Definition - What does Benefit mean?

A benefit is a payout or other form of compensation or reimbursement that an insurance company owes to a policyholder when the policyholder experiences a covered loss. Whether or not a loss is covered is determined by the terms of the specific policy that the policyholder bought from the insurer.

Insuranceopedia explains Benefit

Different types of insurance provide benefits for different types of losses. For example, health insurance provides benefits for losses related to medical treatment when one experiences a health problem. Life insurance provides benefits for the death of the policyholder to his or her named beneficiaries. Business insurance provides benefits for losses related to a business. In general, the higher a policyholder pays in premiums, the more benefits he or she can get from the insurance policy.

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