Insurance policies can be complex and not easily understood by ordinary persons, including Lesotho personal insurance plan holders. This article is meant to help consumers, including Lesotho personal insurance plan holders, understand some of the basic terminologies.
12 Common Personal Insurance Cover Terms & Meanings
1. Personal Insurance Policy – Covers an individual against personal injury or death. It also covers funeral expenses in the event of the insured person’s death or other people on the policy. It also covers the loss or damage to property and assets—for example, a house, vehicle, and other personal items.
2. Insured Sum – This is the monetary value of your insurance cover or plan. This is the maximum amount that the insurer will pay in the case of a valid claim.
3. Renewal Date/Anniversary Date – This is the start date of a personal insurance policy. On that date, every year, the policy automatically renews. It is essential for the policyholder to be aware of this date as the premiums may change.
4. Policy Beneficiary – This is the person or people you, as a policy owner, have identified to benefit and receive a payout should you die.
5. Policy Exclusions/Exceptions – These are specific things, events, and losses that the policy covers that are not covered by the personal insurance policy. Often, policyholders only find out after the event that a specific event is not covered. Be proactive and study your policy and know which events are not covered so that, where possible, you can take additional cover.
6. Extensions – These are events, things or issues that may not be included in your policy but can be included on your personal insurance as extras or add-ons at an additional cost.
7. Premium – This is the amount of money that you, as a policyholder, are required to pay monthly or annually for your personal insurance cover to remain in place.
8. Retail Value – This is often found in a vehicle insurance plan or policy. It refers to the price that the dealership sells the specific vehicle for.
9. Replacement Value – This is the cost to replace an insured item. i.e., property, appliance, etc. It is worth noting that replacement values may increase or decrease with time. Therefore, checking the replacement values of insured items annually and increasing your cover is essential.
10. Repudiation– Refers to when the insurer refuses to pay a submitted personal policy claim. It is essential for the policyholder to read their policy carefully to understand the circumstances under which claims will be rejected.
11. Policy Schedule – This is a policy document containing a policyholder’s insurance policy information. It will include your correct name and surname, physical address, the insured item or items, policy cover amount, premium amount, payment schedule, policy exclusions, excess payments, policy renewal date and other essential information.
12. Terms and Conditions/Policy Wording – These are the terms and conditions under which the insurer will honour the policy contract. The policyholder is encouraged to be proactive and read their policy to understand these terms and conditions before an incident to minimise the risk of a claim not being paid.
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