Financial Literacy Final

Insurance

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 Insurance

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

Collision Insurance

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

Comprehensive Insurance

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

Homeowners Insurance

Protection for losses to a private residence and the possessions within it, as well as liability coverage against accidents in the home or on the property

Renters Insurance

Protection for destroyed or stolen personal property for a renter

Umbrella Insurance

Optional extended liability coverage that can be added to auto and homeowners policies

Health Insurance

Coverage for an individual’s (or family‘s) medical expenses from illness or injury

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​​​​​​​

Health Insurance Marketplace

A platform where individuals, families, and small businesses can compare health insurance plans​​​​​​​

High-Deductible Health Plan (HDHP)

A health plan with a high minimum deductible for medical expenses​​​​​​​

Health Savings Account (HSA)

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​​​​​​​

Self-Insured

Having enough money saved and invested so a spouse or loved one could live off of it when you die, eliminating the need for life insurance​​​​​​​

Dependent

A person who relies on someone for financial support​​​​​​​

Actuarial Life Table

Life expectancy chart used by insurance agents to figure out life insurance premiums for an individual based on a variety of factors

Disability Insurance

A type of insurance that will replace a portion of the policyholder’s income in the event that the policyholder becomes disabled and is unable to work

Elimination Period

The period of time between when a doctor confirms a disability and when the policyholder receives a disability payment

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​​​​​​​

Supplemental Insurance

Plans to cover expenses and services not on typical policies