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Financial Literacy - Insurance
Insurance toolkit
Glossary terms, calculators, work sheets and lots of strategies are provided to help you comprehend insurance.
Understanding insurance needs

Glossary of general insurance terms

4. Allowable costs -- Covered costs of a medical insurance plan.

5. Beneficiary -- One who benefits from an insurance policy, will or deed or trust.

6. Binder -- A temporary insurance contract that provides proof of coverage until a permanent policy can be issued.

7. Broker -- A person who represents the insurance buyer, not the insurance company or agent, and helps a buyer obtain the proper insurance coverage.

8. Deductible -- The amount a policyholder agrees to pay toward the insurance loss. The deductible may apply to all claims made during a specified period, as with health insurance, or to each claim for a loss occurrence, such as an automobile accident.

9. Deductible amount -- The amount of money a policyholder must pay before an insurance company steps in and pays the rest. Deductible amounts range from $100 to $1,000. The higher your deductible the lower your insurance premium or cost. A higher deductible also means you'll have to pay more money out of your own pocket if an accident or illness should occur.

10. Disability income insurance -- Health insurance that provides some payment to replace lost income if the insured becomes sick or disabled.

11. Escrow -- An account in which a neutral third party holds the documents and money in a real-estate transfer until all conditions of a sale are met. Also, an account in which money for property taxes and insurance is held until paid; money is added to the account every time a mortgage payment is made.

12. Exclusion (insurance) -- A provision in an insurance policy that denies coverage for certain losses, locations, people and properties.

-- Posted: Aug. 20, 2007
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