Glossary of Insurance Terms

Disability

A physical or mental condition that makes an insured person incapable of performing one or more duties of his/her occupation. Such disability may be partial, temporary, or total.

Effective Date

Means the date on which any such policy is entered into or varied.

Endorsement

Any alteration, amendment or other condition affecting the clauses and conditions of a policy. All endorsements must be written on the policy document and be properly dated and signed by the life insured, and by an authorised person of the assurer.

Ex Gratia Payments

This occurs when the assurer is not legally obliged to pay a claim, but does so for commercial/moral obligations.

Exclusions

Causes of death or injury for which the insurer will not pay the benefits.

Fit & Proper Requirements

Means the necessary qualities and traits that will allow a controller, director, manager, principal officer or significant shareholder to perform the duties and responsibilities of his or her position with the insurer, insurance broker or insurance agent.

Funeral Insurance

Low level of life insurance that can be used to pay for funeral expenses. There is usually no medical underwriting for this type of product and benefits are paid within a very short time after claim is submitted.

Group Life Assurance

Life assurance issued to a group of persons with related interests; for example, working for the same company.

Initial Cover

The initial sum assured provided by this insurance contract.

Insurable Interest

This is the financial interest that the applicant has in the life to be insured. Obviously, a person has financial, and thus insurable interest in his own life. Other insurable interests are: life of a spouse, life of a relative, life of a debtor, life of a partner, etc.

Insurance Agency

An entity, licensed to solicit applications for insurance for an insurer and submits the business to the insurer. The entity is licensed to only solicit applications for one (1) insurer.

Insurance Transaction

Means the entering into or termination of a policy and includes variations resulting in a change to the premium, benefits or the term of a policy excluding any contractually pre-determined or determinable variation.

Investment Value

The value of the units purchased under a policy. Calculated as the number of units multiplied by the current unit price.

KYC

Means Know Your Customer.

Lapse

Cancellation of a policy by the life insurer as a result of non payment of premium by the premium payer.

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