Dictionary of the Most Terms in the Insurance World

We all have precious things we want to protect whether it is an income source, a possession, our health, or our family members. We fear their loss and this fear can be paralysing and can disrupt our lives and stop us from paying attention to other important things. 

Insurance policies are one of the ways we can protect our precious things. There are many insurance products that allow us to safeguard our lives, health, properties, and more. Insurance policies share the burden of the loss with the insured. 

In order to better understand insurance, its products, terms, and conditions so that you can apply for the best insurance product for your situation Faydety has compiled a list of the most important terms in the insurance world. 

6 Things You Need To Know Before Applying for an Insurance Policy 

1- Insurance Policy:

This is the contract between you (the insured) and the insurance company (the insurer). It includes:

2- Contract values: 

You can think of this as an itemized bill. It specifies what the insurance company may pay out in case a claim is made, the premium, deductibles, etc.

Declaration page:

It includes the name of the insured, their details, the beneficiaries, and the insurance policy duration. 

Coverage: 

Lists what is covered against hazards by the insurance policy as long as these hazards are stated in the policy. Any accident/hazard that occurs but is not listed in the policy is not covered by it and will not be the responsibility of the insurance company. 

Policy conditions:

Lists the policy limit, what is and isn’t covered, and how they are covered by the policy (percentage of the claim per hazard/accident). 

Special conditions:

Any special requests or extra coverage requested by the insured that are not normally covered by the policy. 

General conditions:

Lists all the policy provisions including any details concerning accidents/hazards covered by the policy as well as any exceptions. Any question you may think of should be covered in this section about coverage including wars or meteor strikes. 

Get your own insurance policy with Faydety now! 

3- Civil Liability:

 Covers unintentional damage/injury caused to a third party or their property. For example if a fire occurs in your apartment and causes damage to the building or a neighbour’s apartment then the insurance policy is responsible for covering the damage. 

4- Insurance Claim:

The formal request submitted by the insured to the insurance company for compensation. The insurance company is then responsible for sending an inspection team to asses the damage and start the claim process. 

5- Insurance Premium:

It is the yearly instalment paid by the insured. If this amount is not paid on time the policy lapses. 

What do you know about medical insurance? Check out article: 3 Reasons to Invest in Medical Insurance for Your Company.