Glossary of Insurance Terms

Life Assured

The Life assured is the person whose life is insured under this insurance policy and is named in the policy schedule.

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Additional premium that is payable on a policy because the insured risk is greater than the standard risk acceptable to the insurer.

Maturity Date

This is the date at the end of the policy term, when the policy matures. Risk benefits cease and investment value becomes payable to the policy owner.

Medical Requirements

The medical evidence required by the underwriter to assess the risk involved in offering a policy and therefore the rates which must be applied.

Minimum Premium

The smallest premium an insurer will accept.

Minor

Means a person who has not attained the age of 18 years.

Misrepresentation

Failure to disclose all relevant and accurate information regarding the policy by the agent/broker; or failure to disclose all relevant and accurate conditions by the buyer, which would affect the premium rating for the policy. Misrepresentation would render the policy contract null and void.

Money Laundering

The illegal process of concealing or disguising the origins of money obtained through illicit/illegal activities.

Mortality Tables

Tables showing the probability of death based on age and based on past experience. These figures are used to calculate the risk the insurer takes, and also to calculate premiums.

NBFIRA

The Non-Bank Financial Institutions Regulatory Authority responsible for providing regulatory oversight to non-bank financial institutions in Botswana.

NTU (Not Taken Up)

Where the policy is at the underwriting stage and there are outstanding requirements. After a period of three (3) months, this policy will automatically go to NTU.

Paid-Up Option

After a policy has a cash value; the policy can be made paid-up, for a reduced benefit, to be agreed upon at the time of conversion.

Persistency

An internal measure of how ‘persistent’ the recurring premium policies are staying on the books of the company. Usually, if policies have been appropriately sold by agents and brokers, then the persistency would be high.

Policy Anniversary

The date of commencement of the assurance, and each anniversary thereof.

Policy Document

The document which describes in detail the terms and conditions of the contract between the Insurer and the Insured.

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