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A

Accidental Death Benefit Rider**

If the policyholder dies due to an accident, this add-on gives the beneficiaries an extra payout on top of the regular life cover.

Accidental Total Permanent Disability Rider**

If an accident leaves you unable to work for life, this rider gives you a financial cushion so income loss doesn’t shake your family’s future.

Annuity

A pension plan that gives you a guaranteed income after retirement. It's like getting a steady paycheck for a few years or even for life.

Assignee

Think of this as the new owner of your policy. The person (or organization) you transfer all the rights and benefits of your life insurance to. Absolute Assignee: They’re the boss of your policy now — can change, claim, or even surrender it whenever they want.

Conditional Assignee: They get control only if certain conditions are met. If not, the policy stays under your name.

Auto-Payment

A feature that pays your bills, subscriptions, premiums etc. automatically through your bank, card, or UPI- so you never miss a payment or have those last-minute "oops" moments.

B

Balanced Funds

This fund type is a mix of stocks and bonds, designed to give you growth from equities and stability from debt. It’s a moderate-risk option that aims for steady progress over time.

Beneficiary

Your 'money goes to' list. A beneficiary is the person or group who is the rightful owner of your life insurance payout after your death.

C

Cancer Care Rider**

This riders gives you a lump sum if you’re diagnosed with cancer. It helps cover treatment costs and lost income during recovery.

Child Investment Plans

A plan designed to secure your child’s future by combining savings and life insurance for milestones like education, marriage, or starting a business.

Corpus

The total pot of money you save or invest over time to meet financial goals like retirement or buying your dream house .

Critical Illness Rider**

An extra shield you can add to your policy. If you’re diagnosed with a critical illness like cancer or a heart attack, this rider helps you cover medical costs or replace lost income while you recover.

Disclaimer: Rider is available with base product on payment of additional premium

D

Death Benefit

The core promise of life insurance, money paid to your nominee if you pass away during the policy term. It’s what keeps your family financially steady when life throws a curveball.

Debt Funds

A fund type in which the money is invested in company or government bonds. These are low risk, moderate-return options for steady growth.

Deferment Option

A feature that lets you delay your payouts so your investment grows longer giving you a bigger lump sum amount or higher income later.

Deferment Period

The waiting time between buying an annuity and starting to receive payouts. During this phase, your money stays invested and keeps growing.

Deferred Annuity Plans

A pension plan in which you invest during your working years, and get regular income after a chosen period. It’s your future paycheck plan.

Defined Benefit Plan

A pension plan usually offered by an employer, where your payout is fixed in advance based on your salary and years of service.

Defined Contribution Plan

A pension plan where you and your employer invest regularly. Your retirement fund depends on contributions and market returns. Popular DC plans in India include NPS and EPF.

Digilocker

A government-backed online platform that can be used to access, store and manage your documents like insurance papers, aadhaar, license etc.

Disability Rider**

This add-on ensures that if you become disabled (partial or total) due to an accident or illness, your insurer either waives future premiums or pays a lump sum benefit (depending on the plan). Some insurers might give income benefit too.

Discontinuation charges

The penalty your insurer takes if you stop paying premiums or cancel your policy before the lock-in period ends. It’s basically an early-exit penalty, reducing your final payout.

Discontinued Policy Fund

This is where your money is moved if you stop paying ULIP premiums within the five-year lock-in. During this time, life cover stops, but your money stays safely parked and earns a small return till your lock-in ends.

E

Early Retirement

Hitting 'quit' before the standard retirement age, either to fulfill personal goals or due to financial/health reasons.

E-Insurance Account

e-Insurance Account (EIA) is an online account that stores all your life insurance policies in one place - easy to access anytime, anywhere.

Emergency Funds

Money stashed aside for unexpected expenses like medical bills, job loss or home repairs. Your quick-fix funds for life's surprises.

Endowment Policy

A two-in-one deal, life cover + savings. If you’re around when the policy ends, you get a payout. If not, your family does. Great for long-term goals like child's education or buying a house.

Equity Funds

A fund type in which the money is invested in company shares. These are high-risk, high-return options for long-term growth.

F

FIRE

FIRE (Financial Independence, Retire Early) is about saving big, investing smart and retiring sooner than usual. Rule of thumb? Build a fund 25x your annual expenses and live off 4% yearly post retirement. The term was coined by Vicki Robin and Joe Dominguez in their book Your Money or Your Life in 1992.

Free Look Period

Your trial window after buying a policy. Don’t like what you see? Cancel within 30 days and get your money back. It’s your safety net before committing fully.

Fund Management Charges

The small 'fund care-taker' fee that insurers charge to manage your ULIP investments (capped at 1.35% yearly*).

*As per the Insurance Product regulations, 2024.

Fund Switch

The freedom to move your ULIP money across funds to boost returns or reduce market risks, all without quitting the plan.

Fund Switching Charges

A small charge you pay to shift your ULIP money between funds (like equity to debt). While many plans allow unlimited free fund switches, some offer a limited number before a fund switching charge applies.

Fund Value

The total worth of your ULIP investment i.e your units X NAV.

G

Grace Period

It’s the extra time you get after your premium due date. 15 days in case of monthly frequency and 30 days in case of quarterly, semi-annually and annually frequency. Miss this window, and your policy could lapse.

Group Term Insurance

A simple term life insurance policy that covers a group of individuals for a fixed policy duration.

Guaranteed Bonus

It is a fixed bonus promised right in your life insurance policy, not affected by market ups and downs. Think of it as your insurer saying, “No matter what, this one’s yours.”

Guaranteed Minimum Pension

A promise of a minimum pension amount under any pension schemes so your retirement income never dips below a safe level.

H

Human Life Value

Human Life Value tells you how much your life is worth in financial terms. It estimates how much money would be required to secure the lives of your dependents in case you are no longer around.

Hospital Care Rider**

This rider gives you cash support for each day of hospitalisation. It helps cover extra costs beyond your health insurance like medicines, family expenses, or income loss during recovery.

I

Immediate Annuity Plans

A retirement plan where you invest a lump sum and start receiving guaranteed income right away — perfect if you want steady cash flow from day one.

Income Tax Benefits

Life insurance premiums qualify for tax benefits as per the Income Tax Act, 1961. Whether it’s term insurance, ULIPs, endowment, money-back, or whole life plans, you can claim deductions on premiums, maturity amount, etc.

Disclaimer: Tax benefits are subject to changes in tax laws. Tax Laws are subject to change from time to time.

Increasing Sum Assured

It means your life cover increases over time to match growing needs or inflation. It comes with a small increase in premium based on your age and policy term.

Inflation Risk

When the rising prices reduce the value of your insurance benefits (like death benefit) and make premiums more expensive. For eg: Something that costs ₹1 lakh today could cost around ₹3.2 lakhs in just 20 years (assuming 6% inflation).

Insurance Claim

A formal request made by the policyholder (or their nominee) asking the insurance company to pay for a loss or incident that’s covered under the life insurance policy.

Interest Rate

The rate that shows how much your money grows or how much policy loan costs you . In life insurance, it influences both your premium amount and the returns you get from savings or pension plans.

Investment

Putting your money into assets or financial products to help it grow over time. Investments can include mutual funds, stocks, bonds, or market-linked insurance plans like ULIPs, depending on your goals and risk appetite.

IRDAI

The Insurance Regulatory and Development Authority of India (IRDAI), is the government body that keeps the insurance industry in check. Its role includes licensing insurers, setting rules and ensuring fair play in the industry.

Individual Claim Settlement Ratio

The report card of an insurance company. It shows how many claims they actually paid versus how many they received. Higher Number = More Trust. Eg., Individual Claim settlement ratio for HDFC Life is 99.68%.*

Disclaimer: *Individual death claim settlement ratio by number of policies as per audited annual statistics for FY 2024-25.

Source: https://www.hdfclife.com/term-insurance-plans/claim-settlement-ratio

J

Joint Life Annuity

A couple-friendly annuity that pays a steady income as long as either partner is alive.

Joint Life Insurance

This covers two people under one policy, giving financial support to the surviving partner if one passes away.

K

Keyman Insurance

A life insurance policy taken by a business on the life of a key employee, whose loss could affect the company’s profits. Basically, protection for the business if its star player is gone.

KYC

Know Your Customer is a mandatory process where insurers verify your identity before issuing a policy. It’s how your insurer confirms you’re really you.

L

Life Assured

The person whose life is covered under the insurance policy. If they pass away, the nominee gets the payout; if they live till maturity, benefits are paid out accordingly. It could be you or someone you want to financially protect, like a parent or spouse.

Life Expectancy

An estimate of how long someone might live on average based on age, health, lifestyle, and mortality data to set premiums and payouts.

Life Insurance

A plan that offers protection for your family and/or helps you save for future goals like buying a house, marriage, kids' education etc.

Liquid Funds

A fund type in which the money is invested in (treasury bills). These are low-risk, stable return options for quick access and short term growth.

Lock-in Period

The lock-in period in ULIP is the minimum 5-year time when you can’t touch your money, keeping your long-term goals on track.

Lump Sum Withdrawal

Take it all at once! Instead of periodic payouts, you or your nominee get the entire life insurance payout in one go.

M

Maturity Benefit

A payout you receive when your policy term ends and you’ve survived the entire duration. Reward for staying consistent!

Money-Back Policy

Life insurance that gives you money while you’re still around. You get payouts at fixed intervals, plus a final lump sum at the maturity. Perfect for those who like periodic rewards.

Mortality Charges

A part of your premium that goes to your insurer (specifically in ULIP) to provide life cover and ensuring that your family gets the sum assured if you pass away during the policy term.

Married Women’s Property Act, 1874

A policy under this Act ensures that the insurance payout goes only to the wife and/or children — fully protected from creditors or legal claims. It’s a way to keep your family’s future secure, no matter what.

Monthly Premium

A payment option where you pay your premium once every month. Helps you stay consistent with smaller, steady payments.

N

Net Asset Value

The daily price of one unit of your fund that you have invested in. Multiply it by your units, and you will know your investment’s current worth.

New Fund Offer

It’s like the grand opening of a new investment fund! During NFO, a life insurer launches a new fund in your ULIP policy.

Nominee

The person who receives the policy money if something happens to you. They act as the official point of contact for your insurer.

Non-Guaranteed Bonus

The “maybe” bonus aka revisionary or interim bonus you get only if your insurer performs well. It’s their way of saying, “We did great this year, here’s a little extra!” But remember, it’s not promised.

Non-Participating Policy

A simple, no-frills policy in which the policyholder does not share in the insurer’s profits or bonuses. Benefits are fixed as per the policy terms.

National Pension Scheme

National Pension System (NPS) is a low-cost, government-backed pension plan that helps you build your retirement corpus. You invest now, and later enjoy a lump sum plus steady monthly pension.

O

Ombudsmen

Nuetral officials that help settle disputes between the policyholders and insurance companies quickly and fairly. Claim rejection, delays, or unfair terms? They've got your back!

P

⁠Partial Withdrawal

Need cash but don’t want to end your policy? Partial withdrawals let you take out some money without surrendering the policy.

Partial Withdrawal Charges

If you take out some money from your ULIP after the lock-in period, you might pay a small fee. That’s your partial withdrawal charge.

Participating Policy

A profit-sharing policy. You get life cover plus a slice of the insurer’s profits through bonuses or dividends plus the returns that grow over time .

Pension

A fixed income you receive regularly after you retire like your salary, but for post-work life. This money is built over the years either through your own contributions, your employer’s contributions, or both, and is paid out once you hit your retirement age.

Pension Fund

A retirement piggy bank. In this plan, you or your employer invest regularly so you get a steady income for life after retirement.

Policy Administration Charges

A fixed amount or a percentage of premium that is taken out each month to keep your policy’s paperwork, accounts, and all the small admin stuff in check.

Policyholder

The boss of the policy. The one who buys it, pays premiums, names nominees, manages changes, or cancels it. They’re in control, the life assured might be themselves or someone else.

Policy Lapse

When your policy discontinues because you missed paying on time (even after the grace period). Coverage stops until you revive or renew it.

Policy Revival

Your second chance to bring a lapsed policy back to life. You can revive it within 3 to 5 years from the first missed premium by clearing the pending payments (plus interest or fees). You might need a medical check too.

Policy Surrender

When you decide to end your policy early before it matures.

Policy Surrender Charges

The fee you pay if you end your policy early before it matures.

Policy Term

Simply put, it is the duration of your life insurance policy. If the insured person passes away during this period, the nominee gets the life insurance payout.

Public Provident Fund

A trusted, government-backed savings plan known for its safety, tax benefits, and flexibility through partial withdrawals.

PRAN

Permanent Retirement Account Number (PRAN) is a unique 12-digit ID for your NPS account, letting you track contributions, returns and access retirement benefits.

Pre-Existing Disease

Health problems you already have before getting insured, say diabetes or asthma. Your plan may cover them after a waiting period or at a higher premium. But, being upfront helps avoid claim troubles later.

Premium

The money you pay to your insurer to keep your policy active. You can pay either all at once or in regular doses (monthly, quarterly, or annually). The amount depends on your sum assured, age, health and policy type.

Premium Allocation Charges

A small percentage of your premium deducted upfront to cover costs like commissions and underwriting. These charges are usually highest in the first year and reduce in later intervals.

Premium Payment Frequency

It simply means how often you pay the premium within your chosen term. It could be monthly, quarterly, half-yearly, or annually, depending on what suits your income and budget.

Premium Payment Term

How long you pay your premiums for your policy. For example, if your policy term is 20 years, you can choose to pay for all 20 years under Regular Pay. Pay only for 10 years and stay covered for 20 years under Limited Pay or make a single payment at the start under Single Pay.

Premium Redirection

Lets you send your future ULIP premiums to a different fund while keeping your old investments stay as they are. A nominal charge may apply when you redirect your premiums.

Proposal Form

You life insurance application form. It helps the insurer collect your details to assess risk and decide policy terms.

Q

Quarterly Premium

A payment option where you pay your premium once every three months. Makes paying easier with smaller, frequent payments.

Quote/Quotation

An estimate that shows the premium you’ll pay for a chosen cover amount, term, and add-ons of your life insurance policy.

R

Rate Up

When your insurer charges a higher premium because you’re seen as a higher risk. For example due to health issues, age, lifestyle habits, occupation etc.

Retirement Planning

Setting aside money today so you can enjoy financial independence when you stop working. Through retirement plans, you can build a steady income and stay protected with a life cover.

Return of Premium Rider**

If you outlive your policy term, this rider gives back all the premiums you paid (excluding taxes).

Rider**

Extra toppings aka benefits for your policy at a small cost in addition to your policy premium. They cover specific needs like accidental death, critical illness, disability, or even waive your premiums if you can’t pay due to illness.

Disclaimer: Rider can added to base product on payment of additional premium.

S

Section 80C

The tax saver* everyone loves! You can claim deduction up to ₹1.5 lakh per financial year for life insurance premiums paid for yourself, spouse, or kids under the Income Tax Act, 1961.

*Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions. Tax benefits are subject to changes in tax laws. You are requested to seek tax advice from Chartered Accountant or personal tax advisor with respect to personal tax liabilities under the Income-Tax law.

Section 80D

Premiums paid for health insurance or health-related riders with life cover can be claimed as deductions under Section 80D of the Income Tax Act, 1961 ('the Act'). The deduction is up to ₹75,000 per year subject to fulfillment of specified conditions therein.

Disclaimer: Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions and tax Laws are subject to change from time to time. You are requested to seek tax advice from Chartered Accountant or personal tax advisor with respect to personal tax liabilities under the Income-Tax law.

Smart Exit

A feature of term plans that refunds your term insurance premiums if you exit early, excluding add-ons or GST (if applicable).

Sum Assured

The guaranteed amount your family gets in case you're no longer around.

Sum at Risk

This is the portion of the life insurance payout the insurer is actually “at risk” for. It’s calculated as: Death Benefit – Fund Value. As your fund value grows over time, the insurer’s risk (this amount) keeps going down.

Surrender Value

Decided to end your policy early? You’ll get back a portion of what you’ve paid which is called the surrender value. It is calculated based on the policy type, premiums paid, bonuses earned, and after deducting surrender charges.

Survival Benefit

Money you get if you outlive a specified duration within the policy term (and not at the end like maturity benefits), usually as periodic payouts or lump sums. Great for funding milestones like college or retirement.

T

Terminal Bonus

A thank-you gift for staying loyal. It’s a one-time bonus added when your policy ends or the insured passes away, usually after being invested for a long term.

Terminal Illness Rider**

If you’re diagnosed with a serious illness and have limited time to live, this rider lets you use part of your life insurance payout early to cover medical and daily expenses.

Top-Up Premium

Extra money you can add to your plan anytime to grow your investment faster.

U

Underwriting

The insurer’s background check on you. Health, habits, age, lifestyle, finances etc. to decide your premium and coverage.

V

Vesting Age

The age when you start receiving your pension payouts. Once you reach your vesting age (say 60), you start receiving pension or annuity. It's like the moment your retirement plan unlocks.

Vesting Period

The time you need to wait in a pension or retirement plan before you start enjoying full benefits like annuity or maturity payouts.

W

Waiver of Premium Rider**

If you can’t work due to serious illness, injury, or disability, this rider helps you skip all your future premiums and keeps your policy active at the same time.

Disclaimer: Rider is available with base product on payment of additional premium.

Whole Life Insurance

A life cover that literally lasts your whole life, till age 99 or 100! It offers fixed premiums, lifelong protection, and a cash value you can dip into if needed.

Withdrawal

Withdrawal refers to taking out money from your policy’s accumulated amount before the policy term ends. In some cases, it may also refer to cancelling the policy before it is issued.

Y

Yearly Premium

Also called Annual Premium, it’s the amount you pay once a year to keep your policy active.

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