The more you know about personal insurance, the better you can navigate the vast market. Expanding your personal insurance vocabulary is a great way to help you learn to access various policies.
1. Auto Insurance: Protects against losses that occur as the result of an accident or another peril occurring to your car.
Significance: Car accident losses can easily run into the 10s or 100s of thousands of dollars. Without auto insurance you could be on your own to pay these costs if you cause an accident.
2. Benefit: A payment you are entitled to from your insurance company due to the terms of your coverage for your insurance plan.
Significance: Benefits are the funds used to pay expenses you would otherwise have to pay without insurance.
3. Cancellation: Terminating an insurance policy.
Significance: You can end a policy if you no longer wish to receive insurance from your provider.
4. Claim: A notification you file with your insurance company when you have cause to use your coverage. For example, if you caused a car accident, you would file a claim with your car insurance company.
Significance: Filing claims lets the insurance company know you need to use your benefits.
5. Coverage Period: The exact duration of time your insurance plan covers you.
Significance: Coverage stops once the coverage period expires.
6. Death Benefit: A payment a life insurance company makes to a beneficiary after the insured passes away.
Significance: This sizable sum helps protect beneficiaries financially after the policyholder dies.
7. Deductible: The total amount of money a policyholder must pay out of pocket for their insured expenses before their insurance coverage starts paying them.
Significance: You are responsible for any sums owed until the deductible is satisfied.
8. Dental Insurance: A policy that covers dental care expenses.
Significance: The costs to care for your teeth can be very expensive. Dental insurance can help you afford it.
9. Disability Benefit: A payment an insurer makes to an insured disabled person as a part of disability insurance coverage.
Significance: If you ever become disabled, this provides you with some form of income.
10. Disability Insurance: Insurance protection in case you develop a disability. This can include coverage for short- or long-term disabilities.
Significance: Helps cover expenses in case you become disabled.
11. Floater: A type of policy or provision added to a policy for an extra charge to supplement property insurance to cover movable property that isn't already covered.
Significance: Extends coverage beyond what standard policies offer.
12. Flood Insurance: Protects you from property losses accrued due to floods.
Significance: Floods can be financially devastating so insurance may be a wise investment for those in flood-prone areas.
13. Health Insurance: Covers health care expenses, such as routine doctor's visits, prescriptions, surgeries and more.
Significance: Health insurance can help you pay for life-saving treatment or other important health care services.
14. Homeowners insurance: Covers homeowners in the event a peril damages their home.
Significance: Various perils can result in major losses to homes.
15. Insurance Carrier: An insurance company. There are a wide variety of carriers in a wide variety of insurance fields.
Significance: To buy an insurance policy, you must find an insurance carrier.
16. Life Insurance: Insurance that pays out a benefit upon the death of the insured to the beneficiaries.
Significance: You can purchase life insurance to help protect your family financially after you die.
17. Peril: Any event that could result in an insurance claim having to be filed. In other words, it is anything that can cause damage and result in losses.
Significance: Policies cover certain perils so you need to know what your policy does and doesn't cover to avoid costly surprises.
18. Personal Lines Insurance: Insurance that provides financial protection for various risks individuals and families need insurance protection for.
Significance: You and your family will likely need many different types of personal lines insurance.
19. Premium: A payment that must be made periodically to receive insurance coverage.
Significance: If you don't pay your premiums, coverage will stop.
20. Property Insurance: Insurance for buildings and structures as well as personal possessions.
Significance: Damage to property can be extremely expensive. Property insurance can save you from paying out such costs in their entirety.
21. Renters' Insurance: Covers the personal property of renters in the event that a peril to the building results in losses.
Significance: Even if you are renting an apartment, your personal property can still be at risk. It can pay to insure it.
22. Suspension of Coverage: A temporary hold on coverage by the insurer, typically due to a failure to comply with the contract.
Significance: If you experience a insured loss while your coverage is suspended, you cannot receive benefits.
23. Term Life Insurance: A form of life insurance that insures the policyholder for a certain amount of time or "term."
Significance: As one of main type of life insurance, it could be a wise investment for some seeking a life insurance policy at a younger age.
24. Travel Insurance: Covers losses related to traveling, such as lost baggage, trip cancellation, and more.
Significance: Travel insurance can give you some peace of mind while traveling because you will have to worry significantly less about potential travel-related financial losses.
25. Universal Life Insurance: Life insurance that covers the insurer for their entire life. The premium prices are flexible and so are the investment options.
Significance: This type of life insurance is offers an investment component lacking in term policies and can cover you for all your remaining years.