Insurance Terms

Business Essentials

Term InsuranceAn insurance policy that provides

coverage for a limited period, the value payable only if a loss occurs within the term, with nothing payable upon its expiration

Claim A demand made by the insured, or

the insured’s beneficiary, for payment of the benefits as provided by the policy.

E-PolicyA contract of insurance.

Beneficiary The recipient of funds, property, or

other benefits, as from an insurance policy or will.

RiderA provision of an insurance policy

that is purchased separately from the basic policy and that provides additional benefits at additional costs.

No FaultWhere a party who is injured in an

automobile accident recovers damages up to a specific amount against his own insurance company regardless of who was responsible for the accident.

Premium An amount to be paid for an

insurance policy.

Comprehensive Auto insurance coverage providing

protection in the event of physical damage or theft of the insured car.

Uninsured MotoristProvides that if the owner of the

automobile is injured by a negligent driver of another vehicle who does not have liability insurance, then the insurance company will pay its insured’s actual damages.

Homeowner’s PolicyRequires the policyholder to carry

insurance equal to a specified percentage of the value of property to receive full payment on a loss.

Deductible A specified amount of money that

the insured must pay before an insurance company will pay a claim.

Cash Value PolicyA type of life insurance policy that

pays out upon the policyholder’s death, and also accumulates value during the policyholder’s lifetime.

Liability InsuranceAny type of insurance policy that

protects an individual or business from the risk that they may be sued and held legally liable for something such as malpractice injury or negligence.

Property DamageInsurance coverage that pays for

the damages to the car and possessions of the other party in an accident that is your fault.

Bodily Injury LiabilityInsurance that covers you in the

event that you cause an accident that hurts someone else.

Medical PaymentsThis coverage pays for health care

costs regardless of who has been assigned fault.