Insurance glossary

A–D

• Beneficiary — the person or entity who receives the payout from a life insurance policy.
• COBRA — a federal law that lets you continue employer health coverage for up to 18 months after leaving a job. You pay the full premium.
• Co-insurance — the percentage of a medical bill you pay after meeting your deductible (e.g., you pay 20%, insurance pays 80%).
• Co-pay — a fixed amount you pay for a specific medical service ($25 for a doctor visit, $50 for a specialist).
• Deductible — the amount you pay out of pocket before insurance starts covering costs.

E–P

• Exclusion — a condition, treatment, or event that your policy specifically does not cover.
• HDHP (High Deductible Health Plan) — a health plan with a higher deductible but lower premiums, eligible for an HSA.
• HMO (Health Maintenance Organization) — a health plan requiring a primary care doctor and referrals for specialists. Usually cheapest.
• Liability coverage — insurance that pays for damage you cause to others (auto, homeowners).
• Out-of-pocket maximum — the most you'll pay in a year for covered services. After this, insurance covers 100%.
• PPO (Preferred Provider Organization) — a health plan with more provider flexibility and no referral requirement. Usually more expensive.
• Premium — the monthly amount you pay for insurance coverage.
• Pre-existing condition — a health condition you had before buying insurance. ACA prohibits denying coverage or charging more.

R–U

• Rider — an add-on to an insurance policy that provides additional coverage for a specific situation.
• Term life insurance — life insurance that covers you for a fixed period. Cheapest form of life insurance.
• Umbrella insurance — extra liability coverage above the limits of your auto and homeowners policies.
• Underwriting — the process an insurer uses to evaluate your risk and set your premium.
• Universal life — permanent life insurance with a savings component. More flexible than whole life, but complex.
• Whole life insurance — permanent life insurance with a cash value component. Much more expensive than term life.