Are you confused by insurance vocabulary? Do you not understand what your agent is talking about when he busts out a new word?
If this is you, your head must be spinning in confusion. After all, no one wants to pay a premium when you do not even know what it means!
Don’t worry! We’re here to help.
Read on to learn some standard insurance terms and their definitions. This way, you can feel more confident in what you’re buying.
What Is Insurance?
Insurance is a contract between you and the insurance company. The policy sets forth the insurer’s promise to pay. These events trigger coverage, the circumstances under which the insurer will pay, and the amount of money the insurer will pay.
The policy also sets forth your duties and obligations, such as paying premiums on time and telling the insurer about changes that may affect your coverage.
What Are the Most Common Insurance Terms?
Most insurance policies are in plain English. However, some contain technical language and terminology that can be difficult to understand. To best understand your insurance policy, it is necessary to familiarize yourself with insurance jargon.
It is a payment or service that an insurer provides to an insured individual or entity. They are what you are entitled to receive from the insurer if you have a covered loss.
It refers to the amount of money an insured individual or entity is responsible for paying out-of-pocket before an insurer provides coverage. The higher your deductible, the lower your premium (monthly cost) will be.
It is a situation or circumstance specifically not covered by an insurance policy. It can be due to the type of coverage, the company’s underwriting standards, or the policyholder’s circumstances.
It refers to the individual or entity that purchases an insurance policy. It means that the insurance company agrees to provide coverage to you in the event of a loss.
An insurance claim is a formal request made to an insurance company for coverage or reimbursement for a covered loss. It is made after an insured event and processed by the policyholder or their representative. Process your insurance claims fast at cmbinsurance.ca.
It is the document that outlines the terms of that contract. It is necessary to read the terms and conditions thoroughly.
The premium is the amount you pay for your insurance policy. It will depend on your age, health, and the type of coverage you select.
It is a group of doctors, hospitals, and other healthcare providers. They have agreed to provide services to patients with a particular insurance plan at a discounted rate.
It is the percentage of covered expenses that you are responsible for paying. For example, if you have a 20% co-insurance, you would pay 20%, and your insurance company would pay 80%.
It is the maximum amount of money your insurance company will pay out throughout your life. It is wise to be aware of your policy’s lifetime maximum.
Understand the Jargons
There are a lot of insurance terms out there. It can be tough to keep up with all of them.
Good thing this guide provides a brief overview of some popular insurance terms. Hopefully, it has helped you understand the jargon a little better.
And, if you have any questions, be sure to ask your insurance agent or broker. They will be happy to help you out.
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