Insurance, explained
Plain-language definitions of common insurance terms, in English and Vietnamese.
Insurance comes with a lot of jargon. Here are the words you'll run into most often, each with a short explanation of what it actually means. Search for a term, or browse by topic.
Insurance basics22
Premium
The amount you pay for an insurance policy, usually monthly, every six months, or once a year.
Policy
The contract between you and the insurance company. It explains what is covered, what is not covered, and the limits.
Deductible
The amount you pay yourself before insurance starts paying for a covered claim.
Coverage
The protection provided by your policy, including what risks are covered and how much the company may pay.
Claim
A request for the insurance company to pay after a covered accident, loss, or damage.
Quote
An estimate of what a policy may cost based on the information provided. A quote is not a guarantee of coverage.
Types of coverage30
Liability coverage
Pays for injuries or property damage you cause to other people when you are legally responsible.
Bodily injury liability
Auto liability coverage that pays for injuries to other people when the insured driver is legally responsible for an accident.
Property damage liability
Auto liability coverage that pays for damage to another person's vehicle or property when the insured driver is legally responsible.
Collision coverage
Auto coverage that pays to repair or replace your own vehicle after a crash with another vehicle or object.
Comprehensive coverage
Auto coverage for damage that is not a collision, such as hail, theft, fire, vandalism, or hitting an animal.
Uninsured motorist coverage
Helps protect you when the driver at fault has no insurance.
Health & Medicare8
Marketplace (ACA)
The health insurance marketplace where individuals and families can buy plans and may qualify for help paying premiums.
Subsidy
Financial help, often based on income, that lowers health insurance costs.
Enrollment period
The window of time when you can sign up for or change a health or Medicare plan.
Premium tax credit
Marketplace financial assistance that helps eligible households lower health insurance premium costs.
Cost-Sharing Reduction
Extra savings available only on eligible Marketplace Silver plans that can reduce deductibles, copays, and other out-of-pocket costs.
Qualifying Life Event
A major life change, such as losing coverage, getting married, having a baby, moving, or income changes, that can open a Special Enrollment Period.
Life & business30
Term life
Life insurance that covers you for a set number of years, such as 10, 20, or 30.
Whole life
Permanent life insurance designed to last for your whole life and build cash value over time.
Beneficiary
The person or organization named to receive the payout from a life insurance policy.
Primary beneficiary
The first person or organization in line to receive a life insurance payout.
Contingent beneficiary
A backup beneficiary who receives the payout if the primary beneficiary cannot receive it.
Annuity
A contract with an insurance company designed to create income, often for retirement.
People & process25
Independent agent
An agent who represents several insurance companies and can compare options instead of selling for only one company.
Underwriting
How an insurance company reviews risk to decide whether to offer coverage and at what price.
Binder
Temporary proof of coverage that keeps insurance in place until the full policy documents are issued.
Endorsement
A change or addition to a policy already in force, such as adding a driver or changing coverage.
Declarations page
The policy summary page listing the named insured, coverages, limits, deductibles, premium, vehicles or property, and policy dates.
Insurance ID card
Proof of auto insurance that can be kept in the vehicle or shown when requested.
Still have a question?
If a term or a policy still doesn't make sense, just ask. We're glad to explain it in plain language, in English or Vietnamese.