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Unit 13: Mutual Funds and Insurance Services

 Agent: A person who has the authority to act for another i.e. the principal. In insurance Notes
terminology, an agent is the person who sells insurance by contacting the policyholder.

 Beneficiary: An individual designated in a will to receive an inheritance, or to receive the
proceeds of an insurance policy, retirement account, trust, or other asset..
 Life of another-policy: An insurance policy taken on the life of another.

 Mode of payment: The manner in which payment is made i.e. monthly, quarterly, half
yearly or annually.
 Nomination: An act by which the policy holder authorises another person to receive the
policy money. The person so authorised is called Nominee.
 Medical examination: The examination conducted by a qualified physician to determine
the insurability of an applicant.

 Maturity: The date upon which the face amount of a life insurance policy, if not previously
invoked due to the contingency covered (death), is paid to the policyholder.
 Maturity claim: The payment to the policyholder at the end of the stipulated term of the
policy is called maturity claim.
 Premium finance: A finance option, which allows the insured to pay part of the premium
when insurance coverage takes effect, and pay the rest during the policy period.
 Waiver of premium: Provision to relieve the insured of premium payments due to total
disability or certain other reasons.

 Burglar and theft insurance: Risk coverage against property losses due to burglary or
robbery.

 Compulsory insurance: Any form of insurance, which is required by law, e.g. Motor, third
party insurance.
 Fire Insurance: A policy that covers the movable and immovable assets against fire and
allied perils.
 Fidelity: Fidelity guarantee, covers the risk of the employers in the event of fraud by an
employee. This risk arises due to the dishonesty of employees who hold a position of
trust.
 Human life value: For purpose of life insurance, the present value of family's share of
deceased breadwinner's future earnings is considered as human life value.
 Marine Insurance: A policy that covers cargo, hull and freight, both in ocean and inland
transits.

 Liability insurance: Insurance covering the policy holder's legal liability resulting from
injuries to other persons or damage to their property.

 Liability limits: The stipulated sum beyond which an insurance company is not liable to
protect an insured.
 Personal insurance: The risk of individuals and families are covered under personal
insurance. Examples are life insurance, pensions, accidents, sickness, old age coverage etc.
Personal insurance protects against two distinct risks-premature deaths and living too
long.
 Product liability insurance: Protection against loss arising out of the legal liability incurred
by a manufacturer, merchant, or distributor because of injury or damage caused to a
consumer resulting from the use of its product.

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