Insurance Concepts Part 2

What is Maturity claim?

• Maturity claim is a type of claim, wherein the insured fills a maturity claim form. It is sent along with the original policy document to the insurance company before the maturity date to get timely settlement from the insurance company as post dated cheque or ECS (Electronic Clearance Service) payment on the maturity date.

What is Death claim?

• Death claim is a type of claim made by the nominee of the insured to the insurance company due to death of the insured, abiding to the policy terms and conditions.

What is Valid claim & Fradulent claim?

• An insurance company validates the authenticity and amount claimed by the insured in-order to prevent the insurer from exaggerating the claim amount  & the claim fraudulently.
• If it is a valid reason it is classified as valid claim or else it is classified as fraudulent claim, thereby if insurance suspects of fraudulence in the claim.

What do you mean by Policy not in force?

• If the policy is lapsed i.e., the insured has not paid the policy amount before the grace period expires, then it is termed as policy not in force. The insured is not covered by the policy when it is termed as policy not in force.

What is Gratuity?

• Gratuity is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company.
• According to Payments of Gratuity Act, 1972 with minimum of 5 years service during exit is eligible to minimum of 15 days from the last drawn salary for each completed service year.

What is Void & Voidable contract?

• Void contract cannot be enforced by law. It is also considered as void agreement and is not a contract et al. Any agreement which is illegal is considered as void contract.
• An agreement between two parties that can be unenforceable for a number of legal reasons like failure or mistake by a party to disclose a fact leading to breach of contract. Then the other party terms it as voidable contract. He may also continue the contract making it a valid contract, as it is decided by both parties.

What is Paid up value?

• The right to change the normal policy into paid up value is given to the insured by the insurance company, if the insured have paid premiums for minimum of three years.
• The paid policy means, after the period if the insured cannot pay premium then the policy is not cancelled but the sum assured is reduced in proportion to the number of premiums paid by the insured.

What is Terminal bonus?

• Terminal bonus is the loyalty bonus paid by the insurance company to the insured for maintaining the policy till the maturity date.
• It is the bonus paid during the time of maturity and the value is not guaranteed by disclosed during the time of policy maturity only.