Here’s a helpful glossary of common insurance terminology for consumers:
### 1. **Premium**
The amount you pay for your insurance policy, typically billed monthly or annually.
### 2. **Deductible**
The amount you must pay out of pocket before your insurance coverage begins to pay for claims.
### 3. **Copayment (Copay)**
A fixed amount you pay for specific services (like doctor visits) at the time of service, with the insurance covering the rest.
### 4. **Coinsurance**
The percentage of costs you pay for covered services after you’ve met your deductible. For example, if you have 20% coinsurance, you pay 20% of the costs after the deductible is met.
### 5. **Coverage**
The amount and type of protection provided by an insurance policy. This includes specific risks or events that are insured against.
### 6. **Exclusion**
Specific conditions or circumstances that are not covered by the insurance policy.
### 7. **Limit of Liability**
The maximum amount an insurer will pay for a covered loss or claim.
### 8. **Beneficiary**
The person or entity designated to receive benefits from a life insurance policy upon the policyholder’s death.
### 9. **Underwriting**
The process by which insurers evaluate the risk of insuring an individual or asset to determine premium rates and coverage eligibility.
### 10. **Policy**
The written contract between you and the insurance company outlining the terms of coverage, rights, and responsibilities.
### 11. **Rider**
An additional provision that modifies the terms of an insurance policy, often providing extra coverage or benefits.
### 12. **Renewal**
The process of continuing an insurance policy after its term ends, often requiring payment of the premium.
### 13. **Claim**
A request made by the insured to the insurance company for payment or coverage for a loss.
### 14. **Adjuster**
A representative from the insurance company who investigates and evaluates claims to determine the amount the insurer should pay.
### 15. **Subrogation**
The process by which an insurance company seeks reimbursement from the responsible party after paying a claim to the insured.
### 16. **Grace Period**
A specified time after the premium due date during which a policyholder can make a payment without losing coverage.
### 17. **Whole Life Insurance**
A type of life insurance that provides coverage for the insured’s entire life, with a savings component that builds cash value over time.
### 18. **Term Life Insurance**
A life insurance policy that provides coverage for a specific term or period, typically with no cash value component.
### 19. **Out-of-Pocket Maximum**
The maximum amount you will pay in a policy year for covered services, after which the insurer pays 100% of covered expenses.
### 20. **Actuary**
A professional who analyzes financial risks using mathematics and statistics to help insurers determine premium rates and reserves.
### Conclusion
Understanding these terms can help you make informed decisions when purchasing insurance and managing your policies. Always feel free to ask your insurer for clarification on any terms or concepts that are unclear.
