Insurance Glossary: Key Terms
Plain-language definitions of terms you will see in policies and quotes. Exact meanings can vary by policy, so check your own documents.
- Premium
- The amount you pay for an insurance policy, often monthly or yearly.
- Deductible
- The amount you pay yourself on a covered loss before the insurer pays its share (in policies that use deductibles).
- Copay
- A fixed amount you pay for a specific health service, such as a doctor visit.
- Coinsurance
- Your percentage share of a covered cost after the deductible, common in health plans.
- Out-of-pocket maximum
- In health plans, the most you pay in a plan year for covered in-network care before the plan pays 100% of covered costs.
- Policy limit
- The most an insurer will pay for a covered loss under a policy or coverage section.
- Exclusion
- Something the policy specifically does not cover.
- Endorsement or rider
- An addition that changes a policy’s coverage, usually for an extra cost.
- Declarations page
- The summary page of a policy listing who and what is covered, coverage amounts and the policy period. See how to get a renters insurance declaration page.
- Beneficiary
- The person or entity who receives a life insurance death benefit. See who is the beneficiary in credit life insurance.
- Insurable interest
- A financial stake in the person or property being insured. See when insurable interest must exist for life insurance.
- Cash value
- The savings component of some permanent life insurance policies. See net cash value.
- Claim
- A request to your insurer to pay for a covered loss.
- Adjuster
- The person who investigates and evaluates a claim. See what an adjuster does in auto insurance.
- Underwriting
- The insurer’s process of assessing risk to decide whether to offer coverage and at what price.
- Lapse
- When coverage ends because a premium was not paid or a policy was not renewed. See how long a lapse stays on your record.
- Lienholder
- A lender with a legal claim on property, such as a car loan company. See cashing an insurance check with a lienholder.
This page is general information only. It is not insurance, legal, tax or financial advice. Rules, coverage and prices vary by state, insurer and policy, so check your own policy documents and talk to a licensed agent or your insurer before making decisions.
