Insurance Terminology 101

May 3, 2023 1:56:58 PM

Insurance helps protect you and your property from the great cost of real-world dangers, such as home fires, natural disasters, and automobile accidents. However, navigating the world of insurance can be overwhelming. This article will provide you with a quick and easy run-through of important insurance terminology.

The Basics

A premium is the price you pay for your insurance policy. Payments are usually made in monthly.

Given the information you provided and the policy you selected, a quote is an estimate of the policy premium.

The deductible is the amount of money you must pay yearly for your plan before your insurance covers anything at all, or “kicks in”.

A co-payment is the set amount of money you must pay for the covered services.

Your co-insurance is the percentage of the expenses that you share with your insurance company after meeting your deductible.

The out-of-pocket maximum is a limit on the amount of money you pay for care within a time frame. Your insurance usually takes care of 100% of the costs once you have reached this threshold. This is dependent on policy terms, however.

An insurance rider is an add-on made to an insurance policy for an additional price. This is usually done when the original terms do not adequately cover an item or cover it at all. You may choose, for example, to add a family heirloom to your policy. This is, at times, known as “scheduling an item”—an additional item onto the policy.

Exclusions are the terms included in an insurance policy that excludes the coverage for certain items, class of items, acts, types of damages, etc.

Types of Insurance

A life insurance policy will guarantee a certain amount of money to at least one indicated beneficiary when the policyholder dies. For more information, click here and here.

Many states require automobile insurance to legally register your car. These policies can serve to cover personal bodily injuries, bodily injuries done unto others, property damage, etc.

In the case of unforeseen circumstances or disasters, home insurance covers the cost of damage to your property, personal items, assets, etc. To find out more about home and auto insurance, click here.

Accidental death and dismemberment (AD&D) insurance is usually a rider to a life insurance policy. It covers the accidental death or dismemberment of the policyholder, such as the loss of a limb, sense organ, etc. Click here to find out more about AD&D.

Similar to home insurance, renter’s insurance will protect your personal belongings in the case of theft, fire, or any other catastrophic incident. Click here to find out more about it.

What Next?

The Harvard University Employees Credit Union offers a variety of insurance services, including the ones mentioned in this article. Get an instant online quote today at or call 1-88-TRUSTAGE and talk to a licensed agent to discuss which policies would best suit you!

Tags: Insurance