If you want to protect yourself and your family, it is essential to get the correct insurance coverage, but first you must understand insurance terminology. These are the terms you should know.

1. Policyholder

A policyholder is a person who enters into a contract with an insurance company, purchases insurance, and pays premiums. Policyholders do not have to purchase insurance themselves, they can purchase insurance for their family members.

2. Life Insured

The individual who is covered by term insurance is known as the life insured. The benefits of term insurance are payable to the nominee if the insured dies within the policy period. A term insurance policy protects the insured's life against dangers. The life insured and the policyholder do not have to be the same person.

3. Sum Assured

The sum guaranteed is the amount of money that the insurer promises to pay in the event of an unusual occurrence that is covered under the policy conditions. In the case of a loss, the purpose of term insurance is to offer financial help to the insured's family.

4. Policy Term

The policy period is the time frame in which the policy is in force. There are several forms of life insurance that protect you for the rest of your life. It is critical to understand how to appropriately purchase term insurance based on your life stage and other considerations.

5. Nominee

The word "nominee" refers to the person chosen by the policyholder to receive the benefits of the term insurance policy. In the event of an unpleasant incident, they will get the sum promised or any additional advantages. In general, individuals nominate their children, spouses, or parents as policy nominees. If the insured dies within the policy period, the nominee must make a claim in order to collect the benefits.

6. Premium

To maintain the life insurance coverage in place, the policyholder must pay a fixed amount of premium. It is up to them to determine whether payments should be made yearly, semi-annually, quarterly, or monthly.

7. Claim

When the insured person dies, the nominee must make a claim with the insurance company as quickly as feasible.The insurer must be notified in order to begin the claim settlement procedure.

8. Death Benefit

The term insurance death benefit is the sum paid to the nominee in the case of the insured's death. To get this benefit, the nominee must go through the claim settlement process.