IC-38 General flashcards
IC-38 General · Build recall with a focused review session.
33 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Pure risk
- A risk with only the possibility of loss or no loss, never gain. It is insurable because outcomes are measurable and accidental.
- Insurable interest
- A financial relationship in which the insured benefits from the continued existence of the subject matter and suffers loss if it is damaged.
- Utmost good faith
- The duty on both parties to disclose all material facts relevant to the risk, allowing the insurer to assess and price it fairly.
- Proximate cause
- The dominant and effective cause of a loss. Insurance liability depends on whether this cause is a covered peril.
- Subrogation
- After paying a claim, the insurer acquires the insured's right to recover the loss from a negligent third party, limited to the amount paid.
- Contribution
- The principle that multiple insurers covering the same loss on the same interest share it rateably, so no insurer pays more than its share.
- Term insurance
- A life policy paying the sum assured only if death occurs during the chosen term. It has no maturity value and the lowest premium.
- Endowment policy
- A life policy paying the sum assured on death during the term or on survival to maturity, whichever occurs first.
- ULIP
- A unit-linked insurance plan where part of the premium buys life cover and the rest is invested in funds, with returns linked to net asset value.
- Annuity
- A contract converting a lump sum into periodic income for a fixed period or lifetime, managing the risk of outliving savings.
- No-claim bonus
- A motor premium discount earned for each claim-free year, rising to a maximum, and forfeited when a claim is made.
- Average clause
- A claims rule reducing payment proportionally when the sum insured is less than the value at risk: (sum insured ÷ value at risk) × loss.
- Deductible or excess
- The first portion of each loss borne by the insured, reducing small claims and lowering the premium payable.
- Reinsurance
- Insurance purchased by an insurer to transfer part of its risk to a reinsurer, protecting solvency and enabling larger risks.
- IRDAI
- The Insurance Regulatory and Development Authority of India, which licenses insurers and intermediaries and regulates conduct, solvency, and products.
- Rebating
- Offering part of an agent's commission or another inducement to a client to win business. It is prohibited by regulation.
- Section 80C
- The Income Tax Act provision allowing deduction for specified investments including life insurance premiums, within an overall annual ceiling.
- Section 80D
- The Income Tax Act provision allowing deduction for health insurance premiums and preventive health check-ups, with higher limits for senior citizens.
- Free-look period
- The specified days after receiving a policy during which the policyholder may return it for a refund, subject to permitted deductions.
- Endorsement
- A written amendment to a policy changing details such as sum insured, address, or vehicle information. It must be authorised by the insurer.
- Bancassurance
- Distribution of insurance products through bank branches, where the bank acts as a corporate agent and must disclose the arrangement.
- Insurance penetration
- Total insurance premium expressed as a percentage of the country's gross domestic product, a standard measure of market development.
- Solvency margin
- The excess of an insurer's assets over its liabilities, maintained at the prescribed ratio to protect policyholders against insolvency.
- Loss ratio
- Incurred claims divided by earned premium. It shows the proportion of premium consumed by claims before expenses.
- Combined ratio
- The sum of the loss ratio and expense ratio. A value below 100 percent indicates an underwriting profit.
- Human life value
- The present value of the income a person would earn and contribute to dependants over their remaining working life.
- Surveyor
- A licensed professional appointed by the insurer to assess the cause and extent of a loss and recommend claim admissibility.
- Salvage
- The residual value of damaged property. The insurer may take it or deduct its value when settling a total loss.
- Persistency
- The proportion of policies retained in force over time. It reflects the quality of advice and service and affects agent evaluation.
- Moral hazard
- The risk that an insured may behave dishonestly or carelessly because insurance exists, increasing the chance or size of a claim.
- COPE factors
- Construction, occupancy, protection, and exposure. These four factors guide property underwriting and fire rating.
- General average
- A marine principle where losses voluntarily incurred to save the ship and cargo are shared proportionally among all parties.
- Cashless facility
- A health insurance service where the insurer settles hospital bills directly with a network hospital, so the insured pays only non-covered costs.