Insurance often feels complicated, but most terms have simple meanings once explained. As the article says, “Insurance can often feel like a foreign language,” but learning key words helps you choose the right policy and avoid confusion.

One of the most common terms is “premium.” The article explains that a premium is “the amount you pay, usually monthly or annually, to keep your insurance policy active.” Missing payments can cause you to lose coverage. Another important word is “deductible,” which is “the portion of a claim that you are responsible for paying before your insurance starts to cover costs.” Understanding how premiums and deductibles balance helps you manage costs.

Coverage and claims are also essential to know. “Coverage refers to the protection your policy provides,” meaning what events or damages your insurer will pay for. A “claim” is simply the request you make when something happens and you need help. Exclusions, or the things your policy doesn’t cover, help set limits, such as when a homeowner’s plan “might cover fire damage but exclude floods.”

Liability and endorsements shape how customizable insurance can be. Liability applies when you are “legally responsible for harming someone else,” while an “endorsement” lets you add extra protection for valuable items or special situations. Life insurance also uses the term “beneficiary,” the person who receives the payout. Behind the scenes, “underwriting” assesses risk, and an “adjuster” reviews claims.

By learning these terms, insurance becomes less intimidating and more useful—turning confusing paperwork into a tool that protects your financial future.