Language of Insurance
In medicine, there is a specific language. A way of talking that is different than any other profession. And other areas have their own language as well. Here are some of the words you might hear when you start talking insurance:
Underwriting – This is the process by which the people giving you the insurance are using to determine if they think you are a risky applicant. Depending on the type of insurance you are getting, they use different factors. For example, for car insurance they want to see if you have had speeding tickets, any accidents and other things that may indicate to them that there is a high probability for claim so they will charge you more. The same thing happens with life, critical illness and disability insurance. The factors that they look at are different with each.
Face Amount – this is the amount of insurance you buy.
Illustration – this is the quote that you get to show the price and how the insurance works and what it covers amount other things.
Exclusion – this is when the insurance company has decided that certain things may be too risky for them to cover but they are okay with the rest. An example is for my critical illness insurance, I have an exemption for breast cancer due to family history. So it will cover me for all other kinds of cancer.
Premium – is the amount you pay for the insurance – it could be charged monthly or annually.\\
Rating – If the company decided that a certain thing is risky about you, but not enough to exclude it they may ask for extra premium to cover that risk.
Property and Casualty – you may hear this referred to as P&C insurance – this is coverage for your home or apartment (contents) and your vehicle. I always recommend that if you rent that you have tenant’s insurance so that if you lose everything in a fire/flood etc. you can replace everything.