Insurance benefits is basically a broad term that describes the many features that provide different areas of coverage and payouts for a policy holder.
The payout made by an insurance company to a beneficiary is the benefit.
In most cases, it is only mentioned simply as benefits rather than insurance benefits.
In practice benefits is a term that can be loosely used to refer to all the features present in an insurance policy, including those without an expressed monetary value.
For example, the benefits of a typical basic travel insurance policy might include:
- Medical expenses
- Personal accident
- Emergency assistance
- Travel delay
- Baggage delay
Premiums for all types of policy plans typically increase with more types of benefits or with higher coverage of the same benefits.
Comparing insurance plans with benefits
The most common way to choose between which tier of an insurance policy to sign up for is to compare them with the benefits that each provide.
The internet has made this process so convenient these days.
Anyone can easily access details of different tiers of the same policy with a summary of benefits that list the feature of each plan side-by-side with each other.
If your decision is fully based on numbers, choosing a plan after scrutinizing the different amount of coverage for each benefit should be easy.
The difficult part if when choosing which insurer to go with.
This is because different insurance company use different names for their policy offerings for marketing reasons to differentiate themselves from each other.
In addition to that, they might use different words and terms to label the same type of benefits.
It’s no exaggeration to say that a type of insurance such as travel insurance basically consist of 99% the same types of benefits between different insurers.
The main differences between them are how they name them, how they categorize them, and the amount of coverage that is offered.
A big factor for how consumers decide for one over another would them be strongly down to what types of words have the clearest communication towards certain profiles of customers.
What terms and words causes the least confusion.
For example, some people might find the benefit for “baggage delay” to vague and cannot be sure whether it encompasses lost baggage. Then they choose another insurer as the benefit for “lost baggage” is clearly stated in the summary of benefits.
However, while benefits play a critical role in a person’s decision criteria when choosing between policies, sometimes people value other factors more heavily than the numbers.
For example, it’s common for one to choose an insurer over another due to a strong brand name that they are familiar with. This why insurers often rank their reputation as the most important aspect of long term success.
Benefits can also take a back seat sometimes when people take the ease of making claims into consideration.
For example, if one has to travel across the country to file a claim , then it could be reason enough to go with one that is more convenient.
Common confusion with benefits
Because the word “benefits” is a pretty generic term that can be used to describe the advantages of almost anything, people often confuse insurance benefits with the good reasons to buy insurance.
i.e. the benefits of buying life insurance.
As explained above, this is a term that can have different meanings when used in a different context.
Another common confusion is with employee benefits that employer provide to their staff which include group insurance. Some benefits might even include allowances for employees to purchase their own personal insurance.
When the term is used in this context, it refers to employment benefits instead of insurance benefits. Both of which describe totally different things.
One concerns perks that an employers give their employees, while another describes the details of insurance coverage.