• A Glossary of Insurance Terminology used in the UAE

    All the answers about Insurance

    If you are planning on opting for Insurance to protect yourself and your belongings, you need to understand the terms related to insurance in order to be understand and choose the right product.

    Car Insurance

    Given below are the terms related to car insurance.

    Actual Cash Value - Actual Cash Value defines the repayment value of the car due to loss or damage to the car. The cost is calculated after subtracting the depreciation.

    Accident Insurance - Accident Insurance is a cover provided under Car insurance for unforeseen bodily injury one might incur from an accident.

    Accidental Death and Dismemberment - This is a cover that offers to pay a benefit in case of death or dismemberment caused by an accident.

    Bodily Injury Liability Cover - This is a car insurance cover that pays for the injuries incurred by the people involved in an accident where the insured is directly liable for the accident. The cover usually includes medical expenses, legal defence costs and other costs that might be incurred from the accident.

    Comprehensive Cover - Comprehensive cover is the cover offered by the policy which will pay for the damage of your insured vehicle. The cover will pay for damage incurred from theft, vandalism or flood.

    Collision Cover - This will pay for the damage of your insured vehicle when it collides with another vehicle. Exclusions may apply with Collision cover.

    Claim - Claim in case of Car Insurance is a request made by the insured to the insurance company to cover a loss incurred by the insured car.

    Deductible - Deductible defines the amount that the insured has to pay for the losses incurred before the insurance provider pays up for the claim made.

    Exclusions - Exclusions include all that is not covered under the car insurance policy.

    Extended Coverage - It is a clause added to the policy to offer cover for certain things which is not already covered by the policy.

    Free Look Period - This is the time frame given to the insured to cancel their car insurance policy if they are not happy or satisfied with it. Most of the banks offer a free look period of somewhere between 15-30 days.

    Health Insurance

    Health Insurance offers cover against medical expenses that one might face due to medical emergencies. Given below are the health insurance terms you need to be aware of.

    Accumulation Period -This is the time period during which the insured incurs medical expenses that are covered by the policy. These medical expenses should be eligible for a deductible

    Actual Charge -The total amount charged by the doctor or medical provider for the medical services provided to the insured.

    Ambulatory Patient Service - Any health care you can get without staying in a hospital is ambulatory care. That includes diagnostic tests, treatments, or rehab visits.

    Balance Billing - This defines the amount that the insured has to pay for from his pockets. This includes expenses from medical service received from an out of network provider.

    Benefits - benefit defines any medical service received that is covered by the health insurance plan.

    Benefit Rider -This term defines the additional products that are purchased in conjunction with the health insurance policy.

    Cover - This defines the services that is covered by the health insurance plan. Some health insurance plans offer additional cover.

    Coinsurance-Coinsurance is an arrangement between the insured and the insurance provider wherein the insured will agree to pay a certain amount of the medical expenses after the payment of deductibles.

    Co-payment - In co-payment, the insured pays a certain amount as out of pocket expenses for certain health care expenses.

    Discount - Many health insurance policies offer discounts on the premium to be paid. The discount is usually offered in cases where the family is covered too.

    Exclusions - Exclusions usually cover all the services that are not covered under the health insurance policy. This might include services for critical illness, dental procedures, cosmetic surgeries and more.

    Grace period - Grace period is the period of time granted for the insured after the due date for the payment of premium.

    In network - This refers to the health care providers that are part of a health insurance provider’s network.

    Maximum Outpatient Costs - This is the maximum amount the insured will pay as co-payment in case of being treated as an outpatient.

    Outpatient Care - This refers to the health care service or treatment received by the insured from a hospital without staying at the hospital overnight.

    Riders - Riders are additional options and benefit that are provided along with the health insurance policy to increase the cover of the policy.

    Secondary Care - Secondary care refers to the treatment received by the specialist in a hospital.

    Home Insurance

    Home insurance protects the homeowner from paying up for the costs incurred from damage to the house of theft.

    Actual Cash Value - Actual cash value refers to the value of the property before any loss or damage.

    Act of God - Act of God refers to anything that causes damage or loss to your insured house that is beyond human control.

    Additional Living Expenses - Additional living expenses in case of home insurance refers to the expenses incurred by you and your family when you have to live away from your home due to the damage and loss caused to your home.

    Blanket Policy - Blanket policy offers cover for more than one property.

    Casualty Insurance - Casualty insurance clause offers cover when you or your family member cause damage to your insured property.

    First Party Claim - First party claim is when the insured sues the insurance company for not paying up for a claim that the insured believes was covered under the policy.

    Flood Insurance - Flood insurance offers cover for your property for the damage and loss caused to it because of a natural calamity like a flood.

    Liability Insurance - Liability insurance offers cover for the damage caused to someone else’s property by the home owner of the insured property.

    Market Value - The market value refers to the value of your property in the market at that time.

    Mortgage Clause - It is an agreement with the insurance company that deals with various mortgage scenarios.

    Partial Loss - Partial loss is when there is partial damage to the property insured.

    Replacement value - Replacement value cover offers to replace belongings of your house that was damaged or lost in case of an event.

    Life Insurance

    Life insurance ensures that you and your family stay protected against unforeseen events in life.

    Life Insurance Premium - Life Insurance premium refers to the amount that needs to be paid by the insured in order to maintain and continue the life insurance policy.

    Life Insurance Cover - Life insurance cover refers to the cover offered by the life insurance policy.

    Accident Benefit - Accident benefit is an additional benefit provided by most life insurance policies that cover any loss or damage incurred by accident.

    Beneficiary - Beneficiary is the person nominated to receive the benefits of the policy in case of death of the insured.

    Deferment Period - This refers to the time frame between the date of subscription till the first date the pension was received. This usually applies in case of insurance cum pension policy.

    Endowment Policy - Based on the insured’s age at the entry, they have to pay an annual premium and the insured amount will be paid at maturity or death depending on whichever is earlier.

    Family Insurance - Family insurance covers the family members of the insured under certain conditions.

    Maturity - Maturity of a life insurance policy refers to the date at which the policy matures considering the insured survives the policy.

    Surrender Value - This refers to the amount that is paid to the insured if they choose to surrender the life insurance policy.

    Travel Insurance

    Travel insurance offers cover to the expenses incurred due to the obstacles faced while traveling.

    Baggage Loss - Baggage loss refers to the part of travel insurance that covers the loss of baggage while on the move.

    Cancelled Trip Charges - Travel insurance pays up for the charges incurred from any cancelled trips, this also includes charges incurred from cancelled flights.

    Economy Fare - Economy rate refers to the lowest rate for an economy ticket.

    Maximum Benefit - Maximum benefit refers to the maximum amount provided in the form of travel insurance cover.

    Emergency Evacuation - This provides cover of medical evacuation of the policy holder to a medical facility in their home country.

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