Insurance Policy: English Vocabulary, Phrases and Dialogue

Key words and phrases

term insurancelife insurance that pays a fixed sum to the family if the policyholder dies within a set periodHe chose a term insurance plan that lasts thirty years.

nomineethe person named to receive the insurance payoutHe named Priya as the nominee on the policy.

sum assuredthe guaranteed amount paid to the nominee under a life insurance policyHe raised his sum assured after getting married.

policy termthe number of years for which an insurance policy stays validHe selected a policy term that would cover him until retirement.

medical underwritingthe health assessment an insurer conducts before approving a policyMedical underwriting required a blood test and an ECG.

ridersoptional additional benefits added to a base insurance policyHe added a critical illness rider to his term plan.

beneficiarythe person or people who legally benefit from the insurance payoutHis parents were listed as secondary beneficiaries.

life coverthe financial protection an insurance policy provides in case of deathHe wanted enough life cover to clear the home loan if needed.

maturity benefitmoney paid back to the policyholder if they outlive the policy termPure term plans usually don't offer a maturity benefit.

premium payment modehow often premiums are paid — monthly, yearly, or as a single paymentHe chose a yearly premium payment mode for a small discount.

claim settlement ratiothe percentage of claims an insurance company successfully pays outHe picked this company partly for its high claim settlement ratio.

exclusionssituations or causes of death that a policy does not coverThe agent explained the exclusions listed in the policy document.

financial dependentsfamily members who rely on a person's incomePriya became his main financial dependent after their wedding.

income replacementthe idea of insurance covering the income a family would loseHe calculated the sum assured based on income replacement for ten years.

policy documentthe official paper or digital record detailing all policy termsHe kept a copy of the policy document with his important files.

grace periodextra time allowed to pay a missed premium without losing the policyThere's a grace period of thirty days if he misses a payment.

financial securitythe sense of safety that comes from being protected against future riskThe policy gave him a sense of financial security for his family.

Useful sentences

Ask Why should I buy term insurance if I'm healthy right now?
Answer It's meant to protect your family's finances if something unexpected happens.
Ask How is the sum assured decided?
Answer It's usually based on income replacement for your dependents over several years.
Ask Who should I name as the nominee?
Answer Usually your spouse, since they're your main financial dependent.
Ask Will there be a medical test before the policy is approved?
Answer Yes, medical underwriting is standard for most term plans.
Ask Do I get any money back if I outlive the policy?
Answer Pure term plans usually don't offer a maturity benefit, unlike some other policies.
Ask Should I add any riders to my plan?
Answer A critical illness rider is worth considering at your age.
Ask What if I miss a premium payment?
Answer You'll have a grace period before the policy is affected.
Ask How do I know which insurance company to trust?
Answer Check their claim settlement ratio — a higher number means more reliable payouts.

Dialogue

RahulNow that I'm married, I think it's time I looked into a life insurance policy.

Insurance agentGood thinking. Term insurance is usually the most affordable way to start.

RahulHow much sum assured would you recommend for someone in my position?

Insurance agentWe usually calculate it based on income replacement for your dependents.

RahulWould my wife be the nominee then?

Insurance agentYes, and you can also list a secondary beneficiary if you'd like.

RahulIs there a medical test involved before I get approved?

Insurance agentYes, standard medical underwriting — a blood test and a basic checkup.

RahulWhat happens if I miss a premium payment by accident?

Insurance agentThere's a grace period, so you won't lose your coverage right away.

Common mistakes

Saying "I take insurance" instead of "I buy an insurance policy" or "I take out a policy."
Saying "my wife is nominate" instead of "my wife is the nominee."
Saying "sum assure" instead of "sum assured."
Saying "pay premium every month" instead of "I pay the premium every month."
Saying "insurance is finish" instead of "the policy has expired" or "lapsed."
Saying "claim settle ratio" instead of "claim settlement ratio."

Quick quiz

1. What is a "nominee"?

2. What does "sum assured" mean?

3. What are "riders" in an insurance policy?

4. What is "medical underwriting"?

5. What does "claim settlement ratio" indicate?

6. What are "exclusions" in an insurance policy?

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