Basic Vocabulary for Insurance

Front

Purpose of Insurance

Back

Transfer financial risk from individual to insurance company

Front

Claim

Back

Formal request from policyholder to insurance company to cover for a loss or damage.

Front

Insurance

Back

Contract between policyholder and insurance company that offers full or partial compensation for a loss or damage for a covered event.

Front

Premium

Back

Money paid by the policyholder TO the insurance company for the CONTRACT between the policyholder and insurance company.

Money to have insurance.

Front

Basic "process" of insurance

Back

Pay a premium for contract

Life happens...there is "an event"

File a claim

Loss is covered

Front

Deductible

Back

Money paid BY the policyholder, when a covered event occurs, BEFORE the insurance company pays their part.

Front

Coinsurance

Back

Shared percentage of a cost (after deductible). Shared between insurance company AND policyholder.

Often split: 90%/10% (insurance/policyholder)

80%/20%

70%/30%

Insurance company pays the higher percentage.

Front

Policyholder

Back

The individual or entity that owns the insurance policy and is entitled to coverage under the terms of the policy.

Front

Exclusion

Back

Specific conditions or circumstances for which the insurance policy does not provide coverage.

Front

Copayment

Back

Flat rate paid for covered service