Insurance - The Key to Knowing What You're Getting
Whether you're shopping for Car, Home, Health, Life or any Insurance - learn the lingo or you will pay too much and get the wrong coverage. Here are the more common insurance terms to help you get the right insurance.
Insurance (in general):
Deductible - Deductibles are used in auto, health and homeowners insurance to reduce the overall cost of insurance by you assuming some of the damages or expenses BEFORE the insurance company pays for the remainder. Usually you choose the amount of the deductible and the higher the amount you choose, the lower your insurance premium.
Premium - the premium is the cost of the insurance. It is how much you or your company pays for the coverage.
Property and Casualty - Property and casualty is the term for that segment of the insurance industry that pays for damage to property or for personal injury. This includes auto, home-owners and business liability insurance among other things.
Life and Health - This is the other segment of the insurance industry that does not fit under the property and casualty label.
Umbrella Policy - This is a general term implying broader coverage than a basic policy would typically offer can. For example, homeowner insurance that includes coverage for general lawsuits would be considered umbrella insurance.
Auto Insurance:
Collision - Like the name implies, this is the aspect of your car insurance that compensates for fixing damages to your car following the deductible.
Comprehensive - This term also applies to auto insurance and it is that part of your coverage that pays for "non-collision" types of losses like fire, flood, vandalism or theft.
Liability - this is the part of your coverage that pays for damage done to a third party such as bodily injury, property damage or pain and suffering. Homeowners policies also typically have liability provisions to protect you against various types of personal injury lawsuits.
No-fault - About 50% of the states have "no fault" laws which require insurance companies to pay for damages to vehicles, property and person no matter who is at fault in the accident.
Medical Insurance:
Ancillary Care/Coverage - Ancillary is just a fancy term for "additional" or "extra" or "related." It applies to comprehensive policies that for example, only cover basic health benefits but also have added (ancillary) coverage for prescription drugs or eye care, etc.
Cobra - The "Consolidated Omnibus Budget Reconciliation Act" is a Federal law that requires companies to offer extended health care coverage to terminated employees for a period of time. This coverage is typically paid for by the ex-employee but at group rates.
Co-payment - An amount much your insurance requires you to pay for each visit to the doctor's office, or for other care. The insurance company then pays the remainder of the bill assuming the deductible has been met.
Fee for Service - This is health Insurance that permits you to choose any Doctor and covers some predetermined share of "reasonable and customary" fees. You then pay the remainder.
H.M.O. - HMOs give comprehensive medical coverage for a set fee. But they require you to use their facilities and medical employees thus limiting your choice.
P.P.O. - "PPOs" are networks of physicians who offer their services at a discount negotiated by the insurance company. Thus insurers will normally pay a bigger portion of your expenses when you use these "preferred providers."
Life Insurance:
Annuity - Annuities are special types of policies that pay benefits while a person is alive for a specified period of time. They are sometimes connected to Life insurance policies.
Term Life - Term life is a form of insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.
Universal Life - A Life policy connected to an investment account and market rates. The benefits are not set but change based on the returns achieved.
Whole Life - A standard life policy that accrues cash value over the life of the policy and with preset premiums. The insurance benefit is also a set at an assured amount. - 21393
Insurance (in general):
Deductible - Deductibles are used in auto, health and homeowners insurance to reduce the overall cost of insurance by you assuming some of the damages or expenses BEFORE the insurance company pays for the remainder. Usually you choose the amount of the deductible and the higher the amount you choose, the lower your insurance premium.
Premium - the premium is the cost of the insurance. It is how much you or your company pays for the coverage.
Property and Casualty - Property and casualty is the term for that segment of the insurance industry that pays for damage to property or for personal injury. This includes auto, home-owners and business liability insurance among other things.
Life and Health - This is the other segment of the insurance industry that does not fit under the property and casualty label.
Umbrella Policy - This is a general term implying broader coverage than a basic policy would typically offer can. For example, homeowner insurance that includes coverage for general lawsuits would be considered umbrella insurance.
Auto Insurance:
Collision - Like the name implies, this is the aspect of your car insurance that compensates for fixing damages to your car following the deductible.
Comprehensive - This term also applies to auto insurance and it is that part of your coverage that pays for "non-collision" types of losses like fire, flood, vandalism or theft.
Liability - this is the part of your coverage that pays for damage done to a third party such as bodily injury, property damage or pain and suffering. Homeowners policies also typically have liability provisions to protect you against various types of personal injury lawsuits.
No-fault - About 50% of the states have "no fault" laws which require insurance companies to pay for damages to vehicles, property and person no matter who is at fault in the accident.
Medical Insurance:
Ancillary Care/Coverage - Ancillary is just a fancy term for "additional" or "extra" or "related." It applies to comprehensive policies that for example, only cover basic health benefits but also have added (ancillary) coverage for prescription drugs or eye care, etc.
Cobra - The "Consolidated Omnibus Budget Reconciliation Act" is a Federal law that requires companies to offer extended health care coverage to terminated employees for a period of time. This coverage is typically paid for by the ex-employee but at group rates.
Co-payment - An amount much your insurance requires you to pay for each visit to the doctor's office, or for other care. The insurance company then pays the remainder of the bill assuming the deductible has been met.
Fee for Service - This is health Insurance that permits you to choose any Doctor and covers some predetermined share of "reasonable and customary" fees. You then pay the remainder.
H.M.O. - HMOs give comprehensive medical coverage for a set fee. But they require you to use their facilities and medical employees thus limiting your choice.
P.P.O. - "PPOs" are networks of physicians who offer their services at a discount negotiated by the insurance company. Thus insurers will normally pay a bigger portion of your expenses when you use these "preferred providers."
Life Insurance:
Annuity - Annuities are special types of policies that pay benefits while a person is alive for a specified period of time. They are sometimes connected to Life insurance policies.
Term Life - Term life is a form of insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.
Universal Life - A Life policy connected to an investment account and market rates. The benefits are not set but change based on the returns achieved.
Whole Life - A standard life policy that accrues cash value over the life of the policy and with preset premiums. The insurance benefit is also a set at an assured amount. - 21393
About the Author:
Chris Carbukel enjoys showing people how to buy the most economical insurance for their needs. If you'd like to learn more visit his new website Insurance Price Quotes where you can learn how to get the best deals on all kinds of insurance including finding the best House Insurance Quote.
posted by X - Men @ 6:09 AM
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