It can be difficult to find an affordable health insurance plan, particularly if you don’t understand the insurance terms. Only having the correct understanding of the concepts of insurance will make the difference between having a package that can protect you for much of your medical costs and one that has you spending thousands of dollars.
To help you get started, we have put together this guide to basic insurance terminology:
Health Insurance Terminology
The Patient Protection and Affordable Care Act calls for access to safe, accessible health care for more Americans. Here is some of the basic terminology for health insurance:
- Premium – The amount you pay each month for your health care benefits.
- Deductible – The annual amount of money you will spend for medical care out of pocket before your plan kicks in and begins making payments.
- Co-payment – A fixed rate you have to pay to cover the expense of medical care, the insurance provider covers the amount left. You may be liable, for example, for a $10 co-pay for each doctor visit.
- Coinsurance- The amount you have to pay to split your insurance benefits liability after you have reached your annual limit. The insurance company, for example, could cover 80% of your claim, leaving you liable for paying the remaining 20%.
Life Insurance Terminology
Looking to start a new family? Will you have a partner or children in life and in death that you want to care for? Life Insurance provides life coverage for adults and children to help secure the future of your family. Here’s some simple Life Insurance terminology:
- Insured – The person(s) covered by the insurance policy.
- Face Amount – The dollar sum the insurance company will pay out after the insured’s death.
- Primary Beneficiary– The person(s) named to collect the life insurance policy benefits upon the Insured’s death.
- Contingent Beneficiary– If the Primary Beneficiary no longer lives, the person(s) chosen to collect the life insurance policy continues.
- Term Life Coverage– The type of coverage that only lasts for a specified time period (the “Term”) and has a fixed end date. When the Insured dies while the policy is in place, the face sum will be payable to the appointed beneficiary.
- Whole Life Coverage– The sort of policy that may last as long as the insured is alive, as long as all the premiums are charged. That form of coverage typically retains the same premium rate over the policy period.
