Discover a clear glossary of insurance terms, including cash value, pre-existing condition, premium holiday, and more.
An insurance policy is an agreement of insurance coverage that is consensual (involving mutual agreement) and must be made in writing in a deed between the parties entering into the agreement. The written deed is referred to as a "policy" or, in Islamic insurance, an "akad." The insurance policy outlines the rights and obligations of both parties, the amount of premium, and the extent of claims to be compensated if a risk occurs.