Everyone knows that having insurance is a must; however, it is not always as simple as it seems. Insurance companies use many terms and it can become difficult to wrap your head around all of them. Here are some of the basic insurance terms you need to know explained simply from A to Z.
Agency– An insurance agency is a company in a community or city that sells insurance to the people of the local area.
Agent– An insurance agent is an employee and representative of an agency that sells insurance.
Claim– After a loss, clients notify their company and request they get paid for it. They will be paid, so long as the claim is validated.
Contingent beneficiary– If the primary beneficiary has passed, the contingent beneficiary will receive the life insurance policy.
Deductible– Insurance companies will make payments on your claims after you meet your deductible, meaning you will have to pay a certain amount of your losses before the company begins to help you.
Insured– Insured people are the clients of the insurance companies who are covered in their policies.
Liability– A liability is what falls on you in the case you are responsible for a wreck or injury. You will have to cover whatever costs your insurance policy does not.
Loss– Loss occurs when the insured encounters any injuries or damages.
Premiums– Premiums are the payments the insured must make to maintain their contract and insurance in place.
Primary beneficiary– In the case death of an insured member occurs, the primary beneficiary is the person who will receive the life insurance policy.
Policy– The insurance policy is simply the contract between the agency and the insured.
Term life coverage– Term life coverage is a form of coverage that only lasts for a designated period of time.
Whole life coverage– Whole life coverage is a form of coverage that remains, as long as all payments have been paid, until the insured passes.
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