Definition - What does Escrow Account mean?
An escrow account is an account that one deposits money into in order to be used for a specific purpose at a later date. In the context of insurance, a person may use an escrow account to put money into which can be used to pay insurance premiums. The account holder may give the bank permission to take money from the account to put towards the premiums.
Insuranceopedia explains Escrow Account
Escrow accounts can also be used for insurance settlements. In such cases, a certain amount of money can be placed into an escrow account by the insurer until the exact dollar figure for the settlement is determined and processed. Then, the money can be paid out to the policyholder or beneficiary of the insurance policy. Escrow accounts essentially are a temporary safe place to put money that is designated for a certain use or purpose.