Glossary
Insurance Indemnity (Payout, Compensation)
Insurance compensation (insurance indemnity) — the monetary amount that the insurer pays to the insured, a third-party beneficiary, or the harmed party upon the occurrence of an insured event, with the purpose of compensating for the incurred losses within the agreed insurance coverage. In property insurance, the amount of insurance compensation cannot exceed the value of the loss at the time the insured event occurs.
Insurance Intermediation
Activities involving the provision of services related to the offering, consulting, preparation, and conclusion of insurance contracts, as well as assisting in their management and execution, including upon the occurrence of an insured event.
Insurance Policy
A document containing the details of the insurer and the insured, information about the insured object, the insurance coverage, the sum insured, and the premium. It specifies the territorial scope, the duration, and the start date of the insurance, as well as other parameters depending on the type of insurance product. In everyday language, it is used as a synonym for “insurance.”
Insurance Premium
The amount the insured is obliged to pay to the insurer under the insurance contract as compensation for the risk assumed by the insurer and the insurance coverage provided. The premium may be a one-time payment or periodic (e.g. monthly, quarterly, yearly), depending on the terms of the contract.
Insurance Risk
The risk that an event covered by an insurance policy may occur, obliging the insurer to pay compensation or cover a loss in accordance with the contract. Key characteristics of insurance risk are that it must be possible but uncertain, unpredictable, measurable, and independent of the insured’s will. Insurers use statistical and actuarial models to assess the likelihood of such a risk and determine the insurance premium accordingly.
Insured Event
A future, uncertain event, beyond the control of the parties, the occurrence of which gives rise to the insurer’s obligation to provide the agreed insurance coverage, usually in the form of payment of compensation or the sum insured. The insured event must be specified in the insurance contract and represents the realization of a risk covered by the insurer.
Insured Length of Service
The period during which a person has been mandatorily or voluntarily insured, and for which social security contributions have been paid or are due in accordance with the applicable legislation.
Insured Person
A person whose life, health, property, or liability is the subject of insurance coverage under an insurance contract. This person may be the same as the policyholder (the person who concludes the contract) or a third party specified in the policy. The insured person is the party whose risk the insurer undertakes to cover, and in case of an insured event, they or another entitled beneficiary may receive compensation or other agreed assistance.
Insurer
A duly licensed company or cooperative that carries out insurance activities in accordance with the applicable legislation. This includes domestic insurance undertakings (joint-stock companies and mutual insurance cooperatives), as well as foreign insurers operating in the country through a branch or under the conditions of the freedoms established within the EU.
Interest
The cost of using borrowed money or financial resources, usually expressed as a percentage of the principal over a specified period. It represents income for the lender and an expense for the borrower, and may apply to loans, deposits, bonds, or other financial instruments.
Partners
