Insurance Terminology

Insurance Terminology

• 1. Insurer - The insurance company
• 2. Insured – The person covered by the insurance policy
• 3. Premium – The monthly or annual amount that you must pay in order to have the insurance coverage
• 4. Underwriting – process an insurance company uses to determine who will be offered or insurance policy and at what price
• 5. Risk – uncertainty, unpredictable events which lead to loss or damage
• 6. Deductible – The amount paid out of pocket by the policy holder before insurance coverage begins
• 7. Claim – Notice to an insurer that under the terms of a policy, a loss may be covered
• 8. Insurance policy – A legal document issued to the insured setting out the terms of the contract of insurance
• 9. Sum Assured – The sum assured is known as the coverage or the cover of your insurance policy
• 10. Co-payment – a flat fee that you must pay toward the cost of medical visits, your insurance provider pays the remaining balance
• 11. Co-Insurance – The percentage that you must pay to share responsibility for your medical claims after you meet your annual deductible
• 12. Police Term (or period) – The period during which the policy contract provides protection (e.g. six months or one or three years)
• 13. Reimbursement – Payment of an amount of money related to the behalf of the insured upon the occurrence of a defined loss
• 14. Rider – Usually know as an endorsement a rider is an amendment to the policy used to add coverage
• 15. Grace Period – The grace period is the time allowed to policy holders to renew their insurance plans in case they happen to have missed their renewal date
• 16. Mediclaim – Mediclaim is a type of health insurance
• 17. T P A – Third party administrator (TPA) is an organization that processes health plan claim but does not carry any insurance risk
• 18. No claim bonus (NCB) – NCB is offered by the insurance company for not availing the claim during the policy year
• 19. Exclusion – A provision in the insurance policy that indicates what is denied coverage
• 20. Moral Hazard – Dishonesty or character defects that increase the chance of loss
• 21. Peril – A cause of loss
• 22. Physical Hazard – A physical condition that increase the chance of loss