Understanding Terms Used in Insurance Claims
When going about shopping for the right policy or making sure your policy protects you in the ways you need, it is important to understand insurance terms used. In educating yourself about the legal jargon employed by the insurance companies, you can be better prepared to combat an unfair claim payment or prevent your policy from being hijacked by vague language.
Below, courtesy of the University of Illinois, is a glossary of insurance terms, ranging from the letter A to B:
Actuary. A person professionally trained to apply probability and statistics to the practical problems of insurance and related fields.
Accident insurance. A form of health insurance that insures against financial loss resulting from an accident.
Accidental death and dismemberment insurance. Insurance that pays the insured in the event of death or loss of limb or eye resulting from an accident.
Actual cash value. A claim settlement method in which the insured receives payment based on the current replacement cost of a damaged or lost item, less depreciation.
Acute care. Care that is usually short term and recuperative.
Adjustable life insurance. Insurance that lets the policyholder change the plan of insurance, raise or lower the face amount of the policy, increase or decrease the premium and lengthen or shorten the protection period.
Agent. A representative of one or more companies who sells insurance. Annuity. A contract that provides an income for a specified period of time.
Application. A signed request for insurance, giving information about the prospective policyholder.
Appurtenant structures. Buildings not attached to a house.
Assigned benefits. An arrangement whereby your physician accepts payment directly from the insurance company.
Assigned risk pool. A state program through which people, unable to get auto insurance elsewhere due to poor driving or accident records, can buy coverage at higher rates.
Automatic premium loan. A provision in a life insurance policy that any premium not paid by the end of the grace period (usually 31 days) is automatically paid by a policy loan if there is sufficient cash value.
Automobile insurance. Insurance that pays for loss to individuals or property from an auto accident, theft, or other perils specified in the insurance contract.
Beneficiary. The person named in a life insurance policy to receive the insurance proceeds at the death of the insured.
Blue Cross. An independent, mutual for profit membership corporation providing coverage for hospital care.
Blue Shield. An independent, mutual for profit membership corporation providing coverage for surgical and medical care.
Broker. A person who represents insurance buyers, not companies.