UPMSP Vocational Insurance key terms

A financial or legal stake in the person or property insured, such that the policyholder suffers real loss if the insured event occurs. It must exist at the start of the contract and, for property, at the time of loss.

The rule that a property or liability claim should restore the insured to roughly the same financial position as before the loss, no better and no worse. It explains why sums insured, depreciation and salvage matter in settlement.

A mutual duty on proposer and insurer to disclose all material facts honestly when the contract is formed. Breach by the proposer, such as concealing a disease or a prior claim, can let the insurer avoid the policy.

Any information that would influence a prudent insurer's decision to accept a risk or fix the premium. Examples include age, occupation, medical history, past rejections and the nature of goods stored on premises.

Failure by the proposer to reveal a material fact the insurer needed, whether deliberately or by oversight. Its consequences range from altered terms and higher premium to cancellation of the contract and rejection of a claim.

The added risk that arises from a person's honesty or behaviour rather than from physical conditions. Careless housekeeping, exaggerated claims or deliberate damage are typical signs that increase the chance of loss.

A tangible condition that raises the chance or severity of loss, such as faulty wiring, flammable stock, poor lighting or an unguarded machine. Underwriters price and sometimes inspect for these conditions.

A deliberate or unconscious decision to bear a loss oneself instead of transferring it. Small predictable losses are often retained, while deductibles and excess-of-loss layers are formal ways of retaining part of a risk.

Insurance bought by an insurer to spread part of the risk it has already accepted. It protects the insurer's solvency on large or catastrophic exposures and does not change the original insured's rights under the policy.

The amount stated in a life policy that the insurer promises to pay on death or maturity, subject to policy terms. It is fixed at proposal and is not reduced by depreciation as a property sum insured would be.

The cash amount a policyholder receives if a savings-type life policy is ended before maturity. It is usually lower than total premiums paid in the early years and grows as the policy ages.

The state in which a life policy stops providing cover because premiums were not paid within the grace period. Revival may be possible with arrears, interest and fresh evidence of health.

The policyholder's written direction naming a person to receive the policy money on the insured's death. It helps the insurer pay the right person but does not by itself override succession law.

A short window, commonly fifteen to thirty days after receiving a life or health policy, in which the buyer may cancel and get a refund after deductions. It exists to let buyers review terms without pressure.

Legal responsibility for injury, death or property damage suffered by someone other than the insured. Motor and public liability policies cover this, and motor third-party cover is compulsory in India.

The section of a motor policy that pays for repairs or replacement of the insured vehicle after accident, fire, theft or natural calamity. It applies to the vehicle itself, not to injury or damage caused to others.

A discount on the own damage premium earned for each claim-free year, usually rising up to a maximum percentage. It rewards careful driving and is normally lost when a claim is made.

The amount of each loss the insured must bear before the insurer pays. It can be compulsory, as in motor policies, or voluntary, in which case a premium discount may be allowed.

The residual value of damaged property, such as a wrecked vehicle or partly burnt stock. Insurers either take salvage into account when settling or sell it and credit the proceeds to the claim.

The insurer's right, after paying a claim, to step into the insured's shoes and recover the loss from the party responsible. It supports the indemnity principle by preventing double recovery.

A condition in property insurance that reduces the claim in proportion when the sum insured is less than the property's actual value. It penalises under-insurance and is common in fire and business policies.

Cover for goods while in transit by sea, air, rail or road, protecting against perils such as sinking, fire, piracy and jettison. Institute Cargo Clauses A, B and C define widening sets of covered risks.

A maritime rule under which all cargo owners share a loss deliberately incurred to save the ship and remaining cargo, such as jettisoning goods in a storm. The sacrifice is apportioned among the parties saved.

A partial loss suffered by one particular interest in a marine venture, such as damage to a single consignment, which that owner alone bears. It contrasts with general average, where all parties contribute.

A condition diagnosed, treated or showing symptoms before a health policy began or during its waiting period. Insurers usually exclude it for a stated number of years unless declared and accepted at underwriting.

The initial period after a health policy starts during which certain claims, such as for specified illnesses or maternity, are not payable. It protects insurers from people buying cover only when already ill.

A health insurance arrangement in which the insurer settles bills directly with a network hospital, so the insured pays little or nothing at discharge. Prior authorisation from the insurer is normally required.

A third-party administrator that processes health claims for an insurer, handling hospital authorisation, bill scrutiny and settlement. It does not itself carry the insurance risk, which remains with the insurer.

The Insurance Regulatory and Development Authority of India, the statutory regulator that licenses insurers, agents and intermediaries, sets conduct and solvency rules, and hears consumer grievances. It operates under the Insurance Regulatory and Development Authority Act, 1999.

A quasi-judicial authority that resolves complaints against insurers free of charge, within limits on claim value, where the insurer has not settled the grievance. Awards are binding on the insurer if the complainant accepts them.

The formal process a policyholder follows to complain about delay, rejection or poor service, beginning with the insurer's grievance officer and escalating to the Ombudsman or consumer forum. Insurers must acknowledge and resolve complaints within set timelines.

The transfer of a policyholder's rights under a policy to another person, either outright or as security for a loan. Insurers must be informed so that claims are paid to the correct party.

The prescribed standards of honesty, disclosure and fair dealing that a licensed insurance agent must follow. Breach can lead to penalties, cancellation of licence and loss of commission on lapsed business.

The document an insurer must supply to a prospective buyer, setting out policy terms, exclusions, benefits and premium. An agent must explain it and must not misrepresent its contents.

The remuneration an agent earns as a percentage of premium for business placed with an insurer, within rates capped by the regulator. It is usually paid on renewal premiums too, which encourages persistent service.

The structured process of assessing a client's income, dependants, liabilities and goals before recommending cover. It supports suitable advice and is a core salesmanship skill for agents and advisors.

The prescribed document in which the insured or nominee reports a loss, giving dates, circumstances and amounts. It is usually supported by evidence such as bills, police reports, medical records or death certificates.

A licensed professional appointed by the insurer to inspect damaged property and report on cause, extent and amount of loss. Their assessment guides settlement of large fire, motor and engineering claims.

The practical and personal abilities that make a candidate useful at work, including communication, teamwork, problem solving, digital literacy and time management. Vocational insurance courses assess these alongside technical knowledge.