Insurance Terminology

n   Insured: The entity who will be compensated for financial loss by an insurer under the terms specified in an insurance policy.

n   Plan Sponsor: The entity that pays the premium for an insurance policy on behalf of the insured entity. A plan sponsor can be an employer or an individual.

n   Insurer: The party that provides insurance coverage, typically, through a contract of insurance. An insurer can also be referred to as a carrier.

n   Provider: Any facility or personnel that provide medical and healthcare services. Hospitals, labs, physicians, specialists, skilled nursing facilities (SNF), day-care centers, and pharmacies are a few examples of providers.

n   Premium: The payment made to the insurance company to buy a policy and to keep it in force. This can be paid on a monthly, quarterly, or annual basis.

n   Benefits: The amount payable by the insurer to a claimant or beneficiary when the insured suffers a loss. In other words, benefits are paid in case the incident for which the insurance policy was taken occurs.

There are various types of insurance such as:

§   Auto insurance: Insures against liability you have to others in an accident, and also insures against damage that others do to your vehicle

§   Pet insurance: Insures pets against accidents and illnesses. Some companies also cover routine wellness care and burial

§   Terrorism insurance: Provides protection against any loss or damage caused by terrorist activities

§   Travel insurance: Is an insurance cover taken by those who travel abroad, which covers certain losses such as medical expenses, loss of personal belongings, travel delay, personal liabilities, and so on.

§   Property insurance: Includes specialized forms of insurance such as fire insurance, flood insurance, and earthquake insurance

§   Medical insurance: Covers financial loss due to health related risks.