Glossary of Insurance Terms
Beneficiary
The person you choose to receive the money from your life insurance policy when you pass away.
Cash Value
A savings-like feature in some permanent life insurance policies that grows over time and can be borrowed from.
Claim
A request you make to your insurance company to get benefits or payment.
Coinsurance
The percentage of a medical bill you pay after meeting your deductible. Example: you pay 20%, insurance pays 80%.
Copay (Copayment)
A fixed amount you pay for a covered service, like $20 for a doctor’s visit or $10 for a prescription.
Deductible
The amount you must pay each year before your insurance starts covering costs.
Exclusion
Something your policy does not cover, like certain treatments, conditions, or services.
Medicare Advantage (Part C)
A Medicare-approved plan from a private company that bundles Parts A & B and usually includes drug, dental, and vision coverage.
Medicare Part D
Optional coverage that helps pay for prescription drugs.
Network
A list of doctors, hospitals, and pharmacies your insurance company partners with. Staying “in-network” usually costs less.
Out-of-Pocket Maximum
The most you’ll pay in a year for covered healthcare services. After this, your insurance pays 100%.
Policy
Your official insurance contract that explains what’s covered, what’s not, and how much it costs.
Premium
The amount you pay (monthly or yearly) to keep your insurance active.
Rider
An add-on to your policy that provides extra coverage. Example: a rider that covers critical illness.
Underwriting
The process the insurance company uses to decide your eligibility and rates, based on your health and other factors.