10 important terms to know before taking out insurance.
Hi, how are you on this Monday?
We at Prospecto thought about what we could bring of value to your life in this new post from #MondayBlog.
So today we're going to explain 10 basic terms that apply to any insurance contract that you'll benefit greatly from knowing.
Shall we?
1. Insurance
What is insurance?
It is a contract between two parties, one of which is the insured and the other the insurer. The insured can be either a company or an individual.
Insurance is a way for the insured to transfer a risk with probable financial damage to the insurer in exchange for a previously stipulated indemnity.
In Brazil, insurance is regulated by SUSEP and there are more than 89 insurance lines.
Not to mention the group of health insurances that are regulated by the ANS.
As we are talking about a contract, both parties have rights, duties and even penalties if they fail to comply with any of their obligations.
Therefore, it is very important to be aware of all the policy clauses with your broker before taking out the insurance, so as not to have any unpleasant surprises in the future,
and to guarantee your rights in the event of a claim.
2. Premium
I well remember when I got into this business and heard that word for the first time. The meaning that came to my mind had nothing to do with the real meaning of that term
in the insurance business!
Premium, dear reader, is the cost of the insured. It is the amount you will pay to transfer the risk provided for in the Contract Conditions to the insurer.
3. Deductible
Think of deductible as a mandatory policyholder participation in a claim.
The higher the deductible, the greater the participation of the insured in the risk directly, which reduces the insurer's exposure.
In the end, this translates to a lower cost on your policy, as the higher the deductible, the lower the premium to be paid.
However, only commit to higher deductibles if you really have the cash available to participate in the risk.
4. Bonus
There are some claim categories that work with bonuses and discounts for the insured. It usually starts with
Assuming that if your risk did not cause losses in the previous year, then you qualify for a bonus on renewal of insurance for that year.
5. Waiting Period
Very present in personal accident insurance, life insurance and health plans.
Waiting period is the period in which the insurance cannot be activated.
For example, you did not report that you have a health problem X, or you simply do not know that you have this problem, but from the experience of the insurance company,
It is known that a 6-month grace period is a good time to mitigate these risks, so you will not be able to deal with this problem until X, 6 months after paying for the health plan.
There are different needs for different situations, so it is always good to pay attention to this factor when taking out insurance.
6. Policy
First comes the quote, or insurance offer, which are the coverage that the insurance company can offer you for a certain cost to cover your risk.
Then comes the proposal, which is when you agree to the offer, and sign the document, or allow your broker to sign on your behalf, making a proposal to the insurer.
And finally comes the policy, when the insurer agrees to assume its risk.
The policy is the legal contract between the insured and the insurer, which will be valid until the end of the insurance period.
7. Term
It is the period of coverage established in the policy, that is, the beginning and the end of your risk coverage.
Important tip: pay close attention to the beginning and end of your insurance term, some insurers agree today, but only start covering 24 hours after that date.
8. Coverages
These are your guarantees in an insurance contract. Think of a photographic equipment kit. You can take out insurance with coverage for Theft only or insurance with full coverage, for example Theft + Fall + Water Damage + Electrical Damage, of your equipment. Therefore, coverage is what you want insurance coverage for in the event of damage or loss.
In other words, you can hire the minimum coverage of a certain insurance, or more complete coverage, everything will depend on your risk analysis.
It is important to know what you need to protect when deciding on the coverage to be contracted, so that there is no overexposure to a risk.
9. Claim
É o motivo real da existência do seguro, e o momento que ninguém quer que chegue. Sinistro é toda ocorrência prevista na apólice do seguro contratado, de natureza involuntária e imprevista que tenha gerado danos e/ou prejuízos ao segurado.
10. Indemnity
This is the amount paid by the insurer to the insured and/or the person who suffered damage by the insured. For the indemnity to be received, there is a chain of processes that need to be complied with, such as claim adjustment, documentation verification, payment of deductibles, among others. It is critical to have a competent broker on your side during this process.
What do you think? Did you like to learn a little more about the basics of insurance with Prospecto?
Taking out insurance can be a complicated process without a professional who understands how the market works and how to protect you.
Claim is really something that can live up to the name, without a tight contract.
See you next time on#MondayBlog!
Have a good week, lovers!
Prospecto Seguros
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