Often mandatory, a type of liability insurance that pays for harm you do to someone else’s car or property when you cause an accident. Sometimes known as third-party coverage, property damage provides compensation for those not at fault in an accident. When the person files a claim, the insurance company will try to determine if … Read more
The difference between what you pay for a life insurance policy and what it ends up costing you. Cash value and dividends reduce the cost of life insurance below the premium amount. However, if you purchase a policy that doesn’t return any earnings or other value to you, the cost of your policy equals the … Read more
The portion of an insurance premium, paid in advance, that represents the expired part of the policy period. The insurance company has “earned” this portion of the premium, as it provided protection during a particular coverage period, yet no insurance claims were filed against that amount. This is why it is known as premium earned. … Read more
The amount charged by an insurance company, usually either annually or semiannually, in exchange for insuring the policyholder. Insurers base premium price on statistics, in addition to individual habits and history. Policyholders who are younger, more inexperienced, live in high-risk areas, smoke or drive expensive cars pay higher insurance premiums than those who don’t—regardless of … Read more
A managed-care insurance plan that provides medical services to policyholders at discounted rates, allowing them to go either in or out of network and perform self-referrals for specialty care, as needed. PPOs generally provide reimbursement at around 90 percent for in-network services and 60 to 70 percent for out-of-network care. Out-of-pocket expenses are usually capped … Read more
A type of health insurance policy that offers participants the opportunity to choose between in-network and out-of-network care when medical treatment is needed, and coordinates general and specialist care through a primary care physician. The point of service plan pays a percentage of the cost of services, up to a reasonable and customary limit, and … Read more
Covers medical expenses, lost wages and other damages that result from an accident—no matter who is at fault. PIP covers the policyholder, anyone else living in the home and their children, as well as non-related passengers and pedestrians harmed in the accident. Benefits include: Up to $10,000 for medical expenses on each individual injured for … Read more
Refers to property and casualty insurance products designed for and purchased by individuals to protect what they own. Personal lines insurance is generally divided into five categories, including automobile, homeowners, accident and health, general liability and financial or pecuniary loss. These types of individual coverage are usually purchased separately under their own plan, though buying … Read more
A specific risk or cause of loss covered by an insurance policy. Examples of home peril include wind, flood, fire and theft. Some home insurance plans, called “named peril” policies, cite specific perils covered. As long as an incident occurs that’s listed by name within the policy, the insurance company pays the policyholder for the … Read more
The percentage of individuals, employees or families insured under a particular insurance policy, as compared with the total number eligible to participate. When plan involvement is voluntary, the participation rate tends to vary based on individual and personal factors and preferences, as well as the level to which employers contribute to insurance premiums. Employer-funded plans … Read more