Understanding Insurance | FinSef

Confused About Insurance? Let FinSef Simplify It for You

Understanding Insurance Starts with Knowing the Basics

Insurance can feel overwhelming, especially with all the unfamiliar terms. But at FinSef, we believe that when you understand your cover, you can make better, more confident decisions.

Whether you're buying your first policy or reviewing an existing one, here are 8 essential insurance terms that everyone should know:

🛡️ Insurance

At its core, insurance is financial protection. It helps cover unexpected losses – like a car accident, medical emergency, or fire – so that you're not left facing the full cost alone. In exchange for a premium, your insurer agrees to pay out when specific risks occur.

👥 Broker

An insurance broker acts as your personal advisor – helping you compare policies from different insurers, understand the fine print, and find the best solution for your needs. FinSef is a licensed brokerage firm, which means we work for you, not the insurer.

💸 Excess

Also called a deductible, excess is the amount you pay out-of-pocket when making a claim.
Example: If your claim is P10,000 and your excess is P2,000, your insurer will pay P8,000.
Knowing your excess helps you avoid surprises when it’s time to claim.

📝 Underwriting

Underwriting is the process insurers use to decide whether to offer you cover and at what cost. It’s based on your personal or business risk factors – like age, health, claims history, or the type of property you are insuring.

💰 Sum Insured

The sum insured is the maximum amount your insurer will pay if a claim is approved. It’s important to make sure this amount reflects the actual value of the item or risk you are covering, to avoid being underinsured.

📅 Premium

Your premium is the price you pay for your insurance policy. It can be paid monthly, quarterly, or annually – and it depends on several factors like coverage limits, risk, and your claims history.

🕓 Retroactive Date

A retroactive date applies mostly to liability and professional indemnity policies. It’s the date from which your policy will cover claims – even if they are reported later. Claims arising before this date will not be covered.

⏳ Grace Period

This is a brief time window after your premium is due where your cover remains active, even if payment has not been received. It’s a buffer – but not a guarantee – so always aim to pay on time to avoid losing your coverage.