Insurance Terms Glossary
When you decide to buy insurance online, navigating through the plethora of terms can be overwhelming. Insurance jargon can often seem like a foreign language, filled with acronyms and complex phrases. This glossary aims to decode these terms, making your insurance journey more straightforward and less daunting.
Common Insurance Terms Explained
- Premium: The amount you pay for your insurance policy. Think of it as the rent for your peace of mind.
- Deductible: This is the amount you pay out-of-pocket before your insurance kicks in. A higher deductible often means a lower premium.
- Coverage: The scope of protection your insurance policy provides. For instance, comprehensive auto insurance covers theft and damage, not just accidents.
- Policy: The contract between you and the insurance company. It outlines what’s covered, conditions, and your responsibilities.
- Benefit Period: The length of time during which an insurance policy will pay benefits, especially in health or disability insurance.
- Co-payment (Co-Pay): A fixed amount you pay for covered health care services at the time of service.
- Co-insurance: Similar to a co-pay but often a percentage of the cost. You and the insurer share costs in certain proportions.
- Exclusions: Specific situations or items not covered by your policy. Knowing these is crucial to avoid surprises.
- Endorsement: An amendment to your policy that changes coverage, either adding or removing benefits.
- Liability: Legal responsibility for damage or injury to another person or property. Liability insurance covers these costs.
- Actuary: A professional who uses statistical methods to assess risk and set premiums.
- Subrogation: The insurer’s right to pursue recovery of payments made under your insurance policy from another party responsible for the loss.
Insurance Companies in Kenya
When dealing with insurance companies in Kenya, such as Britam, Jubilee Insurance, or APA Insurance, understanding these terms can significantly enhance your interaction. These companies provide detailed information on their websites, often explaining how these terms apply in their policies, which can be particularly helpful when you’re ready to buy insurance online.
Key Terms for Specific Types of Insurance
- Life Insurance:
- Cash Value: The amount you can borrow or withdraw from a permanent life insurance policy.
- Death Benefit: The amount paid to beneficiaries upon the policyholder’s death.
- Health Insurance:
- Pre-Existing Conditions: Health problems you had before the start of your coverage, which might not be covered.
- Out-of-Pocket Maximum: The most you’ll have to pay for covered services in a plan year before your insurance covers 100%.
- Auto Insurance:
- No-Fault Insurance: Regardless of who’s at fault, each person’s insurance covers their injuries.
- Comprehensive Coverage: Covers damage to your vehicle not caused by a collision, like theft or natural disasters.
- Home Insurance:
- Replacement Cost: The cost to repair or replace your home and belongings without deducting depreciation.
- Actual Cash Value: The replacement cost minus depreciation.
Conclusion
Understanding these insurance terms is akin to having a map when you’re navigating new territory. When you buy insurance online, being well-versed in this vocabulary not only helps in making informed decisions but also in communicating effectively with your insurer. Remember, insurance is designed to provide security; knowing the language ensures you’re getting exactly what you need.
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