Are you new to insurance? Do you know what General Insurance is?
Not to be confused with Life Insurance, General Insurance is a different type of coverage. It provides financial coverage to compensate your losses and damages in the period of cover. There are five major types of General Insurance, as stated below:
Getting started on purchasing your first general insurance could be confusing, especially with the jargon and technical terms. It may seem alien to you, but those terms are meant to be written professionally to protect your benefits in any case of dispute.
For a start, there are 9 common terms you need to know.
Probably the first common term you’ll ever hear and read. Simply put, the policyholder is the purchaser and owner (which is you) of the insurance plan who is going to pay the premium on a monthly, quarterly or yearly basis.
Premium is a collective term for the cost of cover. It indicates the amount you’re obligated to commit to keep the insurance plan active and enjoy continuous coverage. In case the policyholder fails to pay the premium on time and during the grace period, the policy will be terminated, and you’ll no longer be covered and protected by the insurance.
If I forget to pay my premium on time, will the insurance company void my insurance instantly? Don’t worry, it will not lapse immediately. There’s a grace period for you, and it means the due date will be extended for 15-30* days. However, if no premium has been made after the grace period, your insurance plan will become invalid instantly. It is in your best interest to pay on time to ensure that you are covered at all times.
Sum assured refers to the coverage amount the insurance provider offers to pay in case of an accident, admission to the hospital, and so on. It also applies to other specific events as stated on your policy. The sum assured varies according to the types of plan you sign up for.
A claimant refers to the person (yes, it’s you again!) who initiates a claim – the process to request for compensation from the insurance company in any event where you’ve made the payment upfront. Always review with your agent or refer to your insurance policy to find out which events you have to pay upfront and claim the fee later on from the insurance company. The claim process usually takes 15-30* working days, and the payment will be credited to you in your preferred method.
A nominee is the legal member(s) who are typically your family members that are eligible to accept the sum assured on behalf of the policyholder in case of an unfortunate event. However, the policyholder must nominate the nominee first when they first sign up for an insurance policy, or they’ll be ineligible to receive the sum assured even if they claim to be the family members.
Period of cover is a certain period the insurance company has promised to provide the coverage for the policyholder. Once the period comes to an end, you’ll receive a notice from the insurance company to seek your consent in renewing the insurance plan. For example, car insurance, travel insurance, or others.
In this case, a rider refers to additional coverage that “rides” on top of your existing insurance plan. Adding riders on top of your base plan can widen the scope of coverage and provide better benefits. For example, you may add a rider of medical coverage on top of personal accident. It guarantees flexibility and freedom to only sign up for necessity and avoid paying for things you don’t need at all.
You know the things that are included in the coverage. How about the things that are not? Exclusion refers to the items and events that are not covered in your policy. Hence, it’s essential to remember the exclusions to avoid any unnecessary misunderstanding. Just to name a few examples of exclusions, they are suicide cases, nature disaster, pregnancy, teeth whitening, plastic surgery, etc.
Get connected and talk to your insurance adviser today for a more thorough explanation of the coverage and terms and conditions in your insurance policy.
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