Insurance Glossary
Understand your insurance policy before you commit. Our glossary is the perfect resource for learning more about insurance and getting familiar with common insurance terminology.
Adjuster
An insurance company representative who appraises damages and liabilities after a claim is submitted.
Annuity
A policy that provides income payments at regular intervals for a specified period of time or for the life of the policyholder.
Beneficiary
The person who gets the insurance proceeds outlined in a policy upon the death of the insured inh2idual.
Benefit
The sum payable by the insurance company to the designated beneficiary.
Claim
A request for the payment of benefits as outlined in an insurance policy.
Coinsurance/CoPay
A provision in a health insurance contract. Coinsurance means you and your insurer share, in a specific ratio, the covered expenses outlined in your policy. For example, the policy may stipulate that the insurer pays 75% of covered medical expenses, while you pay the remaining 25%.
Coverage
The scope of protection provided under the terms of an insurance policy.
Coverage–collision
Pays for your repairs if your vehicle gets damaged in a traffic accident.
Coverage–comprehensive
Pays for your repairs if your property (vehicle or home) sustains damages from an unexpected and unavoidable hazard, such as theft, fire, or vandalism – even falling objects.
Coverage–liability
Covers the costs associated with damages and injuries caused to another person or another person’s property after an accident. Liability coverage pays for third-party medical bills, rehabilitation, lost wages, legal fees, and other expenses up to the limit stated in the policy. Also called third-party liability coverage.
Critical illness insurance
A health insurance product that provides a lump-sum payment upon the first diagnosis of a disease previously named in the policy.
Deductible
The amount of money you pay towards your own claims before your insurer covers the rest.
Deferred annuity
Provides income that’s scheduled to be paid in the future.
Exclusions
Losses or damages that are specifically not covered by an insurance policy.
Extended health care insurance
A health insurance policy that provides benefits, such as hospital, medical, and prescription drug expenses, that aren’t covered by government programs. Some policies are extensive and cover medical equipment purchases, ambulance fees, and private nursing expenses.
Face amount
The amount to be paid upon your death or upon maturity of the life insurance policy. Also referred to “sum insured.”
Grace period
In life insurance, a period of time during which you can still pay an overdue payment without penalty. The policy remains in full force throughout this period.
Group insurance
Insurance policy that provides coverage to multiple people under one contract.
Hospital insurance
A policy providing specific benefits relating to prescribed hospital expenses, especially those not covered by government plans.
Lapsed policy
A policy that’s no longer valid due to missed premium payments.
Long-term care insurance
Financial protection for people who become incapacitated due to chronic illness, disability, or mental impairment.
Non-cancellable
A policy that cannot be terminated by the insurer unless you miss premium payments or commit fraud. Policies generally specify, at the time of purchase, the length of time the coverage is non-cancellable.
No-fault insurance
Type of policy that allows you to claim benefits from your own insurer regardless of which party is at fault in an accident.
Paid-up insurance
Type of life insurance plan that requires you to pay all premiums in full.
Permanent life insurance
A life insurance policy that doesn’t expire. Permanent life insurance usually combines a death benefit with a savings portion.
Policy
A legally binding contract that outlines the insurance coverage, plus the terms and conditions, between you and your insurer.
Premium
The cost of your insurance policy. Premiums are usually, but not always, paid in pre-determined installments.
Reinstatement
The restoration of an insurance policy after it has been cancelled.
Renewal
The continuation of an insurance policy beyond its original term, sometimes automatically.
Segregated fund
An investment pool held separately from the general funds of your life insurance company and from other similar funds. The benefits of segregated fund policies rise or fall with the market value of the investments in the fund.
Settlement options
The various ways, beyond an immediate cash payment, that your benefits can be paid to you.
Term insurance
A type of life insurance policy that provides insurance coverage for a pre-determined period of time beyond which the policy is terminated.
Term 100
A term life insurance policy that covers you until the age of 100.
Third-party liability
Coverage which insures against damages to someone else’s property or person, as well legal fees, court costs and civil judgements resulting from these damages.
Umbrella coverage
Provides additional coverage above the limits of standard home and auto insurance policies. Umbrella coverage protects you against a broader spectrum of damages than regular insurance does.
Universal life insurance
A type of life insurance plan that allows you to adjust the premium and death benefit amount as you wish.
Whole life insurance
Insurance policy that charges a premium that stays the same for the duration of your life. Whole life insurance also pays a benefit that stays constant, no matter when you die.
Variable life insurance
Life insurance policy that allows you to allocate a certain portion of your premium towards investments like stocks and bonds. The value of these accounts and, ultimately, of the death benefit, will rise and fall with the performance of these securities.
