Insurance Policy Terminology

Features

An actuarial is the arithmetic calculations insurance providers use to establish the rates and premiums to charge the insured. The premium is the amount of money a policyholder pays to receive and maintain coverage.

Benefit Terms

Benefit packages are the collection of services the insurer will provide to the insured under the policy. The evidence of coverage details (covered expenses) are the specific range of services and benefits the insured is entitled to.

Payment Terms

Deductibles are the amount of money policyholders are required to pay within a preset period before they will be reimbursed by the insurance company for their eligible expenses. Copayments are predetermined flat fees that the insured is charged per individual service (such as a doctor's appointment or prescription medication).

Claim Terms & Processes

Claims are requests for payments to be made and can come from the insurer or the insured. The claim can be approved or denied, in which case an appeal can be made.

Considerations

Additional terminology is encountered within different types of insurance policies. For example, with health insurance, key terms include indemnity and managed care plans, primary care provider, state-mandated benefits, HIPAA, Medigap and pre-existing conditions. Whereas with collision insurance, no fault, assigned risk and accident forgiveness are terms pertaining to auto insurance policies. Insurance policies are agreement or contracts between a body or organization (known as the insurer or provider) and the person or group of people that's being covered (the policyholder). Although insurance policies deal with a range areas---car, credit, health, life and property---the basic terminology is similar.