Insurance Jargon Explained: 7 Words to Know
February 4, 2021
As you begin your career as a Farm Bureau agent, you’ll find that the insurance industry has its own vocabulary. It’s important that you understand insurance terms so important details don’t get lost in translation. Thankfully, Farm Bureau equips its agents with the know-how to become knowledgeable and successful insurance professionals.
Here, we cover seven common insurance jargon words you need to know to help those in your community.
An annuity is a contract providing income for a specified period of time or duration of life for a person or persons. As a Farm Bureau insurance agent, you can help fill the gaps of your client/members’ retirement income with an annuity. Annuities come in three forms — fixed annuities, variable annuities and indexed annuities — and are designed to pay a steady stream of income into the retirement years.
2. Mutual Fund
A mutual fund is an investment program funded by shareholders that trades in diversified holdings and is professionally managed. When your client/member invests in a mutual fund, they’re pooling their money with other investors to buy stocks, bonds, short-term securities or a combination of these investments. Mutual funds are affordable and can be a low-risk way to steadily build wealth over time.
The deductible is the amount of money that your client/member must pay out of pocket before Farm Bureau will pay expenses. From car insurance to homeowners insurance, there will be a deductible on the Farm Bureau insurance policies you sell.
4. Replacement Cost Coverage
Replacement cost coverage covers the cost of replacing property without deducting depreciation due to normal wear and tear. This optional coverage can replace your client/members damaged vehicle with a new vehicle of a similar model if the damaged vehicle is less than four years old. The age of the car varies by state, so make sure you confirm the age requirements for your state.
5. Umbrella Insurance Policy
Umbrella insurance provides liability coverage over and above your automobile or homeowner’s policy. In many cases, umbrella insurance is written for amounts of $1 million or more, but your client/members generally find the coverage is reasonably priced for the amount of added peace of mind that it provides.
6. Property-Casualty Insurance
Property-casualty insurance protects against property losses to a business, home or car and/or against legal liability that may result from injury or damage to the property of others. Common types of property-casualty insurance include homeowner’s and auto insurance.
A renewal is the standard length of time an insurance policy is in effect without the insurance company adjusting the rate. The renewal date of your client/members’ insurance policy is based upon the date the policy took effect (often renewed annually or semi-annually). When the renewal is up, make sure to meet with your client/members to review changes in their coverage needs. A SuperCheck is the best way to determine necessary changes in their coverage.
For more definitions, read the full glossary of insurance terms from the National Association of Insurance Commissioners.
Become a Farm Bureau Insurance Expert
As you navigate the rewarding world of insurance, refer back to this list of definitions. For more helpful tips as you start your journey as Farm Bureau agent, sign up for our newsletter!