Page 31 - M1_Insurance Introduction Notes

 Contract

An agreement binding at law between two or more

parties is called contract.

 Premium

The amount which is paid to the insurer by the

insured in consideration to insurance contract is

known as premium. It may be paid on monthly,

quarterly, half yearly, yearly or as agreed upon it is

the price for an insurance policy.

 Insured sum

The sum for which the risk is insured is called the

insured sum, or the policy money or the face value

of the policy. This is the maximum liability of the

insurer towards the insured.

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