The Term Is Important In Insurance

There are many term insurance, maybe some you already know but many were not. Indeed it is sometimes confusing, but hopefully this article can answer your questions about the terms of insurance.

1. Actuarial (actuarial)

Function at an insurance company that is applying the principles of mathematics, including calculating insurance/premium price list taking into account as well as ensuring the financial health of the company.

2. Annuities (annuity)

Annuities provide a fixed annual income for life. Typically, a number of cash money invested so that at a later date can generate funds to earn a steady income for life.

3. Assignment (transfer of rights)

Transfer of part or all of the rights to receive income earned from an insurance policy from a person or unity, to another person or entity.

4. Automatic Premium Loan/Non-Forfeiture of Loan (loans/auto loan premiums without redemption)

If premiums are not paid in the period of the grace period and the policy has sufficient cash value, there is a provision which sets so that the amount of the corresponding premium paid in advance automatically. As for the loan amount premiums are still indebted may incur interest.

5. Cash Value/Surrrender Value (cash value/value of ransom)

The amount of money that will be received by policyholders when he poured his soul which has the insurance policy benefits the value of savings.

6. Endowment Plan (grant program)

This type of insurance program combines good protection benefits or savings. This insurance program paid benefits a number of cash money to the insured when the policy matures. The program also pay this amount at the time the insured dies, or when applicable, when the insured underwent a thorough and disability is permanent, and if this occurs during the validity period of the policy.

7. Grace Period (grace period)

Period of time after the expiration of the premium payment date falls in which the premium payment still can be done without incurring interest. During this time period, the policy is still in effect.

8. Investment-linked Plan (insurance program that is associated with the investment)

Premium-premium paid are used either to purchase life insurance protection as well as benefit units in an investment fund portfolio. The price of units will depend on the investment performance of the Fund.

9. the Maturity Date (due date)

The date was agreed upon which an insurance company paid an amount of cash money.

10. Non-participating policy (a policy not included)

An insurance policy where the policy holder is not included in the profits of the company.

11. Paid-up Value (the value of the payment in advance)

This provision entitles policyholders to stop payment premium – premium at a later date after the policy earns cash value. The policy remains in force in accordance with the amount of sum assured that has diminished in value.

12. Participating Policy (a policy which included)

An insurance policy where the policy holder included in the profits of the company.

13. Policy Lapse (polis through time)

Termination of insurance as a result of this bearing does not give premium – premium.

14. the Policy Loan (a loan insurance policy)

A policyholder who need cash for a temporary period of time can apply to obtain a loan insurance policy against the value of the policy coverage. The imposition of flowers began to count on the validity of the loan policy.

15. Premium (premium)

The amount to be paid to acquire the desired insurance coverage.

16. Regular Premium Policy (regular premium policies)

A policy that requires premium payments at regular intervals, for example, monthly, every four months, every six months or yearly.

17. Reinstatement (enforcement of return)

The process in which a asuradur re-enact a polis which has elapsed time that result because it doesn't give a premium-premium updates.

18. the Rider (additional benefits)

Rider is an added benefit that can be included in a basic insurance programs, such as comprehensive insurance program (whole life plan) or program grant (endowment). This benefit is designed to provide additional financial protection and costs cheaper.

19. Single Premium Policy (policy with premium pay once)

A policy that only requires all premium payment made in advance.

20. Sum Assured (insured amount)

The amount of the security deposit that is dipertanggungkan to the policyholders.

21. Term Plan (unlimited futures program)

Program type this kind of insurance offers protection/life insurance protection for a limited period. The amount of the sum assured is payable only if the insured dies, or where can

CLASSIFICATION OFF INSURANCE

Broadly speaking, there are two types of insurance, i.e. traditional insurance and insurance of non-traditional. Let us refer to the discussion he continued.

Traditional Insurance

Understanding life insurance policy (Life Insurance Policy) according to the definition of a LOMA (Life Office Management Association) are:

"Life insurance policy (Life Insurance Policy) is a policy where the policy in insurance company promises to pay benefits on the death of the person insured/insured."

Traditional insurance also has a variety of types, each of which are described as follows:

1. Term life Insurance (Futures)

Futures only provides insurance protection within a certain period only. Protection could be the shortest Board a plane from Jakarta to Semarang for less than two hours or for 20 years. His trademark, there is a time limit of insurance protection. In addition, if a risk does not occur, the insurance money is not refunded or forfeited.

This type of insurance has the cheapest premium among other insurance. Money pertanggungannya the great, can also reach the billions with a premium that is not too drained the contents of the bag. Type of term life insurance has no cash value. If at the time of expiration of the insurance contract the insured still healthy in fine health, the contract expires and no money is given to the insured.

2. whole life Insurance (lifetime)

This insurance contains the value of the savings. The period of protection any longer, up to 99 years. This insurance is referred to as term life insurance that refinement has no cash value. But the value of the premium that must be paid to the customer also is more expensive than term life insurance.

On whole life insurance, when the contract ends and the insured is still healthy in fine health, there is the cash value provided to customers. Whole life policy cash values can be used as loan collateral and there's a bonus dividend of the company for the whole life policyholders. In addition, if you can't pay the premiums, policyholders can take withdrawals from the cash value. This feature does not exist in the type of term life insurance.

3. Insurance endowment (dwiguna)

The third is the traditional type of insurance endowment. It is kind of like insurance futures as well as savings. Form of insurance endowment. In addition to having the cash value, there are also funds issued in futures before the insurance contract expires. These funds get out regularly for example 3 years or 5 years.

For example like issuing education insurance fund when the child is aged 5 years to KINDERGARTEN entry fee, admission fee for 7 years of ELEMENTARY SCHOOL and beyond. Unfortunately, this endowment insurance premiums much more expensive compared with the futures as well as insurance premium whole life.

Non-traditional insurance

Non traditional types of insurance is only one link unit. In addition to functioning as protection, also serves as an investment. Premium money is paid partly used to pay for protection and partly placed in mutual funds in the form of unit links.

Policyholders will be asked to select in which will be placed its investments, whether in stock mutual funds, unit trusts, mutual funds or fixed income, money market.

For this type of unit link insurance is quite complex and more difficult to grasp. So that potential borrowers need to really pay attention to and examined further.

DEFENITION OF INSURANCE

Understanding Insurance
The primary function of insurance is as a mechanism to transfer risk (risk transfer mechanism), which shifted the risk of one party (the insured) to another party (the insurer). The transfer of risk is by no means eliminates the possibility of misfortune, but rather the insurer provides financial security party (financial security) and tranquility (peace of mind) for the insured. In return, the insured pay premiums in a very small amount when compared to the potential loss that may be sustained (Cambridge: 1999).

Basically, the insurance policy is a contract is a legal agreement between insurer (in this case an insurance company) by the insured, the insurer is willing to bear the party where a number of disadvantages that may arise in the future in Exchange for a payment (premium) of the insured.

According to law No. 2 of 1992, is the insurance coverage or are agreements between two or more parties, with which the insurer committing yourself on the insured, by accepting the insurance premiums to provide replacement on the insured because of the loss, damage or lost profits expected, or legal liability to third parties which may be suffered by the insured, arising from an event which is uncertain , or to provide a payment based upon his life someone who died or dipertanggungkan.

In order for a loss potential (which is probably the case) can be insured (insurable) then it must have the characteristics:

The occurrence of loss contains uncertainties,
Losses should be limited,
Losses must be significant,
The ratio of the loss can be predicted and
Not catastrophic losses (disaster) for the insurer.

There arose the question; death is inevitable, why can be insured?
Even though it is something that contains the certainties, but exactly when the death of a person residing outside the control of the person they will be. So in the wake of the events of death that really contain uncertainty which caused his insurable.

There are two forms of agreement in determining the payment amount at maturity of the insurance contract, namely: value (valued contract) and indemnitas contracts (contract of indemnity).

The contract value is where the amount of the payout has been set in advance. For example, the value of the sum assured (UP) on life insurance.

Indemnitas contract agreement number santunannya based on the amount of financial loss. For example, the cost of hospital care.

In the event an insurance company tried to suppress the possibility of fatal losses/large, then it can divert the risk to other insurance companies. This is called reinsurance; the company accepts reinsurance is named reasuradur.

In addition to the five characteristics listed above, before it can be insured, then the insurer should consider insurable interest and the selection. Insurable interest with regard to the relationship between the insured with the recipient of compensation/benefits – in the event of potential losses. For example, the insurance company will not sell fire insurance policies to the party other than the owner of the insured building.

Insurable interest in this example are the ownership of thd something is insured. Similarly, family relationships, financial linkages that reasoned, is also a form of insurable interest. Is anti selection (counter selection) refers to the existence of a greater tendency to get insurance because of the level of risk is above average. For example, people who have a record of poor health or a risk of dangerous jobs tend to want to buy insurance.

To reduce the consequences of anti selection, insurance companies should be able to identify and classify the potential risks or losses. The process of identification and classification of the level of risk that's called underwriting or risk selection. But that does not mean anti selection led to the filing of insurance denied, due to the risk of loss with the insured above the average may incur a premium sub standard (special premiums) due to the risk of sub standard (specific risks), unless the damages are likely much higher, perhaps the insurance application was denied.