1. Sum Assured:
The sum assured is the guaranteed amount that the policy-holder will receive in case of death/permanent disability.
Riders are additional features to enhance the scope and benefits of a life insurance policy.
For instance, in addition to life coverage, a subscriber can avail of riders like accidental death benefit rider and accidental permanent disability benefit rider which might help the policyholder get a claim in case of death in an accident.
Riders are beneficial for policyholders because there is no need to again purchase a separate policy for particular purposes.
To be eligible for bonuses, the policy should be participating in nature. It enables the policyholder to share the profits of the insurance company. It is also known as a “with-profit policy”.
Bonuses declared every year depends on the profitability of the insurance company, it is not fixed in nature.
4. Life Insured & Nominee:
Life insured is the person whose life is covered by the insurance company
The nominee is the legal heir of policyholder, who is entitled to receive the proceeds from the insurance company
5. Free–look period:
The Free-look period is a time period during which you can return the policy if you are not satisfied with what you wanted.
The Freelook period is generally 30 days from the date of receipt of the policy.
But there is a caveat attached by insurance companies while returning the premium paid (including taxes),
Proportionate risk premium (including taxes) and
Expenses incurred during medical examination (if any) and stamp duty
are deducted and all rights and benefits will now be extinguished
6. Surrender charges:
If a policy-holder for some reason does not want to continue its policy, it can be surrendered by paying a surrender charge.
7. Claim Settlement Ratio:
The claim settlement ratio (CSR) is the percentage of claims the insurer has paid out during a financial year.
For instance, if the death claim settlement ratio of an insurer is 95 percent, it means that the insurer has settled 95 death insurance claims out of every 100 insurance claims received.
"Higher the claim settlement ratio, better it is for policy-holders because it indicates the insurer's commitment to its policy-holders. Hence, a higher claim ratio is one of the parameters for a policy-holder to consider buying a policy from a particular company.