The insurance industry has a lot of jargon! Whether you are looking for health insurance, travel insurance, or visitor to Canada insurance, you’re sure to come across terminology that is unfamiliar to you. Hopefully this glossary of common insurance words and phrases will help make things easier.
Glossary of Insurance Terms:
Agent
An agent is a representative of an insurance company who is licensed to sell insurance policies.
All-Perils Coverage
An all-perils policy covers almost anything; although there are often stated exceptions that the policy won’t cover. All-perils is sometimes called an open perils or all-risk policy. Counter to this, a named perils policy only covers what it specifically mentions. For instance, if the policy is specifically for fire damage, it won’t provide coverage for a flood.
Benefit Period
Benefit period is the span of time during which you can receive long-term disability benefits.
Broker
A broker is an independent insurance professional who represents a number of insurance companies. They can compare quotes from multiple companies to find the best insurance policy for your needs.
Cancellation
Cancellation is the act of terminating your insurance policy before the end of the benefit period.
Cash Value
This refers to that portion of your policy that accrues interest. It may be accessed for withdrawal or borrowing if you need it.
Claims
Claims are requests for payment from your insurance company if you suffer a loss.
Contingent Beneficiary
A contingent beneficiary is a person designated to receive the benefits of your insurance policy if your primary beneficiary dies before you.
Co-pay
Co-pay is a fixed amount you pay for covered medical services, such as a prescription.
Coverage
Coverage describes the specific kinds of types of services, care, or events that your insurance policy protects you against. For example travel insurance provides coverage for trip cancellation or lost luggage.
Deductible
A deductible refers to the amount of money you’ll pay before your insurance coverage takes over.
Direct Billing
Direct billing is when the insurance company pays your healthcare provider directly for covered services. For example if you go to the dentist and have 70% coverage, you will pay 30% and your dentist will direct bill the insurance company for the remaining 70%
Disability Insurance
Disability insurance provides financial protection if you are unable to work due to a disability caused by illness or injury.
Exclusions
Exclusions are events or losses that are not covered by your insurance policy.
Group Insurance
Group insurance is health insurance coverage that an organization purchases for all of its employees or members. They essentially buy in bulk to reduce cost.
Health Insurance
Health insurance is insurance that provides coverage for medical expenses as well as a number of health care services like eye care and prescriptions.
Life Insurance
Life insurance provides a financial benefit to your beneficiaries in the event of your death.
Premium
A premium is the amount of money you pay to an insurance company for an insurance policy. It’s often a consistent amount each month.
Reinsurance
Reinsurance is insurance for insurance companies, to help them transfer some of the risk they assume by providing insurance to others.
Underwriting
Underwriting is the process the insurance company takes on to determine the size of the risk; the insurance premium is based on this risk assessment.
Waiver of Premium
A waiver of premium is included in some insurance policies. It waives your premium payments in the event you become disabled.
Learn more about Ontario Blue Cross health insurance.