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assured in effect pays a lower contribution for his/her

income tax liability than he/she would have to pay

otherwise. Even corporates get tax relief for health

insurance premium paid to insure their workforce.

8. Common Terms in Insurance

We now should cover some purely academic aspects of insurance

as these technical terms are universally adopted and will be

used again and again as we go further in this course and we

should be well versed in the same.

 Insured

The individual or the party who seeks protection against a

specified risk and is entitled to receive payment from the

insurer in the event of occurrence of specified event is known

as insured. An insured is normally the insurance policy holder.

 Insurer

The party who promises to pay indemnity to the insured on

the occurrence of a specified contingency is known as insurer.

The insurer is the insurance company.

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