Insurance
Insurance Glossary
The vocabulary insurers use, defined in plain language. These definitions are for orientation only — the wording inside your own policy document always governs what a term means in practice.
- BeneficiaryWho receives the payout
- The person or entity nominated to receive proceeds from a policy, most commonly under life cover.
- ClaimA request for payment under a policy
- A formal request to the insurer for payment after an insured event, subject to notification deadlines and evidence requirements.
- CoverageWhat the policy responds to
- The set of events, losses, and liabilities a policy agrees to pay for, defined together with its limits and exclusions.
- DeductibleThe share you pay per claim
- The amount the policyholder covers before the insurer pays anything on a claim. Also called an excess in some markets.
- EndorsementA written change to a contract
- An amendment that adds, removes, or varies terms in a base policy, read together with the original wording.
- ExclusionWhat is not covered
- A situation, cause, or item a policy explicitly does not pay for.
- IndemnityRestoring the pre-loss position
- The principle that an insurance payout returns the insured to the financial position held immediately before the loss — no better and no worse.
- PolicyThe insurance contract itself
- The written contract between the insured and the insurer, comprising the schedule, the general terms, and any endorsements.
- PremiumWhat you pay for cover
- The amount charged by the insurer for a policy, usually stated per month or per year, reflecting the insurer's assessment of risk, its expenses, and applicable taxes or levies.
- UnderwritingHow risk is assessed and priced
- The insurer's or lender's process of assessing an application, sorting it into a risk group, and setting terms and price accordingly.
Important information
Legamoney publishes informational content only. Definitions vary between insurers, products, and jurisdictions, and nothing here is insurance advice or a recommendation to buy, change, or cancel cover. Read our editorial policy and full disclaimer.