How to Buy The Best Insurance Coverage Policy at the Lowest Cost
It doesn’t matter if you’re shopping for Car, House, Health, Life or Commercial insurance - if you don’t know the jargon you’re likely to wind up over-paying or buying the wrong insurance coverage. Here’s a useful guide to some of the more crucial insurance terms to keep you on the right track.
General terms:
Deductible - Deductibles are applied in auto, health and homeowners insurance to trim back the total cost of insurance, by your accepting some of the damages or disbursements prior to the insurance company paying for the balance. Usually you select the quantity of the deductible and the higher the quantity you select, the lower your premium.
Premium - This is merely the sum you or your company antes up to the insurance firm in exchange for their coverage and benefits rendered.
Property and Casualty - this identifies a part of the insurance industry that handles impairment to property or individuals hurt in an accident. Auto, householders and commercial liability insurance fall into this category.
Life and Health - This is the other segment of the insurance industry that does not fit under the property and casualty label.
Umbrella Policy - This is a general term implying broader coverage than a basic policy would typically offer can. For example, homeowner insurance that includes coverage for general lawsuits would be considered umbrella insurance.
Automobile Insurance:
Collision - Like the name implies, this is the aspect of your car insurance that compensates for fixing damages to your car following the deductible.
Comprehensive - This term also applies to auto insurance and it is that part of your coverage that pays for “non-collision” types of losses like fire, flood, vandalism or theft.
Liability - this is the part of your coverage that pays for damage done to a third party such as bodily injury, property damage or pain and suffering. Homeowners policies also typically have liability provisions to protect you against various types of personal injury lawsuits.
No-fault - Half of the states have no-fault insurance which pays for losses no matter who is at fault in the accident.
Medical Insurance:
Ancillary Care - Ancillary simply means “additional” or “related” or “extra”. It applies to policies that not only have basic coverage but have additional (ancillary) coverage for prescription drugs or eye care, for example.
Cobra - The “Consolidated Omnibus Budget Reconciliation Act” is a Federal law that requires companies to offer extended health care coverage to terminated employees for a period of time. This coverage is typically paid for by the ex-employee but at group rates.
Co-payment - This is a health insurance term for how much you are required to pay for a visit to the doctor’s office, or for some other type of medical care. After your co-payment and deductibles the insurance company typically pays for the remainder of the bill.
Fee for Service - With this health Insurance you to select any doctor and the insurer will pay an agreed percentage of “reasonable and customary” fees for that type of doctor in your area. You then pay any remainder.
H.M.O. - HMOs give comprehensive medical coverage for a set fee. But they require you to use their facilities and medical employees thus limiting your choice.
P.P.O. - PPOs are networks of care providers who charge a fee for service that is discounted based on a negotiated amount with the insurance company. Insurers thus cover a larger portion of your expense when you use their “preferred providers.”
Life Insurance:
Annuity - Annuities are policies that pay while the insured is alive for a specified period of time. They are typically offered by Life insurance companies as a vehicle to supplement retirement or disability.
Term Life - Term life is a form of insurance bought for a specified time (or term). If the insured dies during this time period, the insurance is paid. If not, the insurance coverage expires or must be renewed to keep the benefit.
Universal Life - A Life policy accompanied by a savings plan tied to market rates of interest and the benefits are not fixed but can change within boundaries.
Whole Life - A traditional life insurance policy that accumulates cash value over the life of the policy at a fixed rate and with pre-determined premiums. The insurance benefit is also a fixed and guaranteed amount.
Chris Carbukel enjoys helping others buy the best and lowest cost insurance policies for their needs. If you’d like to know more visit his new website Insurance-Price-Quotes.org where you can learn how to get the best deals on all kinds of insurance including finding the best House Insurance Quote.
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