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Finance 6.05
Types of Insurance
| Term | Definition |
|---|---|
| Automobile Insurance | Provides payments for both liability and property insurance on a vehicle. |
| Beneficiary | Someone who receives money if an insured person dies. |
| Claim | A formal request to an insurance company asking for a payment when the policyholder has an accident, illness, or injury. |
| Co-insurance | Requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid. |
| Coverage | The risks covered and amount of money paid for losses under an insurance policy. |
| Deductible | The out-of-pocket money paid by the policyholder before an insurance company will cover the remaining costs attributed to the loss. |
| Dependent | Someone who relies on someone else for income and care. |
| Disability Insurance | Provides payment to replace earnings during times when workers cannot work due to illness or injury. |
| Emergency savings | Cash set aside that can be used to cover the costs of unexpected events. |
| Employee benefits | Employers may offer employee benefits in the form of products or services that add extra value for employees beyond earned wages. |
| Health Insurance | Provides money to pay for health care for illness, injury, or, in some cases, preventive care. |
| Homeowners Insurance | Provides payment to cover liability losses as well as damage and loss of the home structure and its contents. |
| Household production | Doing something in the home without pay that takes raw materials along with a family member's skill, experience, knowledge, and household equipment, to produce a useful product or service. |
| In-kind income | The donation of a product or service in place of cash. |
| Insurance | A financial product (called an insurance contract or policy) purchased by many people facing a similar risk to protect against the risk of larger loss. |
| Liability Insurance | Provides payment to others if a member of the insured household accidentally causes harm to other people or property/ |
| Life Insurance | Provides payment to beneficiaries who were named by the insured person. |
| Long-term care insurance | Provides payment for extended nursing care due to accidents, illness, or old age. |
| Moral hazard | When the act of insuring an event increases the likelihood that the event will happen. |
| Policy | A contract between the insurance company and the insured that states the exact terms of policy including the what risks are covered and how much will be paid for any losses. |
| Policyholder | A person who owns the insurance policy. |
| Premium | The money paid to an insurance company to purchase a policy. |
| Property insurance | Provides payment to the insured person if his or her property is damaged or destroyed by an accident covered by the insurance policy. |
| Renters insurance | Provides payment to renters to cover the damage and loss of property in a rental unit in addition to liability losses. |
| Risk | The chance of loss from an event that cannot be entirely controlled. |
Created by:
Tou Xiong
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