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Financial Literacy - Insurance
TOOLS AND RESOURCES
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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