Clarification of the term "email alias"

I currently use a third party email address as my Apple ID and I would like to change this to an alternative @icloud.com address which is designated as an alias in my account. The reason I'm doing this is because I am changing ISP and suspect I will lose my third party email address. It then occurred to me that an @icloud.com address is probably not a 'proper' email account, i.e. it does not exist on a server with in boxes, out boxes etc. and would not function without a third party account in the background. Is this correct?