|Glossary of general insurance terms
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13. Fringe benefit -- Employee compensation other than your wages, tips and salaries, such as health insurance, life insurance and pension plans. Most fringe benefits are deductible by your employer and you do not include them in your income. However, if your employer pays for more than $50,000 of life insurance for you, your employer must include the cost of providing the excess life insurance with your income on your Form W-2.
14. Limits -- The maximum amount of benefits your insurer will pay for a loss as designated in your insurance policy.
15. Long-term care insurance -- Health insurance coverage designed to cover the cost of custodial care in nursing homes or extended care facilities.
16. Policy -- A written contract detailing your insurance coverage and the premium you agree to pay.
17. Premium -- The amount charged for an insurance policy. A premium is based on the type and amount of coverage you choose. Other factors affecting your insurance premium include your age, marital status, your driving and credit records, the type of car you drive and whether you live in an urban or rural area. Premiums vary by insurance company.
18. Private mortgage insurance -- See mortgage insurance.
19. Renters insurance -- A policy that pays for replacement of possessions but not for loss or damage to real estate.
20. Umbrella policy -- Supplemental insurance coverage in case of a liability. Companies that sell auto and homeowners insurance usually sell umbrella policies which are usually offered in $1 million increments.