Insured
The person or entity whose life, property, or interests are covered by an insurance policy. This is the individual or organization that the insurance policy is designed to protect against specified risks or losses.
Example
“As the insured under her auto policy, Maria was covered when her car was damaged in the hailstorm, even though her husband was driving at the time.”
Memory Tip
The insured is the one who is 'ensured' protection - they're the person or thing being protected by the policy.
Why It Matters
Understanding who is considered the insured is crucial because it determines who has coverage rights and responsibilities under the policy. Misunderstanding this can lead to denied claims or gaps in coverage when you think you're protected but aren't.
Common Misconception
People often confuse the insured with the policyholder or beneficiary, thinking they're always the same person. In reality, the insured is specifically the person or property being protected, while the policyholder owns the policy and the beneficiary receives benefits.
In Practice
Tom purchases a $500,000 life insurance policy on himself, making his wife the beneficiary. Tom is both the policyholder (owns the policy) and the insured (his life is covered). When Tom dies, his wife receives the $500,000 death benefit because she's the beneficiary, even though she was never the insured person under the policy.
Etymology
Derived from the Latin 'securus' meaning 'free from care,' with the prefix 'in-' meaning 'into,' literally meaning 'put into security' or 'made secure.'
Common Misspellings
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See Also
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