically more expensive. Policyholders are usually given the option to pay the option of paying insurances coverage dues. Namely: Monthly insurances coverage dues, Quarterly insurances coverage dues, Semester or Payment of Year insurances coverage contributions.
3. Insurance Insured
The term “Insured” in an Insurances Policy refers to the person or party who receives collateral compensation from the Insurance Provider when there is a risk referred to in the Policy. In the Life Insurances Policy, the Insured is the head of the family or family member who has economic value.
In Health Insurances, the Insured can be anyone such as employees, children, wives, parents, and so on. Thus, when there is a risk that is protected in the Policy, the Insured gets compensation. For example, when the head of the family who is the Insured in the Life Insurances Policy dies, the Life Insurance Sum Insured will be given by the Insurances provider to the beneficiary who has been appointed in the policy.
The Insured is not the same as the Policyholder. An Insured Person is not certainly a Policyholder. For example, as the head of your family you buy a health insurances, then you are referred to as the Policy Holder as well as the Insured. The children and wives you insure are also referred to as the Insured.
4. Insurance Benefits
Insurance Benefit means the protection obtained by the Insured Insurances and provided by the Insurance company. For example, a health insurances adds the benefits of medical outpatient costs, outpatient costs and surgical benefits. That means, when the Insured Insured falls ill and needs treatment, the Insurance provider will provide additional reimbursement for medical care costs.
There are also insurances benefits in the form and compensation as contained in the health insurance type hospital cash plan. While in life insurance, insurances benefits are in the form of sum insured. Sum Insured (UP) is an amount of funds that will be disbursed and given by the Insurance provider to the heir or beneficiary appointed in the policy, when the Insured dies.
5. Claims
Claim is a claim submitted by the Policyholder to the Insurances company as the Insurances Insurer, to fulfill the policyholder’s rights according to the adjusted policy stated in the Policy. An easy example, you have Health Insurance that covers the benefits of typhus pain. When one day you fall ill and have to be hospitalized for typhus disease.
Then you can submit a benefit claim to the Insurances Provider. The Insurances Insurer will pay financial compensation in the form of hospitalization costs and other costs according to the definition of benefits stated in the Insurance Policy.
Insurance Providers usually limit the term of insurances claims. For Health Insurances, for example, the Insurer gives a maximum claim time within 30 days since the Insured carries out treatment.
6. Acquisition Costs
This term refers to the fees that must be paid by the Policyholder to get services as an Insurances customer. Not only “Acquisition costs”, the same costs are usually referred to as policy issuances costs. The cost of issuing a policy is included in the cost of paying the insurances agent fee and the operating costs of the insurances company.
7. Lapse
The Policyholder is require to pay a certain amount of insurances coverage contributions to the Insurance Provider according to the agreement in the Policy, so that Insurances Benefits can still be obtaine during the contract.
Well, if the Policyholder does not pay the require insurances coverage contribution beyond the Grace Period (Generally for 45 days), then the Insurance Policy owne is automatically cancele or lapse. Avoid policy cancellations by ensuring that the payment of insurances coverage dues is on time according to the payment period you have chosen.
Lapse makes insurances protection that you can’t get. When a risk occurs when the Insurances has lapse status. The Insurances Provider is no longer oblige to bear the loss.
8. Cash Value
This term is commonly found in unit-linke life insurances or dual-purpose insurances (Endowment). Cash value is an amount of money that can be redeeme by the policyholder in an exclusive period of time. For example, in dual-purpose insurances products such as education insurances. There is usually a cash value that can be disburse by the policyholder. When the policy is 3 years old, 6 years old and so on.
In unit-linke life insurances. Namely life insurances that has protection features as well as investment features. Cash value means investment returns forme from investment funds. That are routinely deposite by policyholders.
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9. Additional Insurance (Rider)
This is a term to refer to additional benefits that you can add to the Basic Insurances program. Riders usually have cheaper insurance coverage dues because of their nature as a complement to Main Insurances. For example. Life Insurances products are generally equippe with riders in the form of Health Insurances. Critical Illness Insurance or waivers of premium.
Only, you need to remember, the more riders you take, the wider the Insurances Benefits you enjoy. That has consequences for the increasingly expensive insurance coverage fee that you have to pay.
Well, those are the 9 important terms in freeway insurances that you need to understand. And can be a guideline so that you can be clearer from the Insurance product that you will. Or have bought and thank you for your attention.