Explain the following terms as used in insurance business:
(a) Surrender value
(b) Days of grace
(c) Ex-gratia payment
(d) Endorsement
(e) Disclosure.
Explanation
(a) Surrender Value: This is the sum of money that the insurance company will pay to the policy holder in the event his or her policy is voluntarily terminated before its maturity or the insured event occurs.
(b) Days of Grace: This refers to the set period after the due date of a premium payment during which a policyholder can pay without facing a lapse in coverage.
(c) Ex-gratia Payment: This is a payment made by the insurer to the insured out of grace without an admission of liability so as to maintain goodwill.
(d) Endorsement: This is a document raised by .underwriters to effect changes in the Policy as evidence of renewals, additions, alterations and cancellations.
(e) ‘Disclosure: this is a duty imposed on both parties to the insurance contract requiring them not to conceal any information that are considered material to the contract.