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20 Words in the Insurance World You Need to Know

Published by Handy Work on

The finances industry is giant, one that not only touches our lives but also the world. And it is in this industry that some insurance words get used a lot. 

Insurance companies use these words to market their products, sell their services, and advertise their company. Different agencies and individuals often use the words in the insurance industry.

If you are a business owner or just someone who wants to understand what these 20 words mean in the insurance world, then this article is for you. We will introduce you to some of the most commonly used insurance terms in the 21st century.

What are 20 Words Used in the Insurance Industry?

1. Term

The term refers to the period during which an insurance policy can be taken out and insured.

Photo by Towfiqu barbhuiya on Unsplash.

2. Premium

The premium is a fee that you pay for your insurance policy. In the case of term life insurance, the premium is a monthly fee for a policy that covers $250,000 at a rate of $25 per month ($2,500 per year).

3. Annual

The annual is the amount of money that you pay for your insurance policy each year.

4. Premium Tax Credit

The premium tax credit is a tax benefit for families who buy health insurance through the Health Insurance Marketplace. 

Premium tax credits are used to help families afford health insurance premiums and lower their tax burden.

5. Insured

The insured is the person or group that pays the premium to the insurance policy.

6. Commodity

A commodity is an item or good that has value because it can be bought and sold in an open market for money. Here, it refers to real estate or any other form of the property where there are no restrictions on its use.

7. Replacement Cost

Replacement cost refers to the amount of money that you would need to pay if you had to replace something, such as an item from your home or car that has been damaged.

8. Replacement Value

Replacement value refers to the amount of money that you would need to pay if you had to replace something, such as an item from your home or car that has been damaged.

9. Accident

An accident is a happening that is unexpected and can be caused by natural causes or other factors. With term life insurance, an accident means a death in which a person dies because of an accident in which he/she is driving, walking, or using public transportation, etc. 

The term can also refer to the medical treatment and hospitalization costs of someone who has died as a result of an accident.

Photo by Josh Appel on Unsplash.

10. Death

Death is the permanent end of a person’s life. With term life insurance, death means the permanent end of a person’s life.

11. Medical Expense

Medical expenses are costs you incur in your health condition because of medical treatment or hospitalization.

12. Catastrophic

Catastrophic refers to something that has huge effects on people and society, such as natural disasters or war that cause great losses in terms of money and human lives. 

13. Coinsurance

Coinsurance is a percentage of the medical expenses that you pay as a percentage of the medical expenses that your insurance company pays.

14. Policy

A policy is a contract that you have with an insurance company in which you agree to pay the premium for the policy and receive benefits from the company if you need them.

15. Beneficiary

The beneficiary is the person or group that receives the benefits from the insurance policy.

16. Deductible

The deductible is the amount of money that you pay before the insurance company pays anything.

17. Claim

A claim is a situation in which you are asking the insurance company to pay money for an accident or other events that you have suffered.

18. Coverage

In the case of term life insurance, coverage refers to the benefits that you get from the insurance policy.

19. Liability

Liability refers to a legal responsibility that you have towards other people or entities.

20. Denial

Denial is an action taken by an insurance company to refuse payment for a claim.

Do You Know Your Words Now?

This article introduced you to 20 Words in the Insurance World You Need to Know. Hopefully, it has helped you understand what these words mean and how they are used in the insurance industry.

For more insurance-related articles, please visit our blog, HandyWork!

Categories: Finance

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