5 Must Know Insurance Terms
Understanding insurance terms and concepts is crucial. Insurance provides a safety net for unforeseen events and helps protect you from unexpected expenses. It also ensures your family's financial stability in the long run. However, finding the right insurance policy can be confusing. Here are some key terms and concepts to help you understand insurance better:
Key Insurance Terms:
Premium
Premium refers to the amount of money the insured (a person or a company) pays for an insurance policy. The premium amount varies from person to person and is influenced by several factors. It is clearly stated in the contract and failure of paying a premium can lead to your insurance lapsing.
Policyholder
The policyholder is the person who owns the insurance policy and is protected by all the details inside. Depending on your relationship, you can also include more people in your policy, in case of health insurance.
Beneficiary
A beneficiary is the person or entity who will receive the benefits from the insurance in case you need to claim it. For example, your beneficiary for life insurance will receive the insured amount upon your unfortunate death.
Deductible
In the case of health insurance, before you can make an insurance claim for medical/hospitalization expenses, you need to know about the health insurance deductible. This is the amount you pay out of your pocket.
Coverage Limit
The coverage limit is the maximum amount your insurance will cover. If the costs are more than the limit set by the insurer, you might be responsible for covering the remaining expenses.
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