Insurance may seem complicated at first but when you really delve down into it, you’ll realize that it’s really pretty straightforward.
In a previous article, we’ve discussed insurance terms people frequently encounter. Here, we explain five more commonly used insurance terms that’ll help you understand insurance plans better and, hopefully, get you to realize its importance and usefulness. Please note, though, that these explanations are generic. Your policy may specifically set its own definition of some of these terms.
This is the person whose life is covered by the insurance plan. Should this person dies or gets diagnosed with critical illness, a cash benefit will be given to the beneficiary.
The owner/payor of the insurance plan is the one who purchased or is paying for the plan. Most of the time, the owner and insured are the same. But there are also times when they are two different people.
This is the amount of years or period of time that you are covered by the insurance plan. Outside of this period, you will no longer be covered.
This is a health condition or problem that you have been diagnosed with, or are being treated for, before you purchased the plan. Examples of this could be asthma, diabetes, allergies, etc. Pre-existing conditions could impact your claims in the future so make sure you declare all of them.
A rider/ add-on is a feature or product that you have added to your plan, usually a benefit or feature that’s not in the original plan offered. Riders allow people to customize their plans according to their own needs.
FWD Insurance, for instance, has add-ons that provides protection against critical illness and accident. There are also waiver of premium riders for both the owner and the insured.