Getting to know the Insurance Lingo

With so many choices available when it comes to insurance, it can be overwhelming to keep up with the terms and language of obtaining insurance, reading the policies and getting what you’re worth. Sometimes the language alone can deter individuals from getting insurance. Now there’s no need to let the insurance lingo intimidate you. Here’s what you need to know.

Actuary – this is the person who calculates the rates and payments applicable for the applicant.

Actual Cash Value – this is the value of your assets at the current time and minus depreciation. So if you have a stereo stolen that is five years old it will not be calculated as new but how much it would be worth in today’s dollars.

Casualty Insurance – this type of insurance covers you in case you damage or injure another person or property and may require to pay liability costs.

Claim – when you decide to ask for money from your insurer due to accident, death or injury as mentioned in your insurance policy.

Death benefit – this is the amount of money that will be owed to the beneficiary from the insurance policy of the person who is covered but has died.

Exclusions – many insurance policies include many exclusions that are a lot of the time written in small fine print. Read them to make sure that you know what your policy doesn’t cover.

General Liability Insurance – this will cover you around your business and home in case someone gets injured or something gets damaged. This can be for a home business, a product or a company.

Hazardous Activity – certain individuals lead hazardous lives and increase their risk of accident or death. Insurers are unlikely to cover people for personal accident if they partake in hazardous activities like sky jumping, swimming with sharks or bungee.

Living Benefits – some insurance policies allow you to draw out on the policy before death. This depends on personal circumstance like needing medical care, suffering from a long term and terminal illness or when you need to be in a nursing home.

Mortgage Insurance Policy – when you take out a mortgage most banks and credit companies will demand that you take out mortgage insurance. This insurance covers the bank or lender in case you can’t pay your mortgage due to illness or death. It doesn’t cover you to make your repayments for you when you are going through troubled times.

Policy – this is the written contract that you sign with the insurance company stating what you are covered for and what you’re not covered for. This contract states all the information about the type of insurance you are taking out, along with any clauses, rules and regulations. It should be read carefully and understood before signing.

Term Life Insurance – this type of insurance, insures for a certain period of time. You can choose from one year, ten years or till you retire.

Whole Life Insurance – once the covered person dies, the insurance company pays out the insured amount to the beneficiary.

These are some of the more common insurance lingo that you might come across. Don’t let the language intimidate you or prevent you from taking out insurance that can help protect you and your family. If you’re not sure about anything that is in your policy, make sure that you ask your insurance agent, if they don’t give an adequate response, get a second opinion.