Each form of insurance has its own terminology. Automobile insurance has terms like “bodily injury coverage” and “collision coverage” that are unique. There are some terms common to all insurance coverages:

Beneficiary: The person who receives the proceeds of the insurance payout. For example, you are the beneficiary if your car (that you insure) is totaled in an accident.
Benefit: The money or services provided to the beneficiary.
Claim: The request a beneficiary submits to the insurance company for payment of a covered expense or item.
Co-payment: A flat fee, usually for medical visits or prescriptions.
Deductible: The amount of money you are obligated to pay out-of-pocket for damages or services (like an annual deductible in medical coverage) before insurance pays.
Exclusion: An expense or item that is not covered.
Insured: The person covered by the policy.
Insurer: The insurance company providing the policy.
Lapse: A period during which premiums are not paid, usually resulting in a termination of the insurance.
Policy: The contract between the insured and the insurer.
Premium: The monthly (or annual) amount paid for the insurance coverage.

As this course discusses different types of insurance, specific terminology for those policies will be introduced. If you need help with other definitions, use this financial glossary.

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