Insurance: main concepts to know
Just reading a contract, insurance jargon can seem obscure. However, it is essential to be well informed of the meaning of the terms used, otherwise you will not understand the subtleties. To avoid this, here are the main specific terms and their definitions:
risk: this is the fundamental element of any insurance contract. It designates the event against which we wish to protect ourselves when taking out the contract. For it to be guaranteed, the risk must meet three conditions: be future, be uncertain and be independent of the insured's control. The risk covered when signing a contract may change over time (change in professional or personal situation). If your insurer believes that it is facing an increased risk, it has the right to modify the contract and increase the premium. If, on the contrary, your risk decreases, you can ask to review the amount of the premium and the guarantees of the contract.
the deductible: this refers to the part of the damage remaining payable by the insured in the event of a claim. Thus, in the event of a deductible set at € 700, the insured will only be reimbursed for expenses incurred in excess of this amount.
the waiting period: this designates the period during which the insured will not be compensated. The most telling example is that related to Social Security: a waiting period of 3 days is provided during which, in the event of illness, the insured will not receive compensation. The elimination period must be exceeded for the insurance to work and for the guarantees to be valid. Please note: although in some cases the waiting period begins on the date the contract is signed, it is sometimes associated with the date of the loss. Each insurance freely setting its waiting periods, it is your vigilance when signing your contract.
beneficiaries: people who can benefit from the insurance contract. Thus, it is above all the signatory but it can also include his or her spouse, children or another designated person, according to the criteria defined in the contract.
the insurance policy: corresponds to physical proof that an agreement has been entered into between an insurer and an insured. It generally refers to the contractual document signed by both parties.
the bonus-malus: calculation system for defining the risk assessment. As the name suggests, this refers to an increase or decrease in the amount of the premium, depending on the history of the insured. Mainly used for auto and motorcycle insurance, this concept is based on the behavior of the insured while driving. The more the insurer considers that it takes risks in covering a person, the higher the premium will be. Conversely, if no loss occurs during a certain period, you may benefit from a reduction (= bonus) in your premium.
the contribution: also called premium, this term refers to the amount paid by the insured in return for the guarantees taken out. Monthly or annual, the contribution is what you must pay to your insurer to benefit from the coverage provided for in your contract.
loss: refers to any situation for which your insurer has undertaken to cover you. This is the event that triggers the deployment of your guarantees.
the insurance product: the expression is used by insurance professionals to designate the contracts that they market and that they wish to sell to their prospects. Thus, all the insurance policies that revolve around us on a daily basis are for the insurers of the products: home insurance is one, as are mutual health insurance, travel insurance, etc.
Are you planning to travel or expatriate abroad and wondering what insurance to take out? Our insurance sheets by country are here to help you travel safely:
Japan Insurance
Insurance Morocco
Insurance India
Insurance Spain
Insurance Italy
Insurance Netherlands
Insurance New Zealand
Korea Insurance
Insurance Brazil
Insurance Sweden
Insurance Germany
Insurance United States
Insurance Mexico
Insurance Portugal
Insurance Ireland
Insurance Belgium
Insurance Tunisia
Insurance Thailand
Iran Insurance
Indonesia Insurance
Vietnam Insurance
Insurance Algeria
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