Insurance Day 4

Risk Pooling

The spreading of financial risk evenly among a large number of contributors to the program

risk

The expensive chance of loss from an event that cannot be entirely controlled

insurance

protection against possible financial loss

Deductible

Amount you must pay before you begin receiving any benefits from your insurance company

Premium

Amount you pay regularly to purchase insurance

insurance policy

a written contract between the insured and an insurance company that promises to pay for all or part of a loss

quote

An estimate of how much something will cost if you buy it.

insurance agent

a person employed to sell policies and provide customer service.

claim

formal request to the insurance company for reimbursement for a covered loss

Insurance Loss

The basis of a claim for damages under the terms of a policy.

insurance underwriter

determine the cost of a policy using risk factors and statistical data

Liable

legally responsible

Liability auto insurance

insurance that covers damage to the other vehicle when you cause an accident

Collision insurance

insurance that covers damage to your vehicle when it is involved in an accident

Comprehensive insurance

covers your car for reasons other than a collision, such as theft, fire, vandalism

uninsured motorist coverage

insurance that pays if you are struck by someone who does not have insurance. Will also pay if you are a victim in a hit-and-run accident.

Coverage limits

The maximum amount the insurance company will pay you for your loss

Personal Injury Protection (PIP)

Automobile insurance that pays for medical, hospital, and funeral costs of the insured's family and passengers, regardless of fault

Medicare

A federal health insurance program for persons 65 years and older

Medicaid

Federal program that provides medical benefits for low-income persons.

Copay

a fixed fee you pay for specific medical services

Co-insurance

the percentage of the medical bill that the insured must pay, AFTER the deductible has been met

HMO (Health Maintenance Organization)

Health insurance that requires a Primary Care Physican and wants you to only use in-network doctors

PPO (Preferred Provider Organization)

Health Insurance that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network.

Disability Insurance

Provides payment to replace earnings during times when workers cannot work due to illness or injury

long-term care insurance

Provides payment for extended nursing care due to accidents, illness, or old age

Maximum Out-of-Pocket Expense

The most you have to pay for covered services in a year

Term Life Insurance

Life insurance that pays a death benefit if the policyholder dies within a specific time period. Has no remaining value at the end of this time.

whole life insurance

life insurance that pays a benefit on the death of the insured and also accumulates a cash value.

Renters Insurance

Covers your personal property in a rented apartment or home.

Homeowners Insurance

Protects against most types of property losses and liabilities related to home ownership

Replacement Value

the cost to acquire an essentially identical asset

Actual Cash Value

the payment you receive is based on the replacement cost of an item minus depreciation

Insurance riders

Additional insurance purchased to protect specific items of value not covered on your primary policy