Insurance Terms Business Essentials

Term Insurance An insurance policy that provides coverage for a limited period, the value payable only if a loss occurs within the term, with nothing payable upon its expiration

Claim A demand made by the insured, or the insured’s beneficiary, for payment of the benefits as provided by the policy.

E-Policy A contract of insurance.

Beneficiary The recipient of funds, property, or other benefits, as from an insurance policy or will.

Rider A provision of an insurance policy that is purchased separately from the basic policy and that provides additional benefits at additional costs.

No Fault Where a party who is injured in an automobile accident recovers damages up to a specific amount against his own insurance company regardless of who was responsible for the accident.

Premium An amount to be paid for an insurance policy.

Comprehensive Auto insurance coverage providing protection in the event of physical damage or theft of the insured car.

Uninsured Motorist Provides that if the owner of the automobile is injured by a negligent driver of another vehicle who does not have liability insurance, then the insurance company will pay its insured’s actual damages.

Homeowner’s Policy Requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss.

Deductible A specified amount of money that the insured must pay before an insurance company will pay a claim.

Cash Value Policy A type of life insurance policy that pays out upon the policyholder’s death, and also accumulates value during the policyholder’s lifetime.

Liability Insurance Any type of insurance policy that protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice injury or negligence.

Property Damage Insurance coverage that pays for the damages to the car and possessions of the other party in an accident that is your fault.

Bodily Injury Liability Insurance that covers you in the event that you cause an accident that hurts someone else.

Medical Payments This coverage pays for health care costs regardless of who has been assigned fault.