FREQUENTLY USED INSURANCE TERMS

It is important to know and understand insurance terms so that you are informed when it comes to your coverage. Learn the meanings of frequently used terms in our glossary below.

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

 

A 

Annuity 

A contract under which an insurance company promises to make a series of periodic payments to an individual, in exchange for a premium or a series of premiums (see definition of Premium below).  

 

B 

Benefit 

This refers to medical services covered by your health plan. This word is also used to describe your health plan in general. It can also mean payment received under a plan. 

 

C 

Cash Value

The savings element of a cash value life insurance policy, which represents the policyowner’s ownership interest in the policy. 

Cash Surrender Value

The amount, before adjustments for factors such as policy loans, that the owner of a cash value life insurance policy is entitled to receive upon surrendering the policy (see definition of Surrender below).

 

D 

Deductible

A flat dollar amount of, such as $300, that an insured must pay before the insurance company will begin making any benefit payments under a medical insurance policy.

 

F 

Face Amount

The amount of the policy benefit listed on the first page of a life insurance policy.

 

L 

Lapse

The effect on an insurance policy if a renewal premium has not been paid by the end of the grace period.

 

Life Assurance

This provides a cash lump sum in the event of death of the life assured individual. 

 

Life Insurance Policy

An insurance contract under which the insurance company promises to pay a benefit upon the death of a named person.

 

P 

Policy Loan

A loan a policyowner receives from an insurance company using the cash value of a life insurance policy as security.

 

Premium

A specified amount of money an insurance company charges in exchange for its agreement to pay a policy benefit when a specific loss occurs.

 

R 

Riders

An amendment to an insurance policy that becomes a part of the insurance contract and that either expands or limits the benefits payable under the contract.

 

S 

Savings Fund

An investment feature within the Sagicor Life Inc Universal Life policies that allows for contribution, lump sum payments and withdrawals of cash.

 

Surrender

The voluntary abandonment of a life-insurance policy by the owner for any of its cash surrender value.

 

T 

Term Life Insurance

Insurance that provides a policy benefit if the insured dies during a specified period of time.

 

U 

Underwriting

The process of identifying and classifying the degree of risk represented by an individual who is being considered for insurance.

 

W 

Waiver of Premium

A supplemental life insurance policy benefit under which the insurance company promises to give up i.e. to waive, its right to collect premiums that become due while the insured is totally disabled.