Insurance can be a complicated industry. Not only is the product confusing to many people, but policies are filled with jargon and insurance-specific terms. This language of insurance can be overwhelming for people as they struggle to learn what insurance terms mean.
But as their agent, you can help your senior clients understand insurance jargon. Read on to learn about common insurance terms your clients should know, then contact us at American Senior Benefits for more details.
Common Insurance Terms Your Senior Clients Need To Know
Here is a list of common insurance terms your clients should know:
An agent is an individual who sells insurance to consumers. Agents can be independent, selling policies for many different carriers, or they can be captive agents working directly for one insurance company. Independent agents have more flexibility since they can help their clients find the best rate and policy from many different carriers.
A person named in a life insurance policy as the beneficiary receives the policy benefit. A life insurance policy may have more than one beneficiary. A trust or estate may also be named the beneficiary.
A claim is a request for payment made against the insurance policy when a covered loss happens. In life insurance, a claim is made when the insured individual dies. In auto accidents, a claim can be made by the insured or the claimant after a car accident.
The first page of an insurance policy, the declarations page — or dec page — lists important information about the policy and the insured individuals, including names, addresses, details of insured property, and coverage limits.
The deductible portion of an insurance policy is the amount the insured retains if there is a claim. An insured who has a deductible of $500 will pay the first $500 of a claim they make before the insurance company begins making payment. Insureds can select their deductible but should make sure they can afford the amount if an accident happens.
Indemnity is an important insurance concept. It means a policyholder filing a claim should be restored to their pre-accident status, or made whole again, after suffering covered damages. It is an important legal principle that a policyholder does not benefit from filing an insurance claim, but rather they are returned to the condition they were in before the accident.
Policy Conditions and Exclusions
Every insurance policy has policies and exclusions the insured individual must follow to gain coverage under the policy. As their agent, you can help your clients read their policies to understand how to obtain coverage. For example, many policies exclude intentional acts and, in many policies, a condition of coverage is reporting the loss timely. You and your clients should understand the policy conditions and exclusions that affect their coverage.
Subrogation is when an insurance company can recover monies it paid out due to a claim. Not every claim has subrogation potential. Insureds should understand their insurance company will try to recover what it has paid for a claim if there is a liable party, and policyholders have a duty to assist with this recovery.
You can rely on resources like the NAIC and your carrier partners for glossaries and definitions to add to your list. Be sure to explain these insurance-specific terms to your senior policyholders in plain language everyone can understand.
How Do I Learn More?
To learn more about common insurance terms your clients need to know, contact us at American Senior Benefits. Our affiliated experts will be happy to answer any questions you have.