The Trick to Finding The Best Insurance Policy at the Right Price

By Chris Carbukel

Whether you're shopping for Car, Home, Health, Life or any Insurance - learn the lingo or you will pay too much and get the wrong coverage. Here are the more common insurance terms to help you get the right insurance.

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 merely the sum you or your company antes up to the insurance firm in exchange for their coverage and benefits rendered.

Property and Casualty - this identifies a part of the insurance industry that handles impairment to property or individuals hurt in an accident. Auto, householders and commercial liability insurance fall into this category.

Life and Health - This is the other segment of the insurance industry that does not fit under the property and casualty label.

Umbrella Policy - This is a general term implying broader coverage than a basic policy would typically offer can. For example, homeowner insurance that includes coverage for general lawsuits would be considered umbrella insurance.

Automobile Insurance:

Collision - Like the name implies, this is the aspect of your car insurance that compensates for fixing damages to your car following the deductible.

Comprehensive - This term also applies to car insurance and it's that aspect of your insurance coverage that compensates for "non-collision" types of damage like fire, water, malicious mischief or theft.

Liability Insurance - Liability insurance pays the losses of a third party such as personal injury, property or pain and suffering. Homeowner insurance also has liability provisions to protect you from personal injury lawsuits.

No-fault - Half of the states have no-fault insurance which pays for losses no matter who is at fault in the accident.

Medical Insurance:

Ancillary Care/Coverage - Ancillary is just a fancy term for "additional" or "extra" or "related." It applies to comprehensive policies that for example, only cover basic health benefits but also have added (ancillary) coverage for prescription drugs or eye care, etc.

Cobra - The "Consolidated Omnibus Budget Reconciliation Act" is a Federal law that requires companies to offer extended health care coverage to terminated employees for a period of time. This coverage is typically paid for by the ex-employee but at group rates.

Co-payment - This is a health insurance term for how much you are required to pay for a visit to the doctor's office, or for some other type of medical care. After your co-payment and deductibles the insurance company typically pays for the remainder of the bill.

Fee for Service - This is health Insurance that permits you to choose any Doctor and covers some predetermined share of "reasonable and customary" fees. You then pay the 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 physicians who offer their services at a discount negotiated by the insurance company. Thus insurers will normally pay a bigger portion of your expenses when you use these "preferred providers."

Life Insurance:

Annuity - These are policies that pay while a person is alive for a specified period of time. They are usually offered by life insurance companies.

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 policy connected to an investment account and market rates. The benefits are not set but change based on the returns achieved.

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. - 29952

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