When going about shopping for the right policy or making sure your policy protects you in the ways you need, it is important to understand insurance terms used. In educating yourself about the legal jargon employed by the insurance companies, you can be better prepared to combat an unfair claim payment or prevent your policy from being hijacked by vague language.
Below, courtesy of the University of Illinois, is a glossary of insurance terms, ranging from the letter D to F:
Deductible. The amount of covered charges an individual must pay before the insurance company begins payments. Insurance company can only require individual to pay 50% of the basic health services.
Depreciation. The decrease in the value of the property due to use, deterioration, or the passage of time.
Disability. Physical or mental handicap resulting from sickness or injury. It may be partial or total.
Disability income insurance. Insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury, or disease.
Discharge planning. Under managed care, facilitates the transfer of a patient to a more cost-effective care facility after it is deemed that the patient no longer needs to remain in the hospital.
Dividend. A return of part of the premium to policyholders of insurance from a participating company when earnings exceed costs.
Double indemnity. An insurance policy clause that pays the beneficiary double the actual value of the contract in case of accidental death.
Dread disease insurance. A health insurance policy that protects against medical expenses resulting from a certain dreaded disease such as cancer.
Eligibility period. A specified length of time, frequently 31 days, following the eligibility date during which an individual member of a particular group is eligible to apply for insurance under a group life or health insurance policy without a medical exam.
Elimination period. The period of time before insurance benefits begin. Endorsement. A policy feature that increases the coverage of a standard insurance policy.
Endowment insurance. A plan of life insurance that pays a definite sum of money to the policyholder after a specified number of years. If the policyholder dies before the end of that time, the policy pays a beneficiary.
Exclusions. Specific conditions or circumstances listed in the policy for which the policy will not pay claims or benefits.
Face amount. The amount that a life insurance policy will pay at death or when the policy matures.
FAIR Plan. A program to provide homeowners insurance coverage to individuals who have been refused coverage by at least three insurance companies.
First-dollar Coverage. A hospital or surgical policy with no deductible.
Floater endorsement. An addition to a policy that adds coverage for specific personal property item(s) that are movable (such as jewelry).
Free-look period. The time you have to look at a policy and return it to the insurer for a full refund.
Full replacement policy. A homeowners policy that pays to replace, rebuild, or repair damaged property at the cost of replacing the property (up to the policy maximum).