Insurance policy
Insurance Policy
An Insurance Policy (pronunciation: /ɪnˈʃʊərəns ˈpɒlɪsi/) is a contract, generally represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.
Etymology
The term "Insurance Policy" is derived from the Middle English word 'ensurance', which means "making safe", and the Latin word 'politia', which means "contract" or "policy".
Types of Insurance Policies
There are several types of insurance policies including:
Each type of insurance policy has its own set of complexities that require understanding before purchasing.
Related Terms
- Premium: The amount the policy-holder pays to the insurance company to cover the perceived risk.
- Deductible: The amount the policy-holder must pay out-of-pocket before the insurance company pays a claim.
- Claim: A formal request by a policy-holder to an insurance company for coverage or compensation for a covered loss or policy event.
- Underwriting: The process by which an insurance company evaluates an applicant's risk and determines the premium that the policy-holder will be charged.
External links
- Medical encyclopedia article on Insurance policy
- Wikipedia's article - Insurance policy
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