Insurance Related Terms and their Effects
Insurance related terms are always a major stumbling block for consumers who are baffled to see the complicated terms and fail to understand how these terms could affect their lives. Rather than taking the time to probe deeper into this issue, most consumers ignore these terms and sign insurance contracts with no thought about its implications.
In regards to the specific context of insurance related terms ignorance is NOT bliss and can prove to be an extremely costly mistake for the hapless consumer, as they take out a particular insurance policy which does not provide them with a level of coverage that they require at some crucial junction in their lives.
The following is intended as a breakdown of the various terms commonly used in insurance policies, to provide you with a better understanding of what they mean and how they can directly affect you:
- Concealment: this refers to where a consumer wilfully and deliberately fails to disclose some essential item of information that could/would have an effect on their eligibility to the insurance policy. If for example, a life insurance policy contract asks if you are a smoker and you say no (when you actually do smoke), then this is an act of concealment.
- Excess: this refers to a monetary threshold which the insurance policy holder will be liable for before they can competently be entitled to submit an application for indemnification from the insurance provider. If you have a claim for $500 and the excess is $100, then you would be liable for the first $100 and the insurance would cover the remainder.
- No claims bonus: a provision whereby an insurance policy holder will receive a discount on the premiums they pay, or a rebate in a lump sum of cash in exchange for the insurance policy holder not submitting a claim for indemnification.
- Aggregate limit of indemnity: this refers to the maximum amount of money which an insurer will indemnify the insurance policy holder. Please note that with this stipulation, the total value of all claims submitted by the consumer will be added together and then deducted from the grand total. Once the grand total has been reached, no more funds will be given.
- Annuity: refers to the process whereby a capital sum of money will be repaid in regular fixed installments over a specified period of time, as opposed to being paid all at once.
- Cash Surrender Value: the total amount of money that an insurance policy holder will receive in the event that the insurance policy in question is cancelled/terminated voluntarily by the insurance policy holder before it should come to fruition.
- Premium: the jargon, formal term used to refer to the process whereby a consumer will be required to pay a sum of money to the insurance provider in exchange for the coverage and protection of the relevant insurance policy.
At "Appraisal California" we have plenty of direct, working knowledge with all facets and aspects of the insurance world, and can help you with any and all issues related to insurance.