Terminologies

1. Partial Withdrawl :- Unit Policies provide flexibility to its

policyholders to “partially” withdraw some amount of
money from his own accumulated fund value before the
policy tenure is over. Thus, the policyholder gets to
withdraw some amount of his own money from the fund
that he had otherwise accumulated for the policy tenure.
He will not be allowed to withdraw the whole amount
from the fund without surrendering the policy.

2. Surrender Value :- It is the amount the policyholder will

get from the life insurance company if he decides to exit
the policy before maturity. A mid-term surrender would
result in the policyholder getting a sum of what has been
allocated towards savings and the earnings thereon. From
this will be deducted a surrender charge, which varies
from policy to policy.

3. Beneficiary :- A beneficiary is any person who gaims an

advantage and profits from something. In the financial
world, a beneficiary typically refers to someone who is
eligible to receive distributions from a trust, will or life
insurance policy. Beneficiaries are either named
specifically in these documents or have met the
 stipulations that make them eligible for whatever
distribution is specified.

4. Nominee :- A nominee is appointed by the policyholder

and can be anyone to whom the policyholder wants the
financial benefits to accrue, in case of his/her death
during policy tenure. General practice is to appoint
spouse, children, or parents as the nominee.

5. Assignment :- An assignment is the transfer of an

individual rights or property to another person or
business. This concept exists in a variety of business
transactions .For investors & traders the most prominent
example occurs when an option contract is assigned, the
option writer has an obligation to complete the
requirements of the contract. But there are other type of
business transactions known as assignments.

6. Renewal Premium :- Renewal Premium are the

subsequent premiums that are paid by the insured to the
insurer in order to keep the policy in operation and avail
the benefits of the policy accordingly. If the policy holder
fails, to pay the premiums, then his policy lapses after a
grace period. The renewal premiums are paid after the
 initial premium and are indispensable for the continuation
of the policy.

7. Terminal Bonus :- Terminal Bonus is also known as

persistency bonus which is paid once,i.e. at the time of
maturity of the policy. It is sort of loyalty bonus given to a
policyholder for maintaining the policy till maturity. Its
value is not guaranteed and will be disclosed only at the
time of policy maturity.

8. Accrued Bonus :- A Bonus expense should be accrued

whenever there is an expectation that the financial or
operational performance of a company at least equals the
performance levels required in any active bonus plans.
Accrue no expense at all until there is reasonable
probability that bonus will be achieved.

9. Reversionary Bonus :- Reversionary bonuses are during

the life of the policy . eg every year a bonus may be
granted. Once granted it becomes guaranteed,i.e. it can’t
be taken back. If you regularly grant reversionary
bonuses, you can make customers happy- nice to get a
statement saying your benefits has increased.
10. Life Assured :- Life Assured or Insured is the person
whose life is covered in the insurance contract. In the
event of contingency , the insured can claim the amount
or the event of the death os the assured, the nominee will
receive the insurance amount.

11. Allocation Charges :- An allocation charges is a perc

entage of an investor cash or capital outlay that goes
towards a financial investment. The allocation rate most
often refers to the amount of capital invested in a product
net of any fees that may be incurred through the
investment transaction.