Risk
Chance of loss from an event that cannot be entirely controlled.
Emergency savings
At least six months of expenses set aside to cover costs of unexpected expenses.
Insurance
A financial product purchased by many people facing a similar risk to protect against the risk of larger losses.
Policy
A contract between the insurance company and the insured that states the exact terms of the policy.
Coverage
The risks covered and amount of money paid for losses under an insurance policy.
Policyholder
Person who owns the insurance policy.
Premium
Money paid to purchase the policy.
Claim
A formal request to an insurance company asking for a payment when the policyholder has an accident, illness or injury.
Deductible
The out-of-pocket money paid by the policyholder before an insurance company will cover the remaining costs attributed to the loss.
Co-insurance
Requires the insured individual to pay a fixed percentage of the loss after the deductible has been paid.
Employee benefits
Products or services that add extra value for employees beyond earned wages.
Liability insurance
Payment to others if a member of the insured household accidentally causes harm to other people or property.
Property insurance
Payment to insured person if his/her property is damaged or destroyed by an accident.
Automobile insurance
Payment for liability and property insurance on a vehicle.
Homeowners insurance
Payment to cover liability losses and damage/loss of home structure and its contents.
Renters insurance
Payment for damage/loss of property in a rental unit in addition to liability losses.
Life insurance
Payment to beneficiaries who were named by the insured person.
Beneficiary
Someone who receives money if an insured person dies.
Dependent
Someone who relies on someone else for income and care.
Actuary
Has advanced math training (probability and statistics). He or she calculates the risks based on loss percentages and determines insurance rates and premiums.
Underwriter
Employee of an insurance company who evaluates risk and assigns premium amounts. Age, gender and health are key factors they use to determine risk.
Insurance Agent
A representative of an insurance company who sells insurance contracts (policies) and provides customer service. He or she must be licensed by the state in which a policy is sold.