Common Insurance Terms Explained in Simple Language
Insurance policies often contain technical terms that can be confusing for many people. Understanding these terms is essential to making informed decisions and avoiding misunderstandings during the claims process.
A premium is the amount paid regularly to maintain insurance coverage. A deductible is the amount the policyholder must pay out of pocket before the insurer covers the remaining costs. Coverage limits refer to the maximum amount the insurer will pay for a covered loss.
An exclusion is a situation or condition that is not covered by the policy. A policyholder is the individual or entity that owns the insurance policy, while a beneficiary is the person entitled to receive benefits, especially in life insurance policies. Knowing these terms helps policyholders better understand their rights and responsibilities.