Insurance Glossary

Complete Glossary of Insurance Terminology

Click on the first letter of the Term you are looking for:

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

 


 

 A

  1. AAI
    Accredited Adviser in Insurance, a designation awarded by the Insurance Institute
    of America to people who have completed a three-semester educational program
    designed for insurance producers.

  2. accelerated benefits

    Benefits available in some life insurance policies before death, usually triggered
    by long-term, catastrophic or terminal illness. Also known as living benefits.

  3. accident

    An event that is unforeseen, unexpected, and unintended.

  4. accidental bodily injury

    Physical injury sustained as the result of an accident.

  5. accident report form
    An accident report form is used to record key information about the accident.

  6. accidental death benefits
    A provision added to a life insurance policy for payment of an additional
    benefit in case of death that results from an accident. This provision is
    often called "double indemnity."

  7. account analyst
    See Administrative Assistant.

  8. account current
    An account current is the billing statement an insurance company sends to
    its producer.

  9. account selling
    Account selling is trying to handle all of a client's insurance needs, rather
    than providing for only a portion of those needs.

  10. accounts receivable insurance

    Pays for the cost of reconstructing accounts receivable records that have
    been damaged or destroyed by a covered peril. Even more important, it covers
    any payments that cannot be collected because records cannot be reconstructed.

  11. accredited adviser in insurance

    See AAI.

  12. actual cash value (ACV)
    The value of property as figured by determining what it would cost to replace
    the property (see Replacement Cost) and then adjusting this replacement cost
    by subtracting an amount that reflects depreciation.

  13. ACV
    See Actual Cash Value.

  14. accumulation period
    The time during which a person pays money into an annuity contract and builds
    up a fund to provide a deferred annuity.

  15. actuary
    Someone professionally trained in the technical aspects of insurance and related
    fields, particularly in the mathematics of insurance (the calculation of premiums,
    reserves and other values). An actuary uses complex mathematical methods,
    often with the aid of computers, to analyze past loss data and other statistics
    and develop systems for determining future premiums.

  16. adjuster
    See Claims Adjuster.

  17. adjustable life insurance
    A type of insurance that allows the policyholder to change the plan of insurance,
    raise or lower the face amount of the policy, increase or decrease the premium
    and lengthen or shorten the protection period.

  18. administrative assistant
    The administrative assistant supports the sales efforts of the producer. Other
    titles for this position include agency underwriter, insurance placer, customer
    service representative, marketing specialist, account analyst, and office
    manager.

  19. administrative services only (ASO) agreement

    Contract between an insurer (or its subsidiary) and a group employer, eligible
    group, trustee, or other party, in which the insurer provides certain administrative
    services. These services may include actuarial support, plan design, claims
    processing, data recovery and analysis, benefits communications, financial
    advice, medical care conversions, data preparation for governmental reports,
    and stop-loss coverage.

  20. adverse selection

    When people with a very high probability of loss purchase insurance to a greater
    extent that people with average or below average probabilities of loss. Underwriters'
    major goal is to avoid adverse selection.

  21. age limits

    Ages below and above which an insurance company will not accept applications
    or renew policies.

  22. agency billing
    See Producer Billing.

  23. agency underwriter
    See Administrative Assistant.

  24. agent
    An authorized representative of an insurance company who sells and services
    insurance contracts. See Producer, Exclusive Agent, Independent Agent.

  25. aggregate indemnity

    The maximum amount that may be collected for any disability, or period of
    disability, under an insurance policy.

  26. allocated benefits

    Maximum amount for specific services as itemized in an insurance contract.

  27. "all-risks"
    "All Risks" property policies, often called "special"
    policies, cover any loss unless it is caused by an excluded peril listed in
    the policy.

  28. alternate delivery system

    Health services that are more cost-effective than inpatient, acute-care hospitals,
    such as skilled and intermediary nursing facilities, hospice programs, and
    in-home services.

  29. ambulatory care

    Medical services provided on an outpatient (non-hospitalized) basis. Services
    may include diagnosis, treatment, surgery, and rehabilitation.

  30. amendment

    Document changing the provisions of an insurance contract signed jointly by
    the insurer and the policyholder.

  31. annuitant
    The person entitled to receive annuity payments or who now receives them.

  32. annuities
    Annuities are contracts sold by life insurance companies (the seller must
    be a licensed insurance entity in your state). In their simplest form, you
    pay a sum of money (either a lump sum or a series of payments) and the insurance
    company makes periodic payments to you, beginning on the date in your contract
    and continuing for the rest of your life. The earnings on your annuity payments
    are not taxable during the accumulation phase of your agreement; the annuity
    payments are taxable as income when you receive them. Variable annuities permit
    you to place your payments in professionally managed funds, similar to mutual
    funds, and to control how these payments are invested during the life of your
    contract. Unlike mutual funds, variable annuities have insurance provisions
    and guarantees to preserve the value of the principal you pay into the annuity.
    They also generally carry higher fees than mutual funds. Annuities may entail
    extensive taxation and estate issues, and annuity buyers should make sure
    they're aware of such issues.

  33. annuity certain
    A contract that provides an income for a specified number of years, regardless
    of life or death.

  34. annuity consideration
    The payment, or one of the regular periodic payments, an annuitant makes for
    an annuity.

  35. application
    A statement of information made by someone applying for life insurance. The
    information gathered helps the life insurance company assess whether the risk
    presented by the applicant is acceptable to underwriters.

  36. approval

    Signifies the legal acceptance of forms by a state when policy information
    is filed;

    Signifies the insurer's acceptance of risks as set forth in an application
    for insurance (as originally made or modified by the insurer); or

    Signifies the acceptance of a request from an applicant or policyholder for
    new insurance, reinstatement of a terminated policy, a policy loan, or other
    request.

  37. assigned risk plans
    See Automobile Insurance Plans.

  38. assignment
    The legal transfer of one person's interest in an insurance policy to another
    person.

  39. association group

    A group formed from members of a trade or professional association for insurance
    under one master health insurance contract.

  40. audit
    During an audit, members of the home office staff underwriting department
    examine files to see whether the underwriting guidelines are being followed.
    Also see Premium Auditor.

  41. audited premium
    See Premium Auditor.

  42. auto liability
    Pays for damages that you cause to other people and their property. If you
    cause an accident and you bang up your car or yourself, your auto liability
    insurance will not pay for your medical bills or the repairs to your car.
    (Auto medical payments coverage would.) But it will pay for the other guy's,
    up to the limits of your policy. Without the coverage, your assets would be
    subject to seizure to pay the medical bills, car repairs and other damages
    that you caused in an accident. Once the insurance company pays out the limits
    of your policy, you're liable for the rest, which is why it's advisable
    to purchase higher limits than what your state requires. Auto liability coverage
    has three parts: bodily injury per person, bodily injury per accident, and
    property damage. Limits for liability are usually written like "20/40/10."
    That means a policy will pay bodily injury losses up to $20,000 per person,
    and up to $40,000 per accident (if more than one person was hurt). It will
    also pay property damage losses up to $10,000 per accident.

  43. automatic premium loan
    A provision in a life insurance policy that any premium not paid by the end
    of the grace period (usually 31 days) is automatically paid by a policy loan
    if there is sufficient cash value.

  44. automobile insurance plans
    Formerly known as assigned risk plans--are residual market programs providing
    auto insurance. See Residual Market.

  45. auto medical payments
    If you cause an accident, the coverage works like this: Auto liability coverage
    pays the bodily injury and property damage losses of the other person. Collision
    coverage pays for repairs to your own vehicle. Auto medical payments coverage
    pays medical and funeral expenses for you and your passengers. If you already
    have health and disability insurance, the coverage may be redundant.

  46. auto physical damage coverage

    Insures against loss resulting from damage to an auto owned by the insured;
    also provides coverage if the car is stolen.


 

 B

  1. beneficiary
    The person or financial instrument (for example, a trust fund), named in the
    policy as the recipient of insurance money in the event of the policyholder's
    death.

  2. benefit

    Amount payable by the insurance company to a claimant, assignee, or beneficiary
    when the insured suffers a loss.

  3. binding receipt

    A receipt given for the payment which accompanies an application for insurance.
    If the policy is approved, the payment "binds" the company to make
    the policy effective from date of receipt.

  4. blanket contract

    Contract for health insurance that coves a class of persons. It is used for
    groups such as athletic teams and for employee travel.

  5. blanket medical expense

    A provision that entitles the insured person to collect up to a maximum for
    all hospital and medical expenses, without limitations on specific types of
    medical expenses.

  6. blue cross
    Nonprofit corporation providing protection to its members against the cost
    of hospital care in a limited geographic area.

  7. blue shield
    Nonprofit corporation providing protection to its members against the cost
    of surgery and other items of medical care in a limited geographic area.

  8. broker
    A sales and service representative who handles insurance for clients, generally
    selling insurance of various kinds and for several companies. Brokers resemble
    agents, except for the fact that, in a legal sense, brokers represent the
    party seeking insurance rather than the insurance company. See Agent, Producer.

  9. business insurance
    A policy that provides coverage to a business. It is often purchased to indemnify
    a business for the loss of services if a key employee (such as a partner)
    becomes disabled.

  10. business life insurance
    Life insurance purchased by a business enterprise on the life of a member
    of the firm. It is often bought by partnerships to protect the surviving partners
    against loss caused by the death of a partner, or by a corporation to reimburse
    it for loss caused by the death of a key employee. (Also known as key person
    insurance.)


 

C

  1. cancer insurance
    A very narrow form of health insurance that covers the policyholder in the
    event he or she contracts cancer. Policies often exclude skin cancer. Some
    policies won't pay for cancer treatments until several years after the policy
    was purchased. Consumer groups and insurance regulators have said cancer insurance
    policies are more expensive than they're worth, since the insurance companies
    pay out a rather small percentage of the premiums they collect.

  2. capitation
    Method of payment whereby a physician or hospital is paid a fixed amount for
    each person in a particular plan regardless of the frequency or type of service
    provided.

  3. cash value
    The amount available in cash upon surrender of a policy before it becomes
    payable upon death or maturity.

  4. certificate
    A statement issued to individuals insured under a group policy, setting forth
    the essential provisions relating to their coverage.

  5. claim
    Notification to an insurance company that payment of an amount is due under
    the terms of the policy. A claim is a demand by a person or business who is
    seeking to recover for a loss. A claim may be made against an individual.
    A claim may also be made against an insurance company, when an insured asks
    the insurance company to pay for a loss that may be covered by an insurance
    policy.

  6. co-insurance
    Arrangement by which the insurer and the insured share, in a specific ratio,
    payment for losses covered by the policy, after the deductible is met.

  7. combination plans
    Life insurance policies that combine features of term and whole life policies.

  8. comprehensive medical expense insurance
    Insurance that provides coverage, in one policy, for basic hospital expense
    and major medical expense.

  9. computer insurance
    Covers computer equipment and peripherals beyond the normal coverage provided
    in homeowner's insurance policies. Usually, homeowner's policies only cover
    up to between $1,000 and $3,000 in computer equipment. With more people owning
    expensive computers and peripherals, and even using them for home-based businesses,
    riders and separate policies are becoming more popular. Some policies are
    also designed to cover damage and/or theft of portable equipment, such as
    laptop computers, and even the costs of data recovery.

  10. consolidate omnibus budget reconciliation act (COBRA)
    Requires employers with more than 20 employees to make group health care coverage
    available for 18 months, at the employee's expense, to employees who leave
    the employer for any reason other than gross misconduct.

  11. consideration clause
    Stipulation that states the basis on which an insurer issues an insurance
    contract.

  12. contributory plan
    Group plan under which the insured shares in the cost of the plan with the
    policyholder.

  13. conventional health plan
    Plan that provides all benefits and issues certificates containing the insurance
    company's guarantees.

  14. conversion privilege
    Right given to an insured person under a group insurance contract to change
    coverage, without evidence of medical insurability, to an individual policy
    upon termination of the group coverage. The conditions under which conversion
    can be made are defined in the master policy.

  15. convertible term insuranceTerm insurance that offers the policyholder the option of exchanging it for
    a permanent plan of insurance without evidence of insurability.

  16. coordination of benefits (COB)
    Method of integrating benefits payable under more than one health insurance
    plan so that the insured's benefits from all sources do not exceed 100 percent
    of allowable medical expenses or eliminate incentives to contain costs.

  17. cost containment
    Reduction of inefficiencies in the consumption, allocation, or production
    of health care services. Inefficiencies can occur when health services are
    used inappropriately; when health services could be delivered in less costly
    settings; and when the costs could be reduced by using a different combination
    of resources.

  18. cost index
    A way to compare the costs of similar plans of life insurance. A policy with
    a smaller index number is generally a better buy than a comparable policy
    with a larger index number.

  19. covered expenses
    Health care charges that an insurer will consider paying under the terms of
    a health insurance policy.

  20. cost-of-living rider
    An option that permits the policyholder to purchase increasing term insurance
    coverage. The death proceeds increase by a stated amount each year to coincide
    with an estimated increase in the cost of living.

  21. credit insurance
    Optional coverage that pays off the balance of an outstanding loan in the
    event you become disabled, unemployed or die. Exact coverage depends on the
    particular policy. Variations include credit life (pays if you die), credit
    health or disability (pays if you get sick or become disabled) and credit
    unemployment insurance (pays if you involuntarily lose your job). Usually
    offered with credit cards, auto loans and mortgages.

  22. credit life insurance
    Term life insurance issued through a lender or lending agency to cover payment
    of a loan, installment purchase or other obligation, in case of death.

  23. current assumption whole life insurance
    A variation of universal life insurance, this product involves fixed premiums
    and fixed death benefits. Its cash value growth depends on market conditions.
    If they are favorable and if premiums paid in the policy's first year are
    large enough, premiums for one or more years may be reduced to zero.


 

D

  1. deductible

    Amount that must be paid by the insured before benefits will be paid by the
    insurer.

  2. declination
    The rejection by a life insurance company of an application for life insurance,
    usually for reasons of health or occupation.

  3. deferred annuity
    Annuity payments that will begin at some future date.

  4. deferred group annuity
    A type of group annuity providing for the purchase each year of a paid-up
    deferred annuity for each member of the group, the total amount received by
    the member at retirement being the sum of these deferred annuities.

  5. deposit administration group annuity
    A type of group annuity providing for the accumulation of contributions in
    an undivided fund out of which annuities are purchased as the members of the
    group retire.

  6. deposit term insurance
    A form of term insurance, not really involving a "deposit," in which
    the first-year premium is larger than subsequent premiums. Typically, a partial
    endowment is paid at the end of the term period. In many cases the partial
    endowment can be applied toward the purchase of a new term policy or, perhaps,
    a whole life policy.

  7. diagnosis-related groups (DRG)

    System of determining reimbursement fees based on the medical diagnosis of
    a patient.

  8. disability

    Physical or mental condition that prevents a person from performing one or
    more occupational duties temporarily (short-term), long-term, or totally (total
    disability).

  9. disability benefit
    A feature added to some life insurance policies providing for waiver of premium,
    and sometimes payment of monthly income, if the policyholder becomes totally
    and permanently disabled.

  10. disability income insurance

    Insurance that provides periodic payments when an insured person is unable
    to work as a result of illness or injury.

  11. disability insurance
    A form of health insurance that pays the policyholder in place of his or her
    usual income if the policyholder can't work because of illness or accident.
    Usually, policies begin paying after a waiting period stipulated in the policy,
    and pay a certain percentage of the policyholder's usual income. Sometimes
    this is provided by employers, but it's also available as a separate coverage.

  12. dismemberment

    Accidental loss of limb or sight.

  13. disposable personal income

    Personal income less personal tax and nontax payments; the income available
    to people for spending and saving.

  14. dividend
    An amount of money returned to the holder of a participating policy. The money
    is a partial refund of the premium paid. It results from actual mortality,
    interest and expenses that were more favorable than expected when the premiums
    were set.

  15. dividend addition
    An amount of paid up insurance purchased with a policy dividend and added
    to the face amount of the policy.

  16. double indemnity

    Payment of twice the policy normal benefit for specific kinds of losses under
    certain conditions.

  17. dual life insurance
    Another name for second-to-die insurance.

  18. duplication of coverage

    Coverage under two or more policies for the same potential loss.


 

E

  1. earned premium

    Portion of a premium for which protection has already been provided by the
    insurer.

  2. earthquake insurance
    Earthquake policies are similar to regular homeowner's policies but without
    the liability coverage. You choose a dollar ceiling for the dwelling coverage,
    and a percentage of this ceiling is then applied to coverages for personal
    property and additional living expenses (hotel expenses if your home becomes
    uninhabitable). Premiums for these policies are usually rather steep in the
    places where you would need to buy one. Until recently, the only place Californians
    could buy the coverage was from the California Earthquake Authority, which
    offered skimpy coverage. But the market is opening up again and some other
    companies are offering old-fashioned policies with better coverage (at higher
    rates, of course).

  3. effective date

    Date when insurance coverage begins.

  4. eligible employees

    Employees who meet the eligibility requirements for insurance set forth in
    a group policy.

  5. eligibility date

    Date when a member of an insured group applies for insurance.

  6. eligibility period

    Time following the eligibility date (usually 31 days) during which a member
    of a group may apply for insurance without evidence of insurability.

  7. elimination period

    Days at the beginning of a period of disability when no benefits are paid.

  8. employee retirement income security act of 1974 (ERISA)
  9. Federal law that affects pension and profit-sharing plans. Among other provisions,
    this law specifies a published summary plan must be distributed to participants
    within 120 days after adoption of the plan and within 90 days after an employee
    becomes a participant. The law requires that a summary plan description be
    issued every 5 years.

  10. endowment
    Life insurance payable to the policyholder if living, on the maturity date
    stated in the policy, or to a beneficiary if the insured dies before that
    date.

  11. enrollment card

    Document signed by an eligible person indicating a desire to participate in
    a group insurance plan. The document or card authorizes an employer to deduct
    contributions from an employee's pay. If life and accidental death and dismemberment
    coverage are involved, the card usually includes the beneficiary's name and
    relationship.

  12. evidence of insurability

    A statement or proof of physical condition and/or other factual information
    affecting a person's eligibility for insurance. In group insurance, evidence
    of insurability is required only in specific situations: when a person fails
    to enroll during the open enrollment period; when a person applies for reinstatement
    after having previously withdrawn from the plan when receiving an overall
    maximum benefit; or when a person applies for excess amounts of group life
    or disability insurance.

  13. exclusions (exceptions)

    Conditions or circumstances, listed in the policy, for which the insurer will
    not provide benefits.

  14. exclusive provider organizations (EPO)

    Form of managed care in which participants are reimbursed only for care received
    from affiliated providers.

  15. expectation of life
    See life expectancy.

  16. experience

    Relationship, usually expressed as a percent or ratio, of claims to premiums
    for a stated period.

  17. experience rating

    Process of determining the premium rate for a group based wholly or partially
    on that risk's experience.

  18. experience refund

    Amount returned by an insurer to a group policyholder when the financial experience
    of a particular group (or class to which the group belongs) has been more
    favorable than anticipated.

  19. extended term insurance
    A form of insurance available as a non-forfeiture option. It provides the
    original amount of insurance for a limited period of time.


 

F

  1. face amount
    The amount stated on the face of the insurance policy that will be paid in
    case of death or at maturity. It does not include dividend additions or additional
    amounts payable under accidental death or other special provisions.

  2. family policy
    A life insurance policy providing insurance on all or several family members
    in one contract, generally whole life insurance on the principal breadwinner
    and small amounts of term insurance on the other spouse and children, including
    those born after the policy is issued.

  3. flat schedule

    A type of group insurance schedule under which everyone is insured for the
    same benefits regardless of salary, position, or other circumstances.

  4. flexible premium deferred annuity
    An annuity contract that permits varying premium payments from year to year
    and is often used for individual retirement accounts.

  5. flexible premium policy or annuity
    A life insurance policy or annuity under which the policyholder or contract
    holder may vary the amounts or timing of premium payments.

  6. flexible premium variable life insurance
    A life insurance policy that combines the premium flexibility feature of universal
    life insurance with the equity-based benefit feature of variable life insurance.

  7. flood insuranceA regular homeowner's policy will not pay for damages caused by flooding.
    In order to get the coverage, you'll have to go to some outfit that writes
    for the National Flood Insurance Program. Outside of fire, flooding is the
    most widespread natural disaster. If your community participates in NFIP's
    floodplain management program, you should be eligible to buy the coverage.
    The only people who may have trouble finding flood coverage are residents
    of "coastal barrier resource system" areas and communities that
    do not participate in NFIP's programs. Flood insurance is also available
    to renters, condominium owners, and co-op owners.

  8. franchise insurance

    Insurance contracts issued to members of a specific group (such as employees
    of a common employer or members of an association) under a group-like arrangement
    in which the employer or the association collects and remits premiums.

  9. fraternal life insurance
    Life insurance provided by fraternal orders or societies to their members.


 

G

  1. grace period
    A period (usually 31 days) following each premium due date, other than the
    first due date, during which an overdue premium may be paid. All provisions
    of the policy remain in force throughout this period.

  2. group annuity
    A pension plan providing annuities at retirement to a group of people under
    a master contract. It is usually issued to an employer for the benefit of
    employees. The individual members of the group hold certificates as evidence
    of their annuities.

  3. group life insurance
    Life insurance that usually does not require medical examinations, on a group
    of people under a master policy. It is typically issued to an employer for
    the benefit of employees, or to members of an association, for example, a
    professional membership group. The individual members of the group hold certificates
    as evidence of their insurance.

  4. guaranteed insurability
    An option that permits the policyholder to buy additional stated amounts of
    life insurance at stated times in the future without evidence of insurability.

  5. guaranteed renewable contract

    Contract under which an insured has the right, commonly up to a certain age,
    to continue the policy by the timely payment of premiums. Under renewable
    contracts, the insurer reserves the right to change premium rates by policy
    class.


 

H

  1. health insurance

    Coverage that provides benefits as a result of sickness or injury. Policies
    include insurance for losses from accident, medical expense, disability, or
    accidental death and dismemberment.

  2. health maintenance organization (HMO)

    Organization that provides a wide range of comprehensive health care services
    for a specified group for a fixed periodic prepayment.

  3. hospice

    Care provided to terminally ill patients and their families that emphasizes
    emotional needs and coping with pain and death rather than cure.

  4. hospital indemnity insurance

    Health insurance that provides a stipulated daily, weekly, or monthly payment
    to an insured person during hospital confinement, without regard to the actual
    confinement expense.

  5. hospital medical insurance
  6. Coverage that provides benefits for the cost of any or all hospital services
    normally covered under various health care plans.


 

I

  1. incurred claims

    Claims paid during the policy year plus the claim reserves as of the end of
    the policy year, minus the corresponding reserves as of the beginning of the
    policy year. The difference between the year end and beginning of the year
    claim reserves is called the increase in reserves and may be added directly
    to the paid claims to produce the incurred claims.

  2. indemnity

    Benefits of a predetermined amount paid for a loss.

  3. individual insurance

    A policy that provides protection to a policyholder and/or his or her family;
    sometimes called personal insurance as distinct from group and blanket insurance.

  4. individual policy pension trust
    A type of pension plan, frequently used for small groups, administered by
    trustees who are authorized to purchase individual level premium policies
    or annuity contracts for each member of the plan. The policies usually provide
    both life insurance and retirement benefits.

  5. individual retirement account (IRA)
    An account set up by an individual that in some cases allows contributions
    to be deducted from income and permits earnings on contributions to accumulate
    tax-deferred until retirement, regardless of whether the contributions are
    deductible. Under the 1986 tax law, only those who do not participate in a
    pension plan at work or who do participate and meet certain income guidelines
    can make tax-deductible contributions to an IRA. All others can make contributions
    to an IRA on a non-deductible basis.

  6. industrial life insurance
    Life insurance issued in small amounts, usually less than $1,000, with premiums
    payable on a weekly or monthly basis. The premiums are generally collected
    at the home by an agent of the company. Sometimes referred to as debit insurance.

  7. injury independent of all other means

    An injury resulting from an accident that was not caused by an illness.

  8. inland marine insurance
    A broad type of insurance, generally covering articles that may be transported
    from one place to another as well as bridges, tunnels and other means of transportation.
    It includes goods in transit (generally excepting transoceanic) as well as
    numerous "floater" policies such as personal effects, personal property,
    jewelry, furs, fine arts and other such items.

  9. insurability
    Acceptability to the company of an applicant for insurance.

  10. insurable risk

    The conditions that make a risk insurable are (1) the peril insured against
    must produce a definite loss not under the control of the insured, (2) there
    must be a large number of homogeneous exposures subject to the same perils,
    (3) the loss must be calculable and the cost of insuring it must be economically
    feasible, (4) the peril must be unlikely to affect all insureds simultaneously,
    and (5) the loss produced by a risk must be definite and have a potential
    to be financially serious.

  11. insurance

    Risk management plan that, for a price, offers the insured an opportunity
    to share the costs of possible financial loss through an insurer.

  12. insuring clause

    Stipulation in an insurance policy that states the type of loss the policy
    covers and lists the parties to the contract.

  13. insurance examiner
    The representative of a state insurance department assigned to participate
    in the official audit and examination of the affairs of an insurance company.

  14. insured
    The person on whose life the policy is issued.

  15. integration

    The combining of two or more benefit plans to prevent duplication of payments.


 

J


 

K

  1. Keogh plan
    A type of tax-favored retirement plan for self-employed people.

  2. key-person insurance

    Insurance designed to protect a business against the loss of income resulting
    from the disability or death of an employee in a significant position.


 

L

  1. lapse

    Termination of coverage because of nonpayment within a specified time period.

  2. lapsed policy
    A policy terminated at the end of the grace period because of non-payment
    of premiums.

  3. legal reserve

    The minimum reserve, as calculated under the state insurance code, which a
    company must keep to meet future claims and obligations.

  4. legal reserve life insurance company
    A life insurance company operating under state insurance laws specifying the
    minimum basis for the reserves the company must maintain on its policies.

  5. level premium
  6. Rating structure under which the premium level remains the same throughout
    the life of the policy.

  7. level premium insurance
    Insurance for which the cost is distributed evenly over the premium payment
    period. The premium remains the same from year to year and is more than the
    actual cost of protection in the earlier years of the policy and less than
    the actual cost in the later years. The excess paid in the early years builds
    up a reserve to cover the higher cost in the later years.

  8. life annuity
    A contract that provides an income for life.

  9. lifetime disability benefit

    A provision making benefits payable for an insured's lifetime as long as the
    insured person is totally disabled.

  10. life expectancy
    The average number of years of life remaining for a group of people of a given
    age according to a particular mortality table.

  11. life insurance in force
    The sum of the face amounts, plus dividend additions, of life insurance policies
    outstanding at a given time. Additional amounts payable under accidental death
    or other special provisions are not included.

  12. limited payment life insurance
    Whole life insurance on which premiums are payable for a specified number
    of years or until death, if death occurs before the end of the specified period.

  13. limited policy

    Policy that covers only specified accidents or sicknesses.

  14. living benefits
    Another name for accelerated death benefits.

  15. load
    Any sales fees or charges paid in purchasing an annuity contract.

  16. long-term care

    A continuum of maintenance, custodial, and health services for the chronically
    ill or disabled. Such services may be provided on an inpatient (rehabilitation
    facility, nursing home, mental hospital) or outpatient basis, or at home.

  17. Long term care insurance
    A health-insurance variation designed to cover the costs of long term care
    at home or in a nursing home. These policies offer a specified nursing home
    benefit and home-care benefit. Some policies also account for inflation. The
    popularity of long term care insurance has grown as federal laws have changed,
    making it less likely that Medicaid will pick up the tab for long term care.
    These policies are usually rather expensive, and grow even more costly as
    the policyholder ages.

  18. long-term disability income insurance (LTD)

    Plan that helps replace income lost through inability to work because of disability
    caused by an accident or illness.


 

M

  1. major medical expense insurance

    Insurance that provides benefits for most types of medical expenses up to
    a high maximum benefit. Such contracts often contain internal limits and usually
    are subject to deductibles and co-insurance.

  2. managed care

    Systems that integrate the financing and delivery of appropriate health care
    services by means of arrangements with selected providers to furnish a comprehensive
    set of health-care services to members; explicit criteria for the selection
    of health-care providers; formal programs for ongoing quality assurance and
    utilization review; and significant financial incentives for members to use
    providers and procedures associated with the plan.

  3. manual premium rate

    Premium for a group developed from the insurer's standard rate tables; it
    is the cost usually quoted in an insurer's underwriting manual.

  4. Medicaid
    Simply put, Medicaid is health insurance for the poor. It was created in 1965
    as a joint federal/state public assistance program for those too poor to afford
    health care. Since the program is administered by the individual states under
    federal guidelines, the benefits offered and eligibility requirements vary
    widely. About 36 million people around the U.S., including children, the elderly,
    the blind and the disabled, are currently covered by Medicaid. Usually, Medicaid
    recipients pay no part of costs for covered medical expenses, although a co-payment
    is sometimes required.

  5. Medicare
    Medicare is a federal insurance program which primarily serves those over
    65 years old and younger, disabled people and dialysis patients. It currently
    covers about 37 million Americans. Medicare is divided into Part A, which
    covers inpatient hospital services, nursing home care, home health care and
    hospice care; and Part B, which helps pay the cost of doctors' services, outpatient
    hospital services, medical equipment and supplies, and other health services
    and supplies. Recipients pay some part of the costs through deductibles. Since
    Medicare doesn't cover all expenses, recipients often supplement their coverage
    through separate Medigap policies.

  6. medsup (aka: medigap)

    Private insurance that can be purchased to supplement Medicare.

  7. minimum group

    The fewest number of employees permitted under a state law to constitute a
    group for insurance purposes; the purpose of establishing minimums is to maintain
    a distinction between individual and group insurance.

  8. minimum premium plan

    The employer self-funds a fixed percentage (e.g. 90 percent) of the estimated
    monthly claims, and the insurer covers the remainder. This self-funded approach
    avoids payment of a premium tax required in most states.

  9. miscellaneous expense

    Expenses connected with hospital insurance; hospital charges other than room
    and board such as x-rays, drugs, laboratory fees, and other charges.

  10. modified life insurance
    A type of whole life policy with a premium that is relatively low in the first
    several years but that increases in later years.

  11. morbidity

    Frequency and severity of sicknesses and accidents in a well-defined class
    or classes of persons.

  12. mortality table
    A statistical table showing the death rate (probability of death) at each
    age.

  13. mortgage insurance
    There are actually two types of mortgage insurance. Usually, people mean private
    mortgage insurance, or PMI, which protects a mortgage company against a defaulted
    loan. PMI does not benefit the homeowner. If you bought your home with a down
    payment of less than 20 percent of its value, your bank probably made you
    take out PMI. At some point, you won't have to pay for PMI any more,
    but don't expect the bank to let you know when that is. Mortgage insurance
    can also mean a type of life insurance, which pays off the balance of a mortgage
    when the policyholder dies or, in some cases, becomes disabled. As a homeowner,
    you want to get rid of the first type as soon as you can. You might want to
    consider the second type.

  14. multiple employer trust (MET)

    A trust established by a sponsor that brings together a number of small, unrelated
    employers for the purpose of providing group medical coverage on an insured
    or self-funded basis.

  15. mutual life insurance company
    A life insurance company owned by policyholders who share in the company's
    surplus earnings.


 

N

  1. national association of insurance commissioners (NAIC)
    National organization of state officials charged with regulating insurance.
    It has no official power but wields significant influence. NAIC was formed
    to provide national uniformity in insurance regulations.

  2. no-fault insurance
    No-fault insurance (sometimes known as PIP or PPI) is designed to pay for
    the financial losses associated with minor accidents as quickly as possible.
    Under a no-fault system, your own insurance company will pay medical expenses
    and lost wages caused by an accident, regardless of who was at fault. In the
    long run, this system saves time and money that would otherwise be spent litigating
    petty claims. Usually, that means less expensive auto insurance. In exchange,
    no-fault systems limit the right to sue under certain circumstances. Not every
    state has no-fault, and systems vary quite a bit from state to state. In Michigan,
    there is no limit to the amount that you can collect under no-fault. In other
    states, you may only be able to collect $5,000. Once no-fault runs out, motorists
    can turn to their uninsured motorist/underinsured motorist coverage to make
    up the difference.

  3. noncancellable policy

    A policy that can be maintained through timely payment of the premiums until
    the policyholder is at least age 50 or, in the case of a policy issued after
    age 44, for at least five years from the date of issue. The insurer may not
    unilaterally change any provision of the in-force policy, including premium
    rates.

  4. noncontributory plan

    Group insurance plan under which the employer does not require employees to
    share in its cost.

  5. nondisabling injury

    Any injury that may require medical care but does not result in the loss of
    working time or income.

  6. non-forfeiture option
    One of the choices available if the policyholder discontinues payments on
    a policy with a cash value. This may be taken in cash as extended term insurance
    or as reduced paid-up insurance.

  7. non-forfeiture values
    The value of the policy if canceled, either in cash or in another form of
    insurance. Also available to the policyholder if required premium payments
    are not paid.

  8. non-medical limit
    The maximum face value of a policy that a given company will issue without
    the applicant taking a medical examination.

  9. nonoccupational policy

    Policy that covers only non-job-related accidents or sicknesses not covered
    under any workers' compensation law.

  10. non-participating insurance
    Insurance on which no dividends are paid.

  11. nonparticipating policy

    Policy that does not provide for payment of a dividend.

  12. nonprofit insurers

    Corporations organized under special state laws to provide medical benefits
    on a not-for-profit basis (for example, Blue Cross Blue Shield and Dental
    Service Corporations).


 

O

  1. occupational hazards

    Factors inherent in the insured person's occupation that expose him or her
    to greater-than-normal physical danger.

  2. optional renewable policy

    Contract that grants the insurer the right to terminate a policy on any anniversary,
    or, in some cases, on a premium date.

  3. ordinary life insurance
    Life insurance usually issued in amounts of $1,000 or more with premiums payable
    on an annual, semi-annual, quarterly or monthly basis.

  4. overhead expense insurance

    Insurance for Businesses owners to help offset continuing business expenses
    if the owner is disabled.

 
 

P

  1. paid-up insurance
    Insurance on which all required premiums have been paid.

  2. partial disability

    A disability that prevents a person from performing one or more functions
    of his or her regular job.

  3. participating insurance
    Insurance on which the policyholder is entitled to share in the surplus earnings
    of the company through policy dividends that reflect the difference between
    the premium charged and the cost to the company of providing the insurance.

  4. participating policy

    Policy under which the policyholder is eligible to receive dividends.

  5. payout period
    The period during which you receive the income from your annuity contract.

  6. permanent life insurance
    A phrase used to cover any form of life insurance except term; generally insurance
    that accrues cash value, such as whole life or endowment.

  7. physician's expense insurance

    Coverage that provides benefits toward the cost of doctor's fees - for surgical
    care in the hospital, at home, or in a physician's office, and for x-rays
    or laboratory tests performed outside of a hospital. (Also called Regular
    Medical Expense Insurance).

  8. point of service plan (POS)

    Plan that offers a full range of health services through a combination of
    HMO and PPO features. Members can choose to either use the defined managed
    care program (with 100 percent coverage) or go out-of-plan for services (with
    80 percent coverage).

  9. policy
    The printed document issued to the policyholder by the company stating the
    terms of the insurance contract.

  10. policy loan
    Under an insurance policy, the amount that can be borrowed at a specified
    rate of interest from the issuing company by the policyholder, who uses the
    value of the policy as collateral for the loan. In the event the policyholder
    dies with the debt partially or fully unpaid, the insurance company deducts
    the amount borrowed, plus any accumulated interest, from the amount payable.

  11. policy reserves
    The measure of the funds that a life insurance company holds specifically
    for fulfillment of its policy obligations. Reserves are required by law to
    be calculated so that, together with future premium payments and anticipated
    interest earnings, they will enable the company to pay all future claims.

  12. policyholder
    The person who owns a life insurance policy. This is usually the insured person,
    but it may also be a relative of the insured, a partnership or a corporation.

  13. policy term

    The period for which an insurance policy provides coverage.

  14. precertification

    A utilization management program that requires the insured or the health care
    provider to notify the insurer prior to a hospitalization or surgical procedure.
    The notification allows the insurer to authorize payment, as well as to recommend
    alternate courses of action.

  15. preexisting condition

    Any physical and/or mental condition or conditions that exist prior to the
    effective date of health insurance coverage.

  16. preferred provider organization (PPO)

    Plan through which a sponsoring group negotiates price discounts with providers
    in exchange for patients. The sponsor may be an insurer, employer, or third-party
    administrator.

  17. premium
    The payment, or one of the regular periodic payments, that a policyholder
    makes to own an insurance policy.

  18. premium loan
    A policy loan made for the purpose of paying premiums.

  19. prepaid group practice plan

    A plan under which specified health services are rendered by participating
    physicians to an enrolled group of persons, with a fixed periodic payment
    made in advance by (or on behalf of) each person or family. If a health insurance
    carrier is involved, a contract to pay in advance for the full range of health
    services to which the insured is entitled under the terms of the health insurance
    contract. An HMO is an example of a prepaid group practice plan.

  20. principal
    The amount you pay into your annuity contract as distinguished from the interest
    that is credited to it.

  21. principal sum

    Amount payable in a lump sum in the event of accidental death and, in some
    cases, accidental dismemberment.

  22. professional standards review organization (PSRO)
    Organization responsible for determining whether care and services provided
    are necessary and meet standards for reimbursement under the Medicare and
    Medicaid programs.

  23. proration
    Modification of policy benefits because of changes in the insured's occupation
    or the purchase of other insurance.

  24. prospective payment
    Payment of a lump-sum to an institution for care of an insured person based
    on a predetermined amount correlated with a diagnosis.


 

Q

  1. qualified annuity
    An annuity that is sold as part of a tax-qualified Keogh plan or company pension
    plan.

  2. qualified impairment insurance
    A form of substandard or special class insurance that restricts benefits for
    an insured person's particular condition.


 

R

  1. rated policy
    Sometimes called an "extra-risk" policy, an insurance policy issued
    at a higher-than-standard premium rate to cover the extra risk where, for
    example, an insured has impaired health or a hazardous occupation.

  2. reasonable and customary charge (R & C)
    Amounts charged by health care providers that are consistent with charges
    from similar providers for identical or similar services in a given locale.

  3. recurring claim provision
    A provision in some health insurance policies that specifies a length of time
    during which the recurrence of a condition is considered to be a continuation
    of a previous period of disability or hospital confinement.

  4. reduced paid-up insurance
    A form of insurance available as a non-forfeiture option. It provides for
    continuation of the original insurance plan but for a reduced amount.

  5. rehabilitation
    Process and goal of restoring disabled persons to maximum physical, mental,
    and vocational independence and productivity (commensurate with their limitations).
    Rehabilitation is achieved by identifying and developing residual capabilities,
    job modification, or retraining. A "rehabilitation provision" appears
    in some long-term disability policies; this provides for continuation of benefits
    or other financial assistance during the rehabilitation period.

  6. reinstatement
    The restoration of a lapsed policy to full force and effect. The company requires
    evidence of insurability and payment of past due premiums plus interest.

  7. reinsurance
    Acceptance by one insurer (the reinsurer) of all or part of the risk or loss
    underwritten by another insurer (the ceding insurer).

  8. renewal
    Continuance of coverage beyond original terms signified by acceptance of a
    premium payment for a new term.

  9. renewable term insurance
    Term insurance providing the right to renew at the end of the term for another
    term or terms, without evidence of insurability. The premium rates increase
    at each renewal as the age of the insured increases.

  10. replacement vs. actual cash value
    The actual cash value of an item can be depressingly small after only a brief
    period of ownership. And, if your homeowner's coverage entitles you to only
    the actual cash value of any damaged property, you could be out of luck when
    you go to replace the property with only your claim check as payment. Replacement-cost
    coverage permits you to claim the cost of replacing an insured item. Its most
    important use is on your home and, secondly, the personal property in your
    home.

  11. reserve
    The amount required to be carried as a liability in the financial statement
    of an insurer to provide for future commitments under policies outstanding.

  12. residual disability benefits
    A provision that provides benefits in proportion to a reduction of earnings
    as a result of disability, as opposed to the inability to work full-time.

  13. rider
    An amendment to an insurance policy that modifies the policy by expanding
    or restricting its benefits or excluding certain conditions from coverage.

  14. risk
    The probable amount of loss foreseen by an insurer in issuing a contract.
    The term sometimes applies to the person insured or to the hazard insured
    against.

  15. risk classification
    The process by which a company decides how its premium rates for life insurance
    should differ according to the risk characteristics of individuals insured
    (for example, age, occupation, sex, state of health) and then applies the
    resulting rules to individual applications. (See underwriting.)


 

S

  1. second-to-die life insurance
    A form of insurance, traditionally used as an estate planning tool, that pays
    a death benefit only upon the death of the insured who survives the longest.
    Its main purpose is to pay estate taxes upon the death of the second insured.
    Because it is based on joint life expectancy, its premium is less than the
    total premiums for individual policies on the same lives. This type of insurance
    is available in many forms, including policies with interest-rate features
    and flexible premiums.

  2. self administration
    Maintenance of all records and assumption of responsibility, by a group policyholder,
    for those covered under its insurance plan. Responsibilities include preparing
    the premium statement for each payment date and submitting it with a check
    to the insurer. The insurance company, in most instances, has the contractual
    prerogative to audit the policyholder's records.

  3. self insurance
    A program financed entirely by the employer for insuring employees instead
    of purchasing coverage from a commercial carrier.

  4. senior citizens policies
    Policies insuring persons 65 years of age or older; in most cases, these policies
    supplement the coverage provided under Medicare.

  5. separate account
    An asset account established by a life insurance company separate from other
    funds, used primarily for pension plans and variable life products. This arrangement
    permits wider latitude in the choice of investments, particularly in equities.

  6. settlement options
    One of several ways, other than immediate payment in a lump sum, in which
    the insured or beneficiary may choose to have policy proceeds paid.

  7. short-term disability income insurance
    Insurance that provides benefits only for loss from illness or disease and
    excludes loss from accident or injury.

  8. single-premium whole life insurance
    A whole life policy that provides protection for the duration of the insured's
    life in exchange for the payment of the total premium in one lump sum at the
    time of application.

  9. social security freeze
    A long-term disability provision that guarantees that Social Security benefits
    will not be changed regardless of changes in the Social Security law.

  10. special risk insurance
    Coverage for risks or hazards of a special or unusual nature.

  11. specified disease insurance
    Insurance providing an unallocated benefit, subject to a maximum amount, for
    expenses in connection with the treatment of specified diseases, such as cancer,
    poliomyelitis, encephalitis, and spinal meningitis. These policies are designed
    to supplement major medical policies.

  12. state regulation of insurance
    The complexity and cost variations of insurance stems directly from state
    regulation of the industry. Unlike the securities and banking industries,
    the insurance industry does not have a strong federal oversight role. Instead,
    through the 1945 McCarran-Ferguson Act, the domestic industry faces 55 sets
    of overseers (the 50 states, the District of Columbia, Puerto Rico, the Virgin
    Islands, Guam and American Samoa). With so many different sites of regulation,
    and so many sources of local sales outlets for insurance policies, it's
    not surprising that insurance policies are hardly the standardized commodities
    that you find when trading stocks or opening a bank account. This is particularly
    true in property/casualty coverage and less so in life insurance. Added to
    the maze of different products is the fact that state-based regulation means
    that insurers may base their rates in each state on their business profile
    in that state. Auto rates, for example, reflect accident and theft trends
    in local territories. The upshot is that there is great pricing variation
    along with lots of different types of policies. Lastly, insurers have increasing
    freedom to price their policies for whatever the market will bear. Even if
    an insurer has to file its rates in your state, you shouldn't assume
    that state regulators are poring over the rates to review their fairness.

  13. standard insurance
    Insurance written on the basis of regular morbidity underwriting assumptions
    and issued at normal rates.

  14. standard provisions
    Provisions setting forth the rights and obligations of and insurers and insured
    persons under health insurance policies. Originally introduced in 1912, these
    provisions were replaced by the Uniform Policy Provisions Law (UPPL).

  15. standard risk
    Person who, according to an insurer's underwriting standards, is entitled
    to purchase insurance without paying an extra premium or special restrictions.

  16. state (compulsory) disability plan
    Plan of short-term income replacement required by some states to cover eligible
    persons employed within that state.

  17. state insurance department
    An administrative agency that implements state insurance laws and supervises
    (within the scope of these laws) the activities of insurers operating within
    the state.

  18. stock life insurance company
    A life insurance company owned by stockholders who share in the company's
    surplus earnings.

  19. stop-loss insurance
    Protection purchased by self-funded buyers against the risk of large losses
    or a severe adverse claim experience.

  20. straight life annuity
    An annuity whose periodic payments stop when the annuitant dies.

  21. straight life insurance
    Whole life insurance on which premiums are payable for life.

  22. substandard insurance
    Insurance issued with an extra premium or special restriction to persons who
    do not qualify for insurance at standard rates.

  23. substandard risk
    Persons who cannot meet the health requirements of a standard health insurance
    policy.

  24. supplementary contract
    An agreement between a life insurance company and a policyholder or beneficiary
    by which the company retains the cash sum payable under an insurance policy
    and makes payments in accordance with the settlement option chosen.

  25. surgical expense insurance
    Insurance policies that provide benefits toward physicians' or surgeons' operating
    fees. Benefits may consist of scheduled amounts for each procedure.

  26. surgical schedule
    List of maximum amounts payable for various types of surgery; amounts are
    based on the complexity of the operation.

  27. survivorship insurance
    Another name for second-to-die insurance.


 

T

  1. tax treatment of life insurance payments
    The death benefits of a life insurance policy are exempt from taxes. Even
    with recent tax-rate reductions and a phased-in increase in the amount of
    a person's estate that is exempt from estate taxes, the tax-free nature
    of life insurance benefits makes them a powerful financial planning and wealth-preservation
    tool. Annuity payments are not tax exempt, although these products may include
    insurance "wrappers" with exempt benefits.

  2. term insurance
    A plan of insurance that covers the insured for only a certain period of time
    (term), not for his or her entire life. The policy pays death benefits only
    if the insured dies during the term.

  3. term rider
    Term insurance that is added to a whole life policy at the time of purchase
    or that may be added in the future.

  4. third-party administration (TPA)

    An outside person or firm (not a party to a contract) that maintains all records
    of persons covered under an insurance plan. The TPA also may pay claims using
    the draft book system.

  5. time limit

    A specified number of days in which a notice of claim or proof of a loss must
    be filed.

  6. title insurance
    Title insurance protects against the various financial losses associated with
    having the title on your home challenged, including court costs and loss of
    the property. For a one-time fee, most title insurers will investigate public
    records to make sure that your property is free of title defects. This coverage
    can benefit either the homeowner or the mortgage company, so you should know
    which kind you're paying for.

  7. total disability

    A disability that prevents a person from performing all occupational duties.
    The exact definition varies among policies.

  8. travel accident policies

    Limited contracts covering accidents that occur only while an insured person
    is traveling on business for an employer, away from the usual place of business,
    and on named conveyances.


 

U

  1. umbrella liability
    If your auto and home are insured with the same carrier, you probably can
    get supplemental liability coverage from your insurer. This is generally a
    very good and affordable idea, but only if you have underlying wealth that
    needs to be shielded from lawsuits. By insuring your car and home, it is cost-effective
    for your insurer to extend bigger-dollar liability coverage to both areas
    (hence the "umbrella" concept). If, for example, you have 100/300
    auto liability ($100,000 liability for each person insured in an accident;
    $300,000 total liability for the accident) and $100,000 liability on your
    homeowner's insurance, you can extend this to $1 million for a few hundred
    bucks a year.

  2. unallocated benefits

    Benefits with a maximum amount but without specific limits on the extent of
    benefit for each service rendered.

  3. underwriter

    (1) A company that receives the premiums and accepts responsibility for the
    fulfillment of the policy contract

    (2) The company employee who decides whether or not the company should assume
    a particular risk

    (3) The agent who sells the policy

  4. underwriting
    The underwriting process evaluates the likelihood an insured event will occur,
    determines its likely cost and develops an appropriate premium for the coverage
    that is competitive in the marketplace and remunerative to the insurance company
    writing the policy. For some standardized coverages that are highly competitive,
    underwriting may be somewhat besides the point -- the policy has to be priced
    according to marketplace pressures if the insurer wishes to remain in that
    line of coverage. Underwriting still plays a substantial role for many
    coverages,
    however, even those in the increasingly competitive businesses of auto, home
    and term life insurance. Insurance companies don't all target the same
    slice of the market in the same states, and thus often have different objectives
    in their underwriting efforts as well as different cost structures that determine
    operating profit margins in their underwriting calculations. Underwriting
    differences account in part for the substantial differences in insurance premiums
    for comparable coverages.

  5. unearned premium

    That portion of a premium already received by the insurer for which protection
    has not yet been provided.

  6. uninsured/underinsured motorists coverage
    In the best of all possible worlds, everyone would have adequate auto liability
    coverage. But there are people who drive around (often illegally) with no
    insurance or not enough insurance. If one of these folks happens to cause
    an accident, you might not be able to collect damages. Uninsured/underinsured
    motorists coverage -- usually called UM/UIM coverage -- will pay bodily injury
    costs caused by an uninsured or underinsured motorist. It's a required
    coverage in some states, and a prudent coverage anywhere. Usually, the limits
    are the same as the bodily injury portion of your auto liability coverage.
    UM/UIM coverage can supplement the benefits you can receive under a no-fault
    system.

  7. uninsurables

    High-risk persons who do not have health care coverage through private insurance
    and who fall outside the parameters of risks of standard health underwriting
    practices.

  8. universal life insurance
    Unlike traditional cash-value policies (known as "whole life"),
    universal life policy returns were freed from long-term, fixed-rate contracts
    and replaced with policies whose returns were tied to short-term interest
    rates and periodically adjusted. In addition, premiums and death benefits
    can be changed by the policyholder.


 

V

  1. variable annuity
    An annuity contract under which the monthly payments will vary because they
    are linked to the values of investments, such as common stocks. This contrasts
    with the fixed dollar annuity, which guarantees a fixed amount monthly.

  2. variable life insurance
    True investment characteristics were introduced with these policies, requiring
    that they be registered with the U.S. Securities and Exchange Commission.
    Policy investments are controlled by the policyholder and may be placed in
    a broad range of equity, bond and money-market instruments. Unlike universal
    life, premiums and death benefits are fixed in variable life policies.

  3. variable universal life insurance
    Investments, premiums and death benefits may all be controlled by the policyholder.
    If you know what you want and how to get there, variable universal life products
    are hard to beat, and many financial advisors rate them more highly than variable
    annuities.


 

W

  1. waiting period

    The time a person must wait from the date of acceptance into an eligible class
    (or from application) to the date the insurance becomes effective. While similar
    to elimination periods, waiting periods are often paid retroactively.

  2. waiver (exclusion endorsement)

    An agreement, attached to the policy and accepted by the insured, to eliminate
    a specified preexisting physical condition or specified hazard.

  3. waiver of premium
    A provision that sets certain conditions under which an insurance policy will
    be kept in full force by the company without the payment of premiums. It is
    used most frequently for those policyholders who become totally and permanently
    disabled but may be available in certain other cases.

  4. whole life insurance
    A plan of insurance for life, with premiums payable for a person's entire
    life.

  5. windstorm insurance
    Windstorm coverage pays for losses to your property that result from a windstorm.
    The coverage acts like a flood or earthquake policy in that it pays for damage
    to the dwelling, and, in some cases, for damage to your personal property
    and for living expenses if your home becomes uninhabitable. If you live in
    a coastal area, you'll probably need to purchase separate windstorm coverage
    on your house. In areas where coverage is scarce, states sometime offer market
    assistance programs or joint underwriting associations to help homeowners
    find a carrier.

  6. workers' compensation

    Liability insurance requiring certain employers to pay benefits and furnish
    medical care to employees for on-the-job injuries, and to pay benefits to
    dependents of employees killed by occupational accidents.

  7. written premiums

    The entire amount in premiums due in a year for all policies issued by an
    insurance company.


 

X


 

Y


 

Z




Contact

Minichiello Insurance Agency


229 South Main Street
Bradford, MA 01835

Office Hours: M-F 8:30am-5pm
Evenings By Appointment

Tel: 978-372-1229
Fax: 978-372-1334
Email: info@nullHaverhillInsurance.com



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