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Insurance Policy - Meaning - Life Insurance
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Insurance Policy – Meaning

Insurance policy is a contract of insurance. It describes the term, coverage, premiums and deductibles. In insurance, the insurance policy is a contract (generally a standard form contract) between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for payment, known as the premium, the insurer pays for damages to the insured which are caused by covered perils under the policy language. Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts.

Since insurance policies are standard forms, which is similar across a wide variety of different types of insurance policies. The insurance policy is generally an integrated contract because it includes all forms associated with the agreement between the insured and insurer. An insurance policy is a legally binding contract between an insurance company and the person who buys the policy, commonly called the “policyholder”, who also is often the person insured. In exchange for payment of a specified sum of money, called the “premium”, the insurance company agrees to pay for certain types of loss or damage as specified by the contract. When a loss occurs which meets all of the requirements described by the terms of an insurance policy, the loss is said to be “covered” by that policy. The term insurance policy refers specifically to the written contract.

You probably have other documents that may or may not offer you additional rights, including your application, any correspondence from the insurer, summary plan descriptions (for disability and medical insurance), and your declarations page.

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