Need to Know The Best Way To Buy Good Insurance Policy Coverage?
November 4, 2009 by Chris Carbukel
Filed under Health Insurance
It doesn’t matter if you are shopping for Auto, Home, Health, Life or Business insurance – if you don’t know the lingo you are liable to end up paying too much or getting the wrong coverage. Here’s a handy guide to some of the more important insurance terms to keep you on the right track.
General terms:
Deductible – Deductibles are applied in auto, health and homeowners insurance to trim back the total cost of insurance, by your accepting some of the damages or disbursements prior to the insurance company paying for the balance. Usually you select the quantity of the deductible and the higher the quantity you select, the lower your premium.
Premium – This is simply the amount you or your company pays to the insurance company in exchange for their coverage and benefits provided.
Property and Casualty – this describes a part of the insurance industry that covers damage to property or persons injured in an accident. Auto, home-owners and business liability insurance fall under this category.
Life and Health – This is the other section of the insurance industry that doesn’t fit under the property and casualty category.
Umbrella Insurance – This is wider insurance coverage than the original fundamental policy. For instance, a householder’s insurance policy that also admits a universal liability provision of $1,000,000 for personal lawsuits may be considered an umbrella policy.
Car Insurance:
Collision – Just as the name implies, this is the part of your auto insurance policy that pays for repairing damages to your car after the deductible.
Comprehensive – Comprehensive insurance covers the “non-collision” types of losses to your vehicle like fire, flood, vandalism or theft.
Liability – this is the part of your coverage that pays for damage done to a third party such as bodily injury, property damage or pain and suffering. Homeowners policies also typically have liability provisions to protect you against various types of personal injury lawsuits.
No-fault – About 50% of the states have “no fault” laws which require insurance companies to pay for damages to vehicles, property and person no matter who is at fault in the accident.
Medical Insurance:
Ancillary Care – Ancillary simply means “additional” or “related” or “extra”. It applies to policies that not only have basic coverage but have additional (ancillary) coverage for prescription drugs or eye care, for example.
Cobra – A Federal law that requires companies to offer health coverage to employees for a period of time after they have left the company. The ex-employee generally pays for this insurance at group rates.
Co-payment – An amount much your insurance requires you to pay for each visit to the doctor’s office, or for other care. The insurance company then pays the remainder of the bill assuming the deductible has been met.
Fee for Service – With this health Insurance you to select any doctor and the insurer will pay an agreed percentage of “reasonable and customary” fees for that type of doctor in your area. You then pay any remainder.
H,M.O. – “Health Maintenance Organizations” are designed to provide comprehensive medical coverage for a set fee. However, these organizations typically require that you use their Doctors and facilities thus limiting your choice.
P.P.O. – PPOs are networks of care providers who charge a fee for service that is discounted based on a negotiated amount with the insurance company. Insurers thus cover a larger portion of your expense when you use their “preferred providers.”
Life Insurance:
Annuity – Annuities are special types of policies that pay benefits while a person is alive for a specified period of time. They are sometimes connected to Life insurance policies.
Term Life – Term life is a form of insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.
Universal Life – A Life insurance policy attached to a savings vehicle tied to market interest rates and where the benefits are not fixed but may change within limits.
Whole Life – A traditional life insurance policy that accumulates cash value over the life of the policy at a fixed rate and with pre-determined premiums. The insurance benefit is also a fixed and guaranteed amount.
Chris Carbukel enjoys showing others how to buy the best and lowest cost insurance policies for their needs. If you’d like to learn more visit his new website Insurance-Price-Quotes.org where you can learn how to get the best deals on all kinds of insurance including finding the best House Insurance Quote.
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