A-Z Insurance Glossary

A good way to save money on insurance or anything, for that matter-is to close the information gap between you and the experts. We’re not suggesting you get your broker’s license before you buy an insurance policy, but it’s wise to get to know the trade’s essential words and phrases.

Below you’ll find some key terms, which are organized by insurance type.

1035 Exchange Cash value, which is transferred from one life insurance policy to…

Accelerated Benefits Life insurance benefits made available to policyholders before…

Accidental Death Benefit Also called “Double Indemnity,” accidental death benefit is a life…

Actual Cash Value A method of loss reimbursement for damage caused by an item…

Actuary Highly-trained insurance professionals who evaluate claims risk…

Adequacy of Coverage The extent to which the value of property, possessions, securities…

Adjustable Life Insurance A life insurance plan that allows you to vary your coverage based…

Adjustable-Rate A type of life insurance policy that…

Adjuster A person hired by an insurance company to…

Admitted Carrier, Any insurance company, licensed and authorized to sell insurance in…

Agent An insurance company representative who helps individuals,…

All-Risk Coverage A type of insurance policy that covers claims from any peril…

American Municipal Bond Assurance Corporation Evolved from the AMBAC Insurance Corporation in 1985, the American…

Amount At Risk Also known as the “net amount at risk” or NAR, this term refers to…

Annuitant, The person who receives the benefits of an annuity or pension…

Annuitize To begin pulling income from an annuity. When it’s time to…

Annuity An insurance-like, financial contract that guarantees a series of…

Appraisal A survey that helps determine a property’s insurable value or the…

Appraiser An expert trained to evaluate the worth of certain accurately…

Assets Material or monetary resources owned by an individual or…

Assigned Risk Plan Insurance pools available nationwide that provide auto insurance…

At-Risk A situation that presents a high likelihood of loss. If you…

Auto Insurance Claims Requests for monetary compensation filed by auto insurance…

Balance Sheet A term which refers to a list of assets,…

Bodily Injury Covers physical injury and death caused others by the driver…

Car Insurance Coverage Financial security designed to protect everyone on the road…

Case Management The coordination of health and medical…

Cash Value Account A tax-sheltered savings account that’s part of a permanent life…

Casualty Damage or loss resulting from an accident…

Casualty Insurance A type of insurance coverage that…

Coinsurance An amount specified by your insurance…

Collision Pays for physical damage to the insured person’s car when it…

Commercial Lines Insurance designed to protect businesses…

Common Carrier An insurance company which either…

Comprehensive Insurance Pays for automobile damage resulting from anything but collision…

Copay A prearranged, specific amount of money a policyholder pays for…

Cost Indices Usually related to life insurance, cost indices reveal the truth…

Coverage Area The geographical area in which you may…

Death Benefit The amount of money your beneficiaries…

Declaration Page The part of a property or liability policy that lists personal…

Deductible The amount of money an insured person must pay out of pocket…

Deductible Risk The amount of risk you assume when opting for a certain policy…

Disease Management The process of coordinating and managing…

Dividends Premium refunds given policyholders by…

Earthquake Insurance Provides protection from shaking and cracking that can destroy…

Exclusions/Limits Provisions addressed in an insurance policy that eliminates or…

Expense Ratio The percentage of insurance premiums used…

Floater insures movable property, covering losses wherever they occur…

Flood insurance protects against damage due to flooding in a disaster…

General Liability Insurance Protects the assets of a person or…

Grace Period The period of time following an…

Guaranteed Cost/Non-Participating Policies Life insurance policies with fixed and invariable premiums, cash…

Guaranteed or Extended Replacement Cost Pays the full cost of replacing or repairing a damaged or…

HSA (Health Savings Account) A tax-advantaged medical savings account that accumulates funds…

Indemnity Compensation that offsets a casualty or…

Insurance Broker An insurance salesperson who works…

Investment Income Additional income, or profit, that…

Liability Auto insurance that pays for bodily injury (BI) or property damage…

Liability Coverage Home insurance protection that guards homeowners and members of…

Loss Control The practice of reducing an insurer…

Managed Care A health care system that attempts to enhance the quality and…

Medical Payments Sometimes called “MedPay,” medical payments coverage…

Net Payment Cost Index An index that calculates the difference between the costs paid by…

No-Fault Insurance Laws Auto insurance provision, instituted state by state that allows…

Participating Policies Insurance contracts that pay the policyholder dividends overtime…

Peril A specific risk or cause of loss covered by an insurance policy…

Personal Lines Refers to property and casualty…

PIP (Personal Injury Protection) Covers medical expenses, lost wages, and other damages that result…

PPO (Preferred Provider Organization) A managed-care insurance plan that provides medical services to…

Premium The amount charged by an insurance company, usually either…

Premium vs. Cost The difference between what you pay for a life insurance policy…

Property Damage Often mandatory, a type of liability insurance that pays for harm…

Quote, A set charge pledged by an insurance company for insuring someone…

Reinsurance Insurance purchased by an insurer on…

Renewal Keeping an active insurance policy in place by meeting the terms…

Replacement Cost Insurance that covers the insured’s dwelling or damaged personal…

Reserve The funds or assets of an insurance company…

Rider or Endorsement A form attached to an insurance policy that alters the policy…

Risk Management The process businesses go through that…

Schedule A list of items “scheduled” or covered under home insurance…

Secondary Market A place you can sell life insurance…

Solvency The financial stability of insurance…

Standard Auto A category of auto insurance made up of…

Stop Loss A type of specialized self-insurance that…

Subrogation The practice by an insurance company of…

Surplus The financial cushion and insurance…

Surrender Cost Index A method of comparing the costs of cash value life insurance that…

Term Life Insurance Insurance protection that lasts a…

Umbrella Policy An extra layer of coverage purchased as…

Uninsured/Underinsured Liability Coverage Covers you when you’re involved in an accident with another driver…

Variable Life Insurance A type of insurance policy that protects…

Whole Life Insurance A life insurance policy designed to…