Insured
The person or entity whose life, health, property, or interests are covered by an insurance policy. The insured is the individual or organization that receives protection against specified risks in exchange for premium payments.
Example
“As the insured on her auto policy, Maria must notify her insurance company within 24 hours of any accident involving her vehicle.”
Memory Tip
Remember 'Insured = I'm Secured' - the insured is the one who gets security and protection from the insurance policy.
Why It Matters
Understanding your role as the insured is crucial because it determines your rights, responsibilities, and the coverage you receive. Being clearly identified as the insured ensures you can file claims and receive benefits when covered events occur.
Common Misconception
People often confuse 'insured' with 'beneficiary,' thinking they're the same thing. The insured is the person covered by the policy, while the beneficiary receives the benefits. Also, some assume the insured is always the policyholder, but someone else can own a policy on your life.
In Practice
Tom is the insured on a $250,000 term life insurance policy that his wife owns and pays $300 monthly premiums for. If Tom dies, his wife (the beneficiary) receives the $250,000 death benefit. However, Tom as the insured had to take a medical exam and answer health questions when the policy was purchased, and any health changes must be reported to maintain coverage.
Etymology
From Latin 'securus' meaning 'free from care' or 'safe,' evolving through Old French 'aseurer' to describe one who is made secure through insurance coverage.
Common Misspellings
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Related Terms
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See Also
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