TERMINOLOGY YOU NEED TO KNOW ABOUT THE INSURANCE
What is actuary?
- It is the mathematician of insurance. He or she calculates and standardises how much insurance premium is to be paid for each risk. It meant the one that counts in Ancient Rome. Every insurance company has to employ at least one actuary in our country.
- The insurance mathematics is called the actuarial science
What is amount of accumulations (Savings Capital)?
- The insurer reserves a fund determined by some mathematical methods, over the sums of the long termed policies in his or her portfolio at the end of each year. That is, the amount derived over the premiums paid by the insured after technical deductions made and technical interest is added is called the amount of accumulations.
What are the General Conditions?
They are the conditions that are prepared by the authorised institutions of the state (T.R. Prime Ministry, Undersecretariat of Treasury) for each insurance branch and that the insurance companies have to comply with.
What is warning?
- Since premiums not paid on time may result in termination of the policy, a letter to warn the insured to pay the outstanding premiums is sent. There is an obligation to pay within 30 days following its receipt by the insured. Otherwise, the company terminates or reduces the policy.
What is Advance Loan?
- This exists in long term and cumulative insurances and describes receiving a maximum of 95% of the accumulated amount including the profit shares by the insured as loan with an annual interest rate. In case of advance loan, all the rights of the policy is reserved. The insured can continue the insurance next year by paying the advance loan interest of that year and 5% expenditure tax over this interest without paying the entire loan. The interest is defined by the insurance company freely and taken in full.
What is termination?
1. In Long term life insurances: It is the abolition of the policy in case the insured does not pay the premium debt within 30 days. Premium is not refunded in this case.
2. On short term life, health and accident insurances: The policy lapses into default if the insured does not pay the premium debt within the time period defined by the company. If the premium debt is not paid at the end of 15 days following the date of the lapse, the coverages are halted. If the debt is still not paid within 15 days following this date, the policy is cancelled without the requirement of any warning.
What is revenue?
- It is the life insurance coverage that brings profit periodically all lifelong or during the period indicated.
What is Purchase?
In life insurances where saving premium is received, it is the purchase of the policy by the insurance company with the demand from the insured by paying the accumulated amount with the profit shares after the minimum period written in the specific conditions of the policy has passes and the premiums that belonged to this period are paid.
It is the encashment of the policy for the insured.
What is the Profit Share Amount?
- It is the amount of the profit of the premiums paid by the insured derived as a result of being channelled into investment after making the legal and technical deductions, processed into the policy.
What is the beneficiary?
- In life insurances, it is the person (although not a party in the policy) that the rights stated in the policy are going to be paid in case that the risk of loss of life (death) happens. If the beneficiary is not stated in the policy by name, legal successors are accepted as beneficiaries...
What is validity?
- It is the state of the policy to be valid and effective.
What are the Specific Conditions?
They are the articles of the contracts that include the specific conditions of the policy developed by the insurance companies and that does not contain provisions against the general conditions.
What is Policy?
It is the written document of the agreement that includes the descriptive information of the insured goods or assets, starting and end date of the insurance, amount of the premiums and coverages to be paid, etc.
What is Premium?
It is the price paid by the insured. This price includes components such as the coverage of the insurance risk, administrative costs, commissions, profits
What is reassurance?
- It is the sale of some or all of the risks bought by the policy holders whom an insurance company sold policy to, to another company.
- In a simpler terms, it is the insurance of an insurance company.
What is Risk?
It is the case of possibility that a damage or harm may emerge.
What is Insurance?
It is the agreement where people transfer their risks in order to protect themselves from the results of the incidents that they will come across under some conditions, that lead to damage and loss of income in exchange for a certain premium.
What is Period of Insurance?
It is the effective period of the policy. In some of the cumulative life policies the insurance period is not fixed but there are maximum and minimum periods. In some, there are insurance periods defined while the agreement is being prepared with the insured.
What is Insurer?
- It is the institution that undertakes paying an indemnity to the insured or the defined beneficiary in exchange of the premiums paid by the insured in case the risk is realised.
What is Insured?
- It is the person whose life or health expenses are taken under guarantee with the insurance.
What is the policy holder?
- It is the person who makes the insurance agreement with the insurer and undertakes the responsibility of paying premium. Policy holder and insured can be the same person.
What is exception?
- They are the cases outside the scope of the coverages of the insurance.
What is indemnity?
According to the type of the policy, health expenses or total amount that must be paid to the insured in cases of disability or critical illness or to beneficiaries in case of the death of the insured.
What is Technical Interest?
- It is the minimum interest rate used for life policies and guaranteed by the insurer.
What is Coverage?
- It is the warranty given by the insurer to the insured in case of the realisation of the risk.
What is Reduction (Abridgement)?
- It is the suspension of the payment of premium after the maximum period written in the specific conditions of the policy in long term insurances has passes and premium payments that belonged that far were paid, then continuation of receiving only the profit share over the saving amount without benefiting from the insured rights of indemnification such as in case of death, disability or critical illness.
What are Medical Tests?
- They are the medical reports required by the insurer depending on the age of the insured and the amount of coverage that he or she requests. What is Underwriting (Risk Acceptance)? - It is the process during when whether the insurer would accept the application and if it does, under which conditions that it would be accepted are defined.
What is Addendum?
- It is the additional insurance agreement that defines the change that occurred during the time the policy was effective and which is considered as an inseparable part of the policy. For instance, besides changes such as premium increase in life policies and adding children to the family policy in health policies, adjustments upon the request of the insured are processes that require issuing an addendum.