Need to Learn The Easiest Way To Find The Lowest Cost Insurance?
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.
General Terms:
Deductible – Deductibles reduce the price of insurance because you pay a predetermined amount of the loss or expense BEFORE the insurer pays. You select the deductible and the higher you choose, the lower your 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 Insurance – This is wider insurance coverage than the original fundamental policy. For instance, a householder’s insurance policy that also admits a universal liability provision of $1,000,000 for personal lawsuits may be considered an umbrella policy.
Auto Insurance:
Collision – Collision insurance covers the damages to your vehicle from a collision or accident.
Comprehensive – Comprehensive insurance covers the “non-collision” types of losses to your vehicle like fire, flood, vandalism or theft.
Liability Insurance – Liability insurance pays the losses of a third party such as personal injury, property or pain and suffering. Homeowner insurance also has liability provisions to protect you from personal injury lawsuits.
No-fault – Half of the states have no-fault insurance which pays for losses no matter who is at fault in the accident.
Medical Insurance:
Ancillary Care/Coverage – Ancillary is a term for “extra” or “additional” or “associated.” It is for insurance policies that not only cover common health benefits but also have additional (ancillary) insurance coverage for prescription medicine 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 – This is a health insurance term for how much you are required to pay for a visit to the doctor’s office, or for some other type of medical care. After your co-payment and deductibles the insurance company typically pays for the remainder of the bill.
Fee for Service – This is the type of health Insurance that allows you to select any Doctor and pays for some agreed percentage of “reasonable and customary” fees. You then end up paying the difference.
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. – “Preferred Provider Organizations” are networks of doctors who charge on a fee for service basis but typically at a discount pre-negotiated by the insurance company. Thus insurance companies will usually pay a larger share of your bill if you go to one of their “preferred providers.”
Life Insurance:
Annuity – Annuities are policies that pay while the insured is alive for a specified period of time. They are typically offered by Life insurance companies as a vehicle to supplement retirement or disability.
Term Life – Term life is a form of life insurance purchased for a specific period (term) of time. If the person dies during this period, the insurance is paid. If not, the coverage expires or must be renewed to maintain the benefit.
Universal Life – A Life policy accompanied by a savings plan tied to market rates of interest and the benefits are not fixed but can change within boundaries.
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.
