• Whether you are interested in purchasing auto, health, life or homeowner's insurance, you will come across specific terms as you research and enroll in an insurance policy. If you are new to the world of insurance, you may not recognize all of the terminology. In order to choose the best type of policy for you and to understand your rights as an insurance consumer, it's helpful to know some key terms.
  
  

Agent

• An insurance agent represents one or many insurance providers and is responsible for selling insurance contracts. According to the Bureau of Labor Statistics, insurance agents are required to hold a license to sell insurance in their state. They also are expected to understand the insurance industry and available products in order to make an appropriate recommendation to meet your needs.
  
  

Policy

• An insurance policy is the contract between the insured and the insurance company. Once you enroll in a specific insurance plan, you will be provided with a copy of your insurance policy. The policy spells out all the terms of your insurance contract, such as the premium costs, the premium due date and the level of coverage that you will receive.
  
  

Accidental Death and Dismemberment

• Accidental Death and Dismemberment (AD&D) insurance can be purchased as a stand-alone policy or as a rider to life, health and other insurance policies, explains Insurance.com. AD&D insurance pays the insured or the beneficiary of a policy in the case of death or severe bodily injury, such as loss of a limb due to an accident.
  
  

Beneficiary

• The beneficiary of an insurance policy is the individual or persons who will receive a payout from the insurance company if an insurance claim is filed. Aetna.com notes that a beneficiary can be a person such as a spouse or child, or an entity such as a church or charity. Beneficiaries most often are designated for life insurance policies.
  
  

Claim

• According to the A.M. Best website, a claim is a request for payment to be made to cover the cost of an event or service that is covered under the terms of the insurance contract. Depending on your level of coverage, you can file an auto insurance claim to pay for damages that resulted from an accident. Covered health insurance claims may cover the cost of doctor visits, hospital care and prescription medications.
  
  

Deductible

• The deductible is the amount that a policyholder is responsible to pay before an insurance company will cover the cost of a claim. CarInsuranceRates.com notes that choosing a lower deductible amount often results in higher premium costs. A higher deductible can translate to lower insurance premiums, but the amount of the deductible may be a burden to some policyholders.
  
  

Premium

• The insurance premium is the monthly, quarterly or yearly fee that is charged to keep an insurance policy active. Premiums may change from year to year, and many insurance companies offer flexible payment options.