Ramsey Classroom Chapter 9

Insurance

an arrangement in which an individual will receive financial protection or reimbursement of losses from an insurer

Policy

the contract between an insurance company and the insured individual

Coverage

the amount of liability protection offered to an individual through an insurance policy

Premium

the amount of money paid for an insurance policy

Grace Period

the amount of time after the premium is due in which a policyholder can make a premium payment without suffering a lapse (break) in coverage

Deductible

the amount of money you will pay out of pocket before the insurance company will make a payment

Claim

a formal request by a policyholder to their insurance company for compensation for a covered loss

Copays

(also copayments or coinsurance) the payments an individual makes each time they get medical service

Out of Pocket Maximum

the most a policyholder has to spend for covered services in a year.

Liability

protection against claims resulting from personal injury or property damage as the result of an auto accident

Collision

protection for damage to your car resulting from a collision with another car or object

Comprehensive

protection for loss or damage to your vehicle caused by something other than a collision (such as vandalism)

Uninsured/Underinsured Motorist Protection:

protection for you and passengers if you're hit by an uninsured or underinsured motorist, or if you are the victim of a hit-and-run

Personal Injury Protection (PIP)

a component of auto insurance that pays for medical expenses, lost wages, and other financial losses of the driver and passengers of the policyholder's vehicle

Affordable Care Act (ACA)

also known as Obamacare; the health care reform law enacted in 2010, intended to make affordable health insurance more available

Subsidizing

the practice of employers paying for a portion of their employees' insurance premiums

High-Deductible Health Plan (HDHP)

a health plan with a high minimum deductible for medical expenses

Health Savings Account

a tax-exempt savings account dedicated to health care costs; only available for individuals on a high-deductible health plan (HDHP)

Lifetime limit

the maximum amount of lifetime benefits a person can receive from their insurance company.

Beneficiaries

people who are designated by the policyholder to receive the death benefit of a life insurance policy

Death Benefit

benefit paid to the beneficiaries after the policyholder dies

Term life Insurance

life insurance for a specified amount of time; at the death of the policyholder, the insurance company pays the death benefit to the beneficiaries

Whole Life Insurance (or Cash Value)

life insurance that lasts for the life of the policyholder and uses a portion of the premium as an investment

Dependent

a person who relies on someone for financial support

Identity Theft

the act of fraudulently gaining and using the personal information of someone else, usually for financial gain

Long Term Care Insurance

a type of insurance that covers some or all of the costs of nursing home care, assisted living, in-home care, and other end-of-life care