This document defines key insurance terminology used in risk management. It defines terms like actuary, agent, claim adjuster, coverage, deductible, insured, insurer, beneficiary, peril, hazard, insurable interest, premiums, and waiver of premium. It also provides a high-level definition of insurance, stating that insurance is a contract where the insurer agrees to pay the insured or beneficiary a predetermined sum if a specified contingency or risk occurs, in exchange for the insured paying a premium.

1. UNIT-I
RISK MANAGEMENT
By Asst. Prof. Ms. Jovelle Furtado

2. INSURANCE TERMINOLOGIES
1. Actuary A professional trained in the mathematics of insurance and risk management,
including the calculations of premiums, policy reserves and other values.
2. Agent The insurance company representative who sells policies on behalf of the insurer. An
independent agent represents more than one company; a captive agent represents only one
company.
3. Claim Adjuster The person who investigates insurance claims for losses and recommends an
effective settlement.
4. Contract Legally binding agreement between two parties who wish to exchange some sort of
consideration (anything of value, e.g. money or goods).
5. Coverage The scope of protection provided under an insurance policy.
6. Declaration Part of the insurance policy that identifies the named insured, policy period and
limit of insurance.
7. Deductible The amount of money the policyholder must pay on a loss.

3. 8. Indemnification Insurance principle which states that the insured, after a loss, should be
restored in whole or in part by payment, repair or replacement by the insurer.
9. Insured The policyholder protected in case of a loss or claim.
10. Insurer The party who pays for losses in an insurance arrangement
11. Claim a demand made by the insured or the insured’s beneficiary, for payment of the benefits
as provided by the policy.
12. Insurance beneficiary The person or entity named in a life insurance policy to receive the death
benefit. One person, Two or more people..
13. Peril A cause of loss.
14. Hazard A condition that creates or increases the chance or severity of a loss due to a peril.
15. Insurable interest Interest in property such that loss or destruction of the property could cause a
financial loss
16. Premiums – The monthly, quarterly, semi-annually or annual amount that you must pay in order
to have the insurance coverage. The price of insurance protection, paid by the policyholder to
the insurer
17. Waiver of premium Provision in some insurance contracts which enables an insurance company
to waive the collection of premiums

4. INSURANCE
■ Insurance is a Contract whereby:-
a. a certain sum is charged in consideration – Premium
b. A large amount is guaranteed to be paid by the Insurer
c. The payment is made only upon a CONTINGENCY
d. The compensation will be made in a certain predetermined sum
■ One party (Insurer) agrees to pay to the other party (Insured) or his beneficiary, a certain
sum upon a given contingency (Risk) against which insurance is proposed