Health Insurance Terms

One of the most valuable things that you will benefit from is insurance. Whether that is home insurance, car insurance, vision, dental, or life insurance, it is very important because it is something that we all need at any moment in our lives.

Signing up for an insurance plan introduces you to a whole new world of words, phrases, and terms. The insurance world has certain terms that you would not use in your everyday life. This can sometimes make the understanding of the insurance plan difficult unless you know what these terms and phrases mean. It is very important, therefore, to have a basic understanding of these terminologies so you can have a better understanding of the insurance policy you are taking out.

At first, this might seem very confusing. But, you should not let this stop you. We are going to cover some of the most used terms and phrases so that in the future you will not have any trouble knowing what they mean.

Agent - A person who solicits, sells, negotiates, and consummates an insurance on behalf of an insurance firm

Beneficiary - A person who is designated by the insurer or by law as the recipient of the benefits derived from a cheap home insurance policy.

Broker - An independent and licensed professional who represents an insured person in requesting, negotiating, and acquisition of insurance contracts.

Commission - This is the money or allowance paid by insurers to insurance brokers or agents for selling, arranging, or negotiating an insurance policy Insurer - Is the company who agrees to compensate and indemnify the insured for losses covered by the policy.  The insurer takes on the risks after receiving premium payments by the insured.

Effective Date - This is the date that the policy starts/begins.

Expiry Date - This is the date that the insurance policy ends.  The usual time of expiry is at 4:00 P.M. on the date specified. 

Homeowners insurance policy - This is a type of insurance that provides protection for the home and property of a policyholder.  It also includes the policyholder"s liability for injuries or damage to others.

Insurance - A social contract or device that transfers the risk of one or several persons or entities to an insurer thereby reducing the risk of the former. The insurer compensates for and assumes the losses of the former for a specific consideration or fee and within the agreed extent

Insured - The term "insured" refers to the party who takes out the insurance policy and for whom the insurer will compensate for the losses covered by the plan

Liability - This is the money or amount owed due to the adverse results of one"s actions, inaction or omission on others.

Premium - This is the amount paid in whole or in installment to an insurance company for the protection from specific risks covered by the insurance plan. 

Proposal - This is the form which a prospective insurance buyer has to accomplish when applying for an insurance coverage.

These are the basic terms that you should understand about insurance.  The knowledge will help you choose the insurance policy best suited to your needs. It will also help you understand what comes with the plan that you are considering of taking.