Insurance fraud has always been a major issue in the United States. Insurance fraud is the act of misusing insurance or reporting untruthful claims. Some people fall victim of insurance fraud scandals without even knowing they’re involved. There are certain ways to protect yourself from insurance fraud. But first, you need to understand insurance.
 
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Insurance Terms

Many people are unclear about the exact definitions used in insurance companies. Although you might think that it is unimportant, it is important that you educate yourself on how insurance works before picking an insurance plan. Some plans offer a low premium, but a high deductible…is this something that would interest you? If you are young, healthy and have a low income, this pay be the insurance for you. However, you may not know this if you are not knowledgeable about the terms used commonly with regards to insurance.


Insurance Policy - The written statement that outlines all conditions of your insurance. This should be carefully looked over, often by a third party. Particularly life insurance policies should be looked over by a lawyer to make sure they are filled out and will be given out properly upon any death.

Premium - The premium is the flat amount that you are making each month (bimonthly, annually or semi annually). It can be seen as your payment to the insurance company, or the amount that you owe them to stay covered.

Deductible - The deductible is an agreed amount that you must pay if something happens. Sometimes the deductible is represented as a percentage. For instance, if you have incurred $1000 in medical bills and your deductible is 10% you would be required to pay the first $100. You can also have a flat amount that you will be required to pay. This is often used with car loans. For example your deductible may be $500 meaning that if something happens to your car you will be required to pay the first $500 (no matter what the cost of the repairs were)

Familiarizing yourself with these three common terms will help you understand the insurance process better. By understand what insurance policies, premiums and deductibles are, you can better pick out an insurance policy that is good for you.