As the holder of an insurance policy, for example a car insurance policy, you will file a claim with the insurance company when your car is damaged or stolen. The amount of money that the insurance company will pay out to you is called the benefit. The benefit can either be defined as a payment made or an entitlement available in accordance with an insurance policy agreement. If your car is damaged for example, the benefit to which you are entitled will be to have the car repaired.

In the case of damage or theft the benefit will be paid to you as the beneficiary. A beneficiary can also be a third party in the case of life assurance should the insured die. You will nominate someone as the beneficiary when you take out the insurance policy.

Where the car was bought through arranged finance the bank or car financier must first be paid the full amount due to them. Should any benefit remain, this will be paid to the policy holder.

The benefit period is the length of time during which benefits will be paid to the insured for the specific loss covered. If you take out disability cover and the benefit period is six months, you will receive the benefits for only six months.