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Insurance Glossary: What are Coverage, Deductible, and Premium?
Do you feel like you are reading a foreign language when reading your policy? Mastering insurance jargon ensures you get the right product at the right price. Here are the 3 most basic concepts you need to know.
Basic Terms
- Premium: The fee (monthly or annual) you pay to the company in exchange for insurance protection.
- Coverage (Face Value): The total amount the insurance company will pay to beneficiaries when the risk occurs (death, accident, etc.).
- Deductible (Exclusion): Situations where the policy does not pay or the part of the damage that must be covered by you.
Frequently Asked Questions
What does beneficiary mean? ▼
The person who will receive the insurance compensation (spouse, child, etc.).
What is the policy term? ▼
The period during which insurance protection is valid (e.g., 10 years, 20 years).
What is an endorsement? ▼
An additional document showing changes made to the existing policy.