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NIACL Assistant Study notes – Terms in Insurance Sector – Part 2

NIACL Assistant Study notes 2

NIACL Assitant 2018 Exam is scheduled to held on 8 and 9 September 2018 and the phase 2 (Main Exam) would be conducted on 6th October. 31st July is the last date to register for the exam, so if you not already done, then hurry up today is the last date. Continuing with our promise of providing you with free NIACL Assistant study notes for Exam preparation through our blogs, we bring to the Part 2 of NIACL Assistant Study notes – Terms in Insurance Sector. We hope the information provided in the below NIACL Study notes would assist you with your preparation.

NIACL Assistant Study notes – Terms in Insurance Sector – Part 1

NIACL Assistant Study notes – Important Terms in Insurance Sector

Gratuity

The amount an Employer pays to an employee as a gratitude for the service provided over a period of time as an addition to his/her normal salary is called as Gratuity. There is no employee contribution in the Gratuity Fund. As per the Payments of Gratuity Act, 1972 any employee who has worked at an organisation for a minimum period of 5 years is eligible to receive Gratuity.

Lapse Ratio  

It is the ratio of the lapsed insurance policies within a given period as compared to the number of active insurance policies at the start of the given period.

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Coinsurance

Co-insurance is the amount, generally expressed as a fixed percentage, an insured must pay against a claim after the deductible is satisfied. One of the most common co-insurance breakdowns is the 80/20 split. Under the terms of an 80/20 co-insurance plan, the insured is responsible for 20% of medical costs, while the insurer pays the remaining 80%. However, these terms only apply after the insured has reached the term’s out-of-pocket deductible amount. (Source: Investopedia.com)

Insurable Risk

Risk which meets the criteria and specifications mentioned in an insurance policy and therefore can be insured is called as Insurable Risk. The Criteria’s and specifications for a risk to be termed as Insurable risk includes nature of the risk – accidental or otherwise, whether it can be defined, the value of the loss (High loss value is not insurable, as no one would be willing to pay for it), etc.  

Encumbrance

It is a claim on a property owned by another person. When person A is not paid for the work done in person B’s house, A can seek an encumbrance (claim) on B’s house. The amount of the Encumbrance reduces the interest of the property owner.

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Terminal bonus

If a person maintains the insurance policy till the maturity date, then the Insurance company pays a sum as a loyalty bonus, which is also called as Terminal Bonus. The value of the terminal bonus is not guaranteed, it is disclosed only after the maturity of the policy.

Surrender Value

If a person decides to exit an insurance policy before it actual maturity date, he receives a pre-decided sum from the Insurance company called as Surrender Value. The payment of Surrender value is possible only after the 3 full years premiums.

That is all in this part of the NIACL Study notes on Important Terms in Insurance Sector. We hope the information provided here is useful for your NIACL assistant exam preparation. Keep checking this space for more NIACL Assistant Study notes.

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