Docstoc

Insurance Glossary

Document Sample
Insurance Glossary Powered By Docstoc
					A Absolute Liability Accident Accident and Health Insurance

Adjuster Agent

AIDS

Amendment

Annual Statement

Arson

Benefits Boiler and Machinery Insurance

Broker

Burglary Business income exposure Business interruption exposure Cancellation Cargo Insurance Cash Surrender Value

Casualty Insurance

Catastrophe

Cede Certificate of Insurance

Change of Occupation Clause

Claim Claims Adjustor Common law Comparative Negligence

Compulsory Insurance Concealment Conditions Confining Sickness Consequential Loss Contingent Beneficiary

Contract

Contractual Liability Coverage Covered

Covered Expenses

Death Benefit

Declarations

Declination

Deductible Dependency Period

Deposit Premium

Depreciation

Direct Loss Disability Disability Benefit

Dismemberment Dividend Double Indemnity Effective Date Eligibility Date Eligible Employees Embezzlement Endorsements

Endowment

Entire Contract Clause

Estate Evidence of Insurability

Exclusions or Exception Extortion

Family Policy

Family Policy

Fidelity Bond Fidelity Bond Fire Fire First Party Coverage

First Party Coverage

Fixed Annuity Fixed Annuity Fixed Annuity Fixed Period Option Fortuitous Loss General Liability Insurance

Grace Period

Gross estate Gross Negligence

Gross Premium Group Insurance

Inheritance tax Insurance

INSURANCE

Insurance Company Insured

Insurer

Lapse Level Premium Liability Life Insurance

Loss Loss of use

Malpractice Master Policy

Material Damage

Medical Examination

Named Perils

Negligence Net Premium

Nonconfining Sickness Noncontributory

Nondisabling Injury Occupational Hazards

Occurrence

Pension Benefits Pension Plan

Personal Accident Insurance Personal Injury Protection (PIP)

Policy

Policy Term Policyholder

Preexisting Condition

Premium

Primary Beneficiary Proof of Loss

Property Insurance

Provision

Proximate Cause Qualification Period Quote

Rate Rate Rehabilitation

Reimbursement

Reinstatement Reinsurance

Renewal Residual Disability

Rider

Risk

Robbery Settlement Options

Special Damages Standard Risk

Surrender charge

Third Party

Time Limit Tornado

Total Disability

Uninsurable Risk Waiting Period

Waiver

Will

A Liability for damages even though fault or negligence cannot be proven. An event or occurrence which is unforeseen and unintended. A type of coverage that pays benefits, sometimes including reimbursement for loss of income, in case of sickness, accidental injury, or accidental death. A person who investigates and settles losses for an insurance carrier. An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer. Acquired immune deficiency syndrome. A fatal, incurable disease caused by a virus that can damage the brain and destroy the body's ability to fight off illness. A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and the policy holder or his authorized representative. The annual report, as of December 31, of an insurer to a state insurance department, showing assets and liabilities, receipts and disbursements, and other financial data. The wilful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent. The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage. Coverage for loss arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage to other property, and business interruption losses. A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage required by the customer. Breaking and entering into another person's property with felonious intent. Lost profits resulting from damage to property that halts the business. see Business income exposure. The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company. Type of ocean marine insurance that protects the shipper of the goods against financial loss if the goods are damaged or lost. The amount available in cash upon voluntary termination of a Life policy by its owner before it becomes payable by death or maturity. Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate glass, burglary, robbery and workers' compensation. Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado.

To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer. A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable to the member. Provision in a health insurance policy stipulating that if the insured changes to a more hazardous occupation, the benefits are reduced based on the amount of benefits the premium would have purchased for the more hazardous occupation. A request for payment of a loss which may come under the terms of an insurance contract. Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor. the law that has evolved over time as a result of previous court decisions, rather than having been enacted by a legislative body. Under this concept a plaintiff (the person bringing suit) may recover damages even though guilty of some negligence. His or her recovery, however, is reduced by the amount or percent of that negligence. Any form of insurance which is required by law. Deliberate failure of an applicant for insurance to reveal a material fact to the insurer. Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform. An illness that confines an insured person to his home or to a hospital. Financial loss occurring as the consequence of some other loss. Often called an indirect loss. The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the insured is living. A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy. Legal liability of another party that the business firm agrees to assume by a written or oral contract. The scope of protection provided under a contract of insurance; any of several risks covered by a policy. A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits under the plan. Hospital, medical, and miscellaneous health care expenses incurred by the insured that entitle him/her to a payment of benefits under a health insurance policy. Found most often in connection with major medical plans, the term defines, by either description, reasonableness, or necessity to specify the type and amount of expense which will be considered in the calculation of benefits. A payment made to a designated beneficiary upon the death of the employee annuitant.

Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and identification of the property or life to be insured. The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other pertinent factors. An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss. Period of time following the readjustment period during which the surviving spouse's children are under eighteen and therefore dependent of the parent. The premium deposit paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when billed. A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss. Financial loss that results directly from an insured peril. a physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total. Periodic payments, usually monthly, payable to participants under some retirement plans, if such participants are eligible for the benefits and become totally and permanently disabled prior to the normal retirement date. Loss of body members (limbs), or use thereof, or loss of sight due to injury. Portion of the premium which is returned to the insured because of favourable experience by the company. Payment of twice the policy's normal benefit in case of loss resulting from specified causes or under specified circumstances. The date on which the insurance under a policy begins. The date on which an individual member of a specified group becomes eligible to apply for insurance under the insurance plan. Those members of a group who have met the eligibility requirements under a group life or health insurance plan. Fraudulent use or taking of another's property or money which has been entrusted to one's care. An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of that contract. Life insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the insured dies prior to that date. Provision in life insurance policies stating that the life insurance policy and attached application constitute the entire contract between the parties. The assets and liabilities of a person left at death. Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance.

Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments. Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured, relative, or invitee who is being held captive. 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. 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. A form of protection which reimburses an employer for losses caused by dishonest or fraudulent acts of employees. A form of protection which reimburses an employer for losses caused by dishonest or fraudulent acts of employees. A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who caused the accident. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who caused the accident. Annuity whose periodic payment is a guaranteed fixed amount. Annuity whose periodic payment is a guaranteed fixed amount. Fixed Annuity Life insurance settlement option in which the policy proceeds are paid out in fixed amounts. Unforeseen and unexpected loss that occurs as a result of chance. Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operation of machinery, as well as professional services. A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues. All of the assets and liabilities owned at death. the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. The premium paid by the policyholder. Insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are affiliated.

A tax on the right of an heir to receive property at the death of another. A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions. Protection by written contract against the financial hazards (in whole or in part) of the happenings of specified fortuitous events. Insurance providing for payment of a specified amount on the insured's death, either to his or her estate or to a designated beneficiary; or in the case of an endowment policy, to the policy holder at a specified date. Any corporation primarily engaged in the business of furnishing insurance protection to the public. A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy terms. The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public. The termination or discontinuance of an insurance policy due to nonpayment of a premium. A premium which remains unchanged throughout the life of a policy. Any legally enforceable obligation. Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. By paying an agreed premium over a fixed term, the policy holder is entitled to receive a financial payout in the event that they die prior to the end date of the fixed term. The happening of the event for which insurance pays. Value assigned to not having damaged property available, e.g., the cost of renting a replacement vehicle while one's car is being repaired. Improper care or treatment by a physician, hospital, or other provider of health care. A policy that is issued to an employer or trustee, establishing a group insurance plan for designated members of an eligible group. Insurance against damage to a vehicle itself. It includes automobile comprehensive, collision, fire and theft. Material damage and physical damage are terms that often are used inter- changeably. The examination given by a qualified physician to determine to the insurability of an applicant. A medical examination may also be used to determine whether an insured claiming disability is actually disabled. Coverage in a property policy that provides protection against loss from only the perils specifically listed in the policy rather than protection from physical loss. Examples of named perils are fire, windstorm, theft, smoke, etc...

Failure to use the care that a reasonable and prudent person would have used under the same or similar circumstances. The portion of the premium rate which is designed to cover benefits of the policy, but not expenses, contingencies, or profit. The term is also used to describe the portion of the premium remitted to the home office by an agent after deduction of the agent's commission. A sickness that disables the insured person but does not confine him to his home or a hospital. A term applied to employee benefit plans under which the employer bears the full cost of the benefits for the employees. One hundred percent of the eligible employees must be insured. An injury which may require medical care, but does not result in loss of working time or income. Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that can be expected. An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that results in bodily injury or property damage during the period of an insurance policy. A series of payments to be provided in accordance with the plan of benefits. A plan established and maintained by an employer, group of employers, union or any combination, primarily to provide for the payment of definitely determinable benefits to participants after retirement. Personal Accident Insurance covers the policy holder against personal injury as a result of an accident. First-party no-fault coverage in which an insurer pays, within the specified limits, the wage loss, medical, hospital and funeral expenses of the insured. The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company. A contract of insurance. The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract. That period for which an insurance policy provides coverage. 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. A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance. A physical and/or mental condition of an insured which first manifested itself prior to the issuance of his/her policy or which existed prior to issuance and for which treatment was received. A physical condition that existed before the effective date of coverage.

The sum paid by a policyholder to keep an insurance policy in force. The fee you pay for insurance, usually a recurring expense paid at fixed intervals. See Beneficiary. Documentary evidence required by an insurer to prove a valid claim exists. It usually consists of a claim form completed by the insured and the insured's attending physician. For medical expense insurance itemized bills must also be included. Insurance providing financial protection against the loss of, or damage to, real and personal property caused by such perils as fire, theft, windstorm, hail, explosion, riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and civil commotion, and smoke. Provides financial protection against loss or damage to the insured's property caused by such perils as fire, windstorm, hail, etc... A part (clause, sentence, paragraph, etc.) of an insurance contract that describes or explains a feature, benefit, condition, requirement, etc. of the insurance protection afforded by the contract. The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage. The period during which the insured must be totally disabled before becoming eligible for residual disability benefits. A price estimate given to the potential consumer as he/she decides to which company a formal application will be submitted. Company may be legally bound to honour this quote in some jurisdictions and/or lines of business. Rate The pricing factor upon which the insurance buyer's premium is based. (1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some long- term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is retraining or attempting to resume productive employment. The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount specified in the policy. The resumption of coverage under a policy which has lapsed. The acceptance by one or more insurers, called Reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage. Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term. A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the percentage of earnings loss. A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits otherwise payable. The chance of loss. Also used to refer to the insured or to property covered by a policy.

The taking of property from a person by force or threat of violence. The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid. Compensation awarded for actual economic losses, such as medical expenses and lost wages. A person who, according to a company's underwriting standards, is entitled to purchase insurance protection without extra rating or special restrictions. An amount retained by the issuer of a life insurance policy when a policy is cancelled, typically assessed only during the first five to ten years of a policy. The claimant under a liability policy. So called because the person making the claim is not one of the two parties, insured and insurer, to the insurance contract. Third party claim: a demand made by a person against a policyholder of another company and any payment that will be made by that company. The period of time during which a notice of claim or proof of loss must be filed. A whirling wind over land, accompanied by a funnel-shaped cloud. It is usually very violent and destructive in a narrow path, often for many miles. An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of work. (This wording varies among insurance companies.) One not acceptable for insurance due to excessive risk. The length of time an employee must wait from his/her date of employment or application for coverage, to the date his/her insurance is effective. An agreement attached to a policy which exempts from coverage certain disabilities or injuries that otherwise would be covered by the policy. The legal statement of a person's wishes concerning the disposal of his or her property after death.

Boiler and Machinery Insurance Broker Burglary Business income exposure Business interruption exposure Cancellation Cargo Insurance Cash Surrender Value

Casualty Insurance Catastrophe Cede Certificate of Insurance Change of Occupation Clause Claim Claims Adjustor Common law Comparative Negligence Compulsory Insurance Concealment Conditions Confining Sickness Consequential Loss Contingent Beneficiary Contract Contractual Liability Coverage Covered Covered Expenses Death Benefit Declarations Declination Deductible Dependency Period Deposit Premium Depreciation Direct Loss Disability Disability Benefit Dismemberment Dividend Double Indemnity Effective Date Eligibility Date Eligible Employees Embezzlement Endorsements Endowment Entire Contract Clause Estate Evidence of Insurability Exclusions or Exception Extortion Family Policy Family Policy Fidelity Bond Fidelity Bond Fire Fire First Party Coverage First Party Coverage

Fixed Annuity Fixed Period Option Fixed Period Option Fortuitous Loss Fortuitous Loss Unforeseen and unexpected loss that occurs as a result of chance. General Liability Insurance Grace Period Gross estate Gross Negligence Gross Premium Group Insurance Inheritance tax Insurance Insurance Company Insured Insurer Lapse Level Premium Liability Life Insurance Loss Loss of use Malpractice Master Policy Material Damage Medical Examination Named Perils Negligence Net Premium Nonconfining Sickness Noncontributory Nondisabling Injury Occupational Hazards Occurrence Pension Benefits Pension Plan Personal Accident Insurance Personal Injury Protection (PIP) Policy Policy Term Policy Term That period for which an insurance policy provides coverage. Policyholder Preexisting Condition Premium Primary Beneficiary Proof of Loss Property Insurance Provision Proximate Cause

Qualification Period Quote Rehabilitation Reimbursement Reinstatement Reinsurance Renewal Residual Disability Rider Risk Robbery Settlement Options Special Damages Standard Risk Surrender charge Third Party Time Limit Tornado Total Disability Uninsurable Risk Waiting Period Waiver Will Agent

Accident and Health Insurance Accident Absolute Liability A Agent AIDS Amendment Annual Statement Arson Benefits Boiler and Machinery Insurance Broker Burglary Business income exposure Business interruption exposure Cancellation Cargo Insurance Cash Surrender Value Casualty Insurance

A type of coverage that pays benefits, sometimes including reimbursement for loss of income, in case of sickness, accidental injury, or accidental death. An event or occurrence which is unforeseen and unintended. Liability for damages even though fault or negligence cannot be proven. A person who investigates and settles losses for an insurance carrier. An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for Acquired immune deficiency syndrome. A fatal, incurable disease caused by a virus that can damage the brain and destroy the body's ability to fight off illness. A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and the policy holder or his authorized The annual report, as of December 31, of an insurer to a state insurance department, showing assets and liabilities, receipts and disbursements, and other The wilful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent. The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage. Coverage for loss arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage Breaking and entering into another person's property with felonious intent. Lost profits resulting from damage to property that halts the business. see Business income exposure. The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company. Type of ocean marine insurance that protects the shipper of the goods against financial loss if the goods are damaged or lost. The amount available in cash upon voluntary termination of a Life policy by its owner before it becomes payable by death or maturity. Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate

Catastrophe Cede Certificate of Insurance Change of Occupation Clause Claim Claims Adjustor Common law Comparative Negligence Compulsory Insurance Concealment Conditions Confining Sickness Consequential Loss Contingent Beneficiary Contract Contractual Liability Coverage Covered Covered Expenses

Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado. To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer. A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable Provision in a health insurance policy stipulating that if the insured changes to a more hazardous occupation, the benefits are reduced based on the amount of benefits A request for payment of a loss which may come under the terms of an insurance contract. Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor. the law that has evolved over time as a result of previous court decisions, rather than having been enacted by a legislative body. Under this concept a plaintiff (the person bringing suit) may recover damages even though guilty of some negligence. His or her recovery, however, is reduced by Any form of insurance which is required by law. Deliberate failure of an applicant for insurance to reveal a material fact to the insurer. Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform. An illness that confines an insured person to his home or to a hospital. Financial loss occurring as the consequence of some other loss. Often called an indirect loss. The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the insured is living. A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the Legal liability of another party that the business firm agrees to assume by a written or oral contract. The scope of protection provided under a contract of insurance; any of several risks covered by a policy. A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is Hospital, medical, and miscellaneous health care expenses incurred by the insured that entitle him/her to a payment of benefits under a health insurance policy.

Death Benefit Declarations Declination Deductible Dependency Period Deposit Premium Depreciation Direct Loss Disability Disability Benefit Dismemberment Dividend Double Indemnity Effective Date Eligibility Date Eligible Employees Embezzlement Endorsements Endowment

A payment made to a designated beneficiary upon the death of the employee annuitant. Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other pertinent factors. An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss. Period of time following the readjustment period during which the surviving spouse's children are under eighteen and therefore dependent of the parent. The premium deposit paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at Financial loss that results directly from an insured peril. a physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total. Periodic payments, usually monthly, payable to participants under some retirement plans, if such participants are eligible for the benefits and become Loss of body members (limbs), or use thereof, or loss of sight due to injury. Portion of the premium which is returned to the insured because of favourable experience by the company. Payment of twice the policy's normal benefit in case of loss resulting from specified causes or under specified circumstances. The date on which the insurance under a policy begins. The date on which an individual member of a specified group becomes eligible to apply for insurance under the insurance plan. Those members of a group who have met the eligibility requirements under a group life or health insurance plan. Fraudulent use or taking of another's property or money which has been entrusted to one's care. An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of Life insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the insured dies prior to that date.

Entire Contract Clause Estate Evidence of Insurability Exclusions or Exception Extortion Family Policy Fidelity Bond Fire First Party Coverage Fixed Annuity Fixed Period Option Fortuitous Loss Family Policy Fidelity Bond Fire First Party Coverage Fixed Annuity Fixed Period Option Fortuitous Loss

Provision in life insurance policies stating that the life insurance policy and attached application constitute the entire contract between the parties. The assets and liabilities of a person left at death. Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance. Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments. Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured, relative, or invitee who is being held captive. A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and A form of protection which reimburses an employer for losses caused by dishonest or fraudulent acts of employees. A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who Annuity whose periodic payment is a guaranteed fixed amount. Life insurance settlement option in which the policy proceeds are paid out in fixed amounts. Unforeseen and unexpected loss that occurs as a result of chance. A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and A form of protection which reimburses an employer for losses caused by dishonest or fraudulent acts of employees. A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who Annuity whose periodic payment is a guaranteed fixed amount. Life insurance settlement option in which the policy proceeds are paid out in fixed amounts. Unforeseen and unexpected loss that occurs as a result of chance.

General Liability Insurance Grace Period Gross estate Gross Negligence Gross Premium Group Insurance Inheritance tax Insurance Insurance Company Insured Insurer Lapse Level Premium Liability Life Insurance

Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, A specified period after a premium payment is due, in which the policyholder may make such payment, and during which the protection of the policy continues. All of the assets and liabilities owned at death. the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. The premium paid by the policyholder. Insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are affiliated. A tax on the right of an heir to receive property at the death of another. A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed Any corporation primarily engaged in the business of furnishing insurance protection to the public. A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the The termination or discontinuance of an insurance policy due to non-payment of a premium. A premium which remains unchanged throughout the life of a policy. Any legally enforceable obligation. Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. By paying an agreed premium over a fixed term, Insurance providing for payment of a specified amount on the insured's death, either to his or her estate or to a designated beneficiary; or in the case of an endowment The happening of the event for which insurance pays. Value assigned to not having damaged property available, e.g., the cost of renting a replacement vehicle while one's car is being repaired. Improper care or treatment by a physician, hospital, or other provider of health care.

Loss Loss of use Malpractice

Master Policy Material Damage Medical Examination Named Perils Negligence Net Premium

Nonconfining Sickness Noncontributory

A policy that is issued to an employer or trustee, establishing a group insurance plan for designated members of an eligible group. Insurance against damage to a vehicle itself. It includes automobile comprehensive, collision, fire and theft. Material damage and physical damage are terms that The examination given by a qualified physician to determine to the insurability of an applicant. A medical examination may also be used to determine whether an Coverage in a property policy that provides protection against loss from only the perils specifically listed in the policy rather than protection from physical loss. Failure to use the care that a reasonable and prudent person would have used under the same or similar circumstances. The portion of the premium rate which is designed to cover benefits of the policy, but not expenses, contingencies, or profit. The term is also used to describe the portion of the premium remitted to the home office by an agent after deduction of the agent's commission. A sickness that disables the insured person but does not confine him to his home or a hospital. A term applied to employee benefit plans under which the employer bears the full cost of the benefits for the employees. One hundred percent of the eligible employees must be insured. An injury which may require medical care, but does not result in loss of working time or income. Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that results in bodily injury or property damage during Personal Accident Insurance covers the policy holder against personal injury as a result of an accident. The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company. A contract of insurance. The legal That period for which an insurance policy provides coverage. 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. A person A series of payments to be provided in accordance with the plan of benefits. A plan established and maintained by an employer, group of employers, union or any combination, primarily to provide for the payment of definitely

Nondisabling Injury Occupational Hazards Occurrence Personal Accident Insurance Policy Policy Term Policyholder Pension Benefits Pension Plan

Personal Injury Protection (PIP) Policy Term Preexisting Condition Premium Primary Beneficiary Proof of Loss Property Insurance Provision Proximate Cause Qualification Period Quote Rate Rehabilitation Reimbursement Reinstatement Reinsurance Renewal Residual Disability Rider

First-party no-fault coverage in which an insurer pays, within the specified limits, the wage loss, medical, hospital and funeral expenses of the insured. That period for which an insurance policy provides coverage. A physical and/or mental condition of an insured which first manifested itself prior to the issuance of his/her policy or which existed prior to issuance and for which The sum paid by a policyholder to keep an insurance policy in force. The fee you pay for insurance, usually a recurring expense paid at fixed intervals. See Beneficiary. Documentary evidence required by an insurer to prove a valid claim exists. It usually consists of a claim form completed by the insured and the insured's attending Insurance providing financial protection against the loss of, or damage to, real and personal property caused by such perils as fire, theft, windstorm, hail, explosion, A part (clause, sentence, paragraph, etc.) of an insurance contract that describes or explains a feature, benefit, condition, requirement, etc. of the insurance The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage. The period during which the insured must be totally disabled before becoming eligible for residual disability benefits. A price estimate given to the potential consumer as he/she decides to which company a formal application will be submitted. Company may be legally bound to The pricing factor upon which the insurance buyer's premium is based. (1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some longterm disability policies that provides for continuation of The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount specified in the policy. The resumption of coverage under a policy which has lapsed. The acceptance by one or more insurers, called Reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new policy term. A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits otherwise payable.

Risk Robbery Settlement Options Special Damages Standard Risk Surrender charge Third Party Time Limit Tornado Total Disability Uninsurable Risk Waiting Period Waiver Will

The chance of loss. Also used to refer to the insured or to property covered by a policy. The taking of property from a person by force or threat of violence. The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid. Compensation awarded for actual economic losses, such as medical expenses and lost wages. A person who, according to a company's underwriting standards, is entitled to purchase insurance protection without extra rating or special restrictions. An amount retained by the issuer of a life insurance policy when a policy is cancelled, typically assessed only during the first five to ten years of a policy. The claimant under a liability policy. So called because the person making the claim is not one of the two parties, insured and insurer, to the insurance contract. The period of time during which a notice of claim or proof of loss must be filed. A whirling wind over land, accompanied by a funnelshaped cloud. It is usually very violent and destructive in a narrow path, often for many miles. An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of One not acceptable for insurance due to excessive risk. The length of time an employee must wait from his/her date of employment or application for coverage, to the date his/her insurance is effective. An agreement attached to a policy which exempts from coverage certain disabilities or injuries that otherwise would be covered by the policy. The legal statement of a person's wishes concerning the disposal of his or her property after death.

A

A person who investigates and settles losses for an insurance carrier.

Absolute Liability Liability for damages even though fault or negligence cannot be proven.

Accident

An event or occurrence which is unforeseen and unintended.

A type of coverage that pays benefits, sometimes including reimbursement for loss Accident and Health Insurance of income, in case of sickness, accidental injury, or accidental death. Agent An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer. Acquired immune deficiency syndrome. A fatal, incurable disease caused by a virus that can damage the brain and destroy the body's ability to fight off illness. A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and the policy holder or his authorized representative.

AIDS

Amendment

Annual Statement The annual report, as of December 31, of an insurer to a state insurance department, showing assets and liabilities, receipts and disbursements, and other financial data. Arson The wilful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent. The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage. Coverage for loss arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage to other property, and business interruption losses. A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage required by the customer. Breaking and entering into another person's property with felonious intent.

Benefits

Boiler and Machinery Insurance Broker

Burglary

Business income exposure Business interruption exposure

Lost profits resulting from damage to property that halts the business.

see Business income exposure.

Cancellation

The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company. Type of ocean marine insurance that protects the shipper of the goods against financial loss if the goods are damaged or lost. The amount available in cash upon voluntary termination of a Life policy by its owner before it becomes payable by death or maturity. Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate glass, burglary, robbery and workers' compensation. Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado. To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer. A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable to the member. Provision in a health insurance policy stipulating that if the insured changes to a more hazardous occupation, the benefits are reduced based on the amount of benefits the premium would have purchased for the more hazardous occupation. A request for payment of a loss which may come under the terms of an insurance contract. Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor. the law that has evolved over time as a result of previous court decisions, rather than having been enacted by a legislative body. Under this concept a plaintiff (the person bringing suit) may recover damages even though guilty of some negligence. His or her recovery, however, is reduced by the amount or percent of that negligence. Any form of insurance which is required by law.

Cargo Insurance

Cash Surrender Value Casualty Insurance Catastrophe

Cede

Certificate of Insurance Change of Occupation Clause Claim

Claims Adjustor

Common law

Comparative Negligence Compulsory Insurance Concealment

Deliberate failure of an applicant for insurance to reveal a material fact to the insurer. Provisions inserted in an insurance contract that qualify or place limitations on the insurer's promise to perform.

Conditions

Confining Sickness Consequential Loss Contingent Beneficiary Contract

An illness that confines an insured person to his home or to a hospital.

Financial loss occurring as the consequence of some other loss. Often called an indirect loss. The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the insured is living. A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy. Legal liability of another party that the business firm agrees to assume by a written or oral contract. The scope of protection provided under a contract of insurance; any of several risks covered by a policy. A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits under the plan.

Contractual Liability Coverage

Covered

Covered Expenses Hospital, medical, and miscellaneous health care expenses incurred by the insured that entitle him/her to a payment of benefits under a health insurance policy. Found most often in connection with major medical plans, the term defines, by either description,made to a designated beneficiary upon the death and amount of expense A payment reasonableness, or necessity to specify the type of the employee Death Benefit annuitant. Declarations Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and identification of the property or life to be insured. The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other pertinent factors. An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss. Period of time following the readjustment period during which the surviving spouse's children are under eighteen and therefore dependent of the parent.

Declination

Deductible

Dependency Period

Deposit Premium The premium deposit paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when billed. Depreciation A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss.

Direct Loss

Financial loss that results directly from an insured peril.

Disability

a physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total.

Disability Benefit Periodic payments, usually monthly, payable to participants under some retirement plans, if such participants are eligible for the benefits and become totally and permanently disabled prior to the normal retirement date. Dismemberment Loss of body members (limbs), or use thereof, or loss of sight due to injury.

Dividend

Portion of the premium which is returned to the insured because of favourable experience by the company.

Double Indemnity Payment of twice the policy's normal benefit in case of loss resulting from specified causes or under specified circumstances. Effective Date The date on which the insurance under a policy begins.

Eligibility Date

The date on which an individual member of a specified group becomes eligible to apply for insurance under the insurance plan. Those members of a group who have met the eligibility requirements under a group life or health insurance plan. Fraudulent use or taking of another's property or money which has been entrusted to one's care. An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of that contract. Life insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the insured dies prior to that date. Provision in life insurance policies stating that the life insurance policy and attached application constitute the entire contract between the parties. The assets and liabilities of a person left at death.

Eligible Employees Embezzlement

Endorsements

Endowment

Entire Contract Clause Estate

Evidence of Insurability

Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance.

Exclusions or Exception Extortion

Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments. Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured, relative, or invitee who is being held captive. 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 of protection which reimburses an employer for losses caused by dishonest A form policy is issued. or fraudulent acts of employees.

Family Policy

Fidelity Bond

Fire

A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who caused the accident. Annuity whose periodic payment is a guaranteed fixed amount.

First Party Coverage Fixed Annuity

Fixed Period Option Fortuitous Loss

Life insurance settlement option in which the policy proceeds are paid out in fixed amounts. Unforeseen and unexpected loss that occurs as a result of chance.

General Liability Insurance Grace Period

Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operation ofperiod after a premiumprofessionaldue, in which the policyholder may A specified machinery, as well as payment is services. make such payment, and during which the protection of the policy continues.

Gross estate

All of the assets and liabilities owned at death.

Gross Negligence

the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. The premium paid by the policyholder.

Gross Premium

Group Insurance

Insurance written on a number of people under a single master policy, issued to their employer or to an association with which they are affiliated.

Inheritance tax

A tax on the right of an heir to receive property at the death of another.

Insurance

Insurance Company Insured

A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions. Protection by written contract against the financial hazards (in whole or in part) of Any corporation primarily engaged in the business of furnishing insurance protection to the public. A person or organization covered by an insurance policy, including the "named insured" and any other parties for whom protection is provided under the policy terms. The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public. The termination or discontinuance of an insurance policy due to non-payment of a premium. A premium which remains unchanged throughout the life of a policy.

Insurer

Lapse

Level Premium

Liability

Any legally enforceable obligation.

Life Insurance

Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. By paying an agreed premium over a fixed term, the policy holder is entitled to receive a financial payout in the event that they die prior to the end providing for payment of a specified amount on the insured's death, Insurance date of the fixed term. either to his or her estate or to a designated beneficiary; or in the case of an endowment policy, to the policy holder at a specified date.

Loss

The happening of the event for which insurance pays.

Loss of use

Value assigned to not having damaged property available, e.g., the cost of renting a replacement vehicle while one's car is being repaired.

Glossary of useful insurance terms
A A Absolute Liability Accident A Liability for damages even though fault or negligence cannot be proven. An event or occurrence which is unforeseen and

unintended. A type of coverage that pays benefits, sometimes including reimbursement for loss of income, in case of sickness, accidental injury, or accidental death. Insurance of individuals or groups against economic risks in the event of death or temporary or permanent disability by accident. A branch of non-life insurance. The risk that arises when a large number of individual risks are correlated such that a single event will affect many or all of these risks. A person who investigates and settles losses for an insurance carrier. An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance,

Accident and Health Insurance

Accident insurance

Accumulation risk Adjuster

Agent

and provides service to the policyholder for the insurer. A formal document changing the provisions of an insurance policy signed jointly by the insurance company officer and

Amendment

the policy holder or his authorized representative. The annual report, as of December 31, of an insurer to a state insurance department, showing assets and liabilities,

Annual Statement

receipts and disbursements, and other financial data. The wilful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent. Insurance of accident and liability risks, as well as hull damage, connected with the operation of aircraft. The amount payable by the insurance company to a

Arson Aviation insurance B Benefits

claimant, assignee or beneficiary under each coverage. Coverage for loss arising out of the operation of pressure, mechanical, and electrical equipment. It covers loss of the boiler and machinery itself, damage to other property, and

Boiler and Machinery Insurance

business interruption losses. A marketing specialist who represents buyers of property and liability insurance and who deals with either agents or companies in arranging for the coverage required by the

Broker Burglary

customer. Breaking and entering into another person's property with felonious intent.

Glossary of useful insurance terms
Lost profits resulting from damage to property that halts Business income exposure the business. Insurance covering the loss of earnings resulting from, and occurring after, destruction of property; also known as "loss Business interruption Business interruption exposure of profits" or "business income protection insurance". see Business income exposure. The discontinuance of an insurance policy before its normal Cancellation expiration date, either by the insured or the company. Maximum amount of risk that can be accepted in insurance. One factor in determining capacity is government regulations that define minimum solvency requirements. Capacity also refers to the amount of insurance coverage allocated to a particular policyholder or in the marketplace Capacity in general. Type of ocean marine insurance that protects the shipper of the goods against financial loss if the goods are Cargo Insurance damaged or lost. The amount available in cash upon voluntary termination of a Life policy by its owner before it becomes payable by Cash Surrender Value death or maturity. Branch of insurance - mainly comprising accident and liability business - which is separate from property, engineering and life insurance. In the US this term is used for non-life insurance other than fire, marine and surety Casualty insurance business. Insurance concerned with the insured's legal liability for injuries to others or damage to other persons' property; also encompasses such forms of insurance as plate glass, Casualty Insurance Catastrophe burglary, robbery and workers' compensation. Event which causes a loss of extraordinary magnitude, such as a hurricane or tornado. Risk-based securities that allow (re)insurance companies to transfer natural catastrophe insurance risk to institutional investors in the form of bonds. Cat bonds help to spread Catastrophe bonds (cat bonds) Cede peak exposures (see insurance-linked securities). To transfer all or part of a risk written by an insurer (the ceding, or primary company) to a reinsurer. A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance Certificate of Insurance benefits and principal provisions applicable to the member. Insurance that is reinsured: the passing of the insurer's risks to the reinsurer against payment of a premium. The Cession insurer is referred to as the ceding company or cedent.

Glossary of useful insurance terms

Provision in a health insurance policy stipulating that if the insured changes to a more hazardous occupation, the benefits are reduced based on the amount of benefits the premium would have purchased for the more hazardous

Change of Occupation Clause Claim Claim

occupation. Demand by an insured for indemnity under an insurance contract. A request for payment of a loss which may come under the terms of an insurance contract. Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor. The work in connection with the investigation, settlement and payment of claims from the time of their occurrence until settlement. All claims payments plus the adjustment in the outstanding claims provision of a business year and claim adjustment expenses. Sum of claims paid, change in the provisions for unpaid claims and claim adjustment expenses in relation to premiums earned. Arrangement by which a number of insurers and/or reinsurers share a risk. Remuneration paid by the insurer to its agents, brokers or intermediaries, or by the reinsurer to the insurer, for costs in connection with the acquisition and administration

Claims Adjustor

Claims handling

Claims incurred and claim

Claims ratio Coinsurance

Commission

of insurance business. the law that has evolved over time as a result of previous court decisions, rather than having been enacted by a legislative body. Transaction in which policyholders or insurers surrender all rights and are relieved from all obligations under an insurance or reinsurance contract in exchange for a single

Common law

Commutation

current payment. Under this concept a plaintiff (the person bringing suit) may recover damages even though guilty of some negligence. His or her recovery, however, is reduced by the

Comparative Negligence Compulsory Insurance Concealment

amount or percent of that negligence. Any form of insurance which is required by law. Deliberate failure of an applicant for insurance to reveal a material fact to the insurer. Provisions inserted in an insurance contract that qualify or

Conditions Confining Sickness Consequential Loss

place limitations on the insurer's promise to perform. An illness that confines an insured person to his home or to a hospital. Financial loss occurring as the consequence of some other loss. Often called an indirect loss.

Glossary of useful insurance terms
The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the Contingent Beneficiary insured is living. A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the Contract Contractual Liability Cover Coverage policy. Legal liability of another party that the business firm agrees to assume by a written or oral contract. Insurance and reinsurance protection based on a

contractual agreement. The scope of protection provided under a contract of insurance; any of several risks covered by a policy. A person covered by a pension plan is one who has fulfilled the eligibility requirements in the plan, for whom benefits have accrued, or are accruing, or who is receiving benefits

Covered

under the plan. Hospital, medical, and miscellaneous health care expenses incurred by the insured that entitle him/her to a payment of benefits under a health insurance policy. Found most often in connection with major medical plans, the term defines, by either description, reasonableness, or necessity to specify the type and amount of expense which will be

Covered Expenses

considered in the calculation of benefits. Insurance against financial losses sustained through the failure, for commercial reasons, of policyholders' clients to pay for goods or services supplied to them. A payment made to a designated beneficiary upon the

Credit insurance D Death Benefit

death of the employee annuitant. Statements in an insurance contract used for underwriting and rating

that

provide and

information about the property or life to be insured and purposes Declarations identification of the property or life to be insured. The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other Declination pertinent factors. An amount which a policyholder agrees to pay, per claim or Deductible per accident, toward the total amount of an insured loss. Period of time following the readjustment period during which the surviving spouse's children are under eighteen Dependency Period and therefore dependent of the parent. The premium deposit paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when Deposit Premium billed.

Glossary of useful insurance terms

A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of

Depreciation Direct Loss

loss. Financial loss that results directly from an insured peril. Liability insurance for directors and officers of an entity, providing cover for their personal legal liability towards shareholders, creditors, employees and others arising from

Directors' and officers'

wrongful acts such as errors and omissions. a physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total. Periodic payments, usually monthly, payable to participants under some retirement plans, if such participants are eligible for the benefits and become totally and

Disability

Disability Benefit Disability insurance Dismemberment Dividend

permanently disabled prior to the normal retirement date. Insurance against the incapacity to exercise a profession as a result of sickness or other infirmity. Loss of body members (limbs), or use thereof, or loss of sight due to injury. Portion of the premium which is returned to the insured because of favourable experience by the company. Payment of twice the policy's normal benefit in case of loss resulting from specified causes or under specified circumstances. The date on which the insurance under a policy begins. The date on which an individual member of a specified group becomes eligible to apply for insurance under the insurance plan. Those members of a group who have met the eligibility

Double Indemnity E Effective Date

Eligibility Date

Eligible Employees Embezzlement Employers' liability insurance

requirements under a group life or health insurance plan. Fraudulent use or taking of another's property or money which has been entrusted to one's care. Insurance taken out by employers covering employees against injuries arising out of their employment. An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of

Endorsements

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

Endowment

Glossary of useful insurance terms
Insurance covering the construction and erection of objects, and the insurance of machinery in operating Engineering insurance plants. Provision in life insurance policies stating that the life insurance policy and attached application constitute the Entire Contract Clause Estate entire contract between the parties. The assets and liabilities of a person left at death. Any statement of proof of a person's physical condition and/or Evidence of Insurability Excess other factual information affecting his/her acceptance for insurance. The first part of every loss/claim that insured must bear Specific conditions or circumstances listed in the policy Exclusions or Exception for which the policy will not provide benefit payments. Surrender of property away from the premises as a result of a threat to do bodily harm to the named insured, Extortion F Reinsurance of the insurer's risks on an individual basis. The reinsurance company looks at each individual risk and Facultative reinsurance determines whether to accept or decline coverage. 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, Family Policy including those born after the policy is issued. A form of protection which reimburses an employer for losses Fidelity Bond / Guarantee Financial reinsurance Fire caused by dishonest or fraudulent acts of employees. Reinsurance that combines risk transfer with elements of risk finance. A combustion accompanied by a flame or glow, which escapes its normal confines to cause damage. Insurance against fire, lightning or explosion; it can also include insurance against windstorm, earthquake, flood and Fire insurance other natural hazards or political risks. An insurance coverage under which the policyholder collects compensation for losses from the insured's own insurer rather than from the insurer of the person who First Party Coverage Fixed Annuity Fixed Period Option Fortuitous Loss caused the accident. Annuity whose periodic payment is a guaranteed fixed amount. Life insurance settlement option in which the policy proceeds are paid out in fixed amounts. Unforeseen and unexpected loss that occurs as a result of chance. relative, or invitee who is being held captive.

Glossary of useful insurance terms
A reinsurance contract under which the ceding company pays high premiums to build a fund from which to pay expected losses. The premium less the reinsurance charge is paid out to the ceding company in the future as loss Funded cover G payments, returned premiums, or contingent commissions. Coverage that pertains, for the most part, to claims arising out of the insured's liability for injuries or damage caused by ownership of property, manufacturing operations, contracting operations, sale or distribution of products, and the operation of machinery, as well as professional General Liability Insurance services. A specified period after a premium payment is due, in which the policyholder may make such payment, and during Grace Period Gross estate which the protection of the policy continues. All of the assets and liabilities owned at death. the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the Gross Negligence Gross Premium life or property of another. The premium paid by the policyholder. Insurance written on a number of people under a single master policy, issued to their employer or to an association Group Insurance Guaranteed (GMDB) H A generic term applying to all types of insurance indemnifying or reimbursing for losses caused by bodily injury or sickness or for expenses of medical treatment Health insurance I necessitated by sickness or accidental bodily injury. Provision for claims Incurred But Not Reported by the balance sheet date. In other words, it is anticipated that an event will affect a number of policies, although no claims have been made so far, and is therefore likely to result in IBNR (provision) Inheritance tax liability for the insurer. A tax on the right of an heir to receive property at the death of another. A system under which individuals, businesses, and other organizations or entities, in exchange for payment of a sum of money (a premium), are guaranteed compensation for losses resulting from certain perils under specified conditions. Protection by written contract against the financial hazards (in whole or in part) of the happenings of Insurance specified fortuitous events. Minimum Death with which they are affiliated. A feature of variable annuity business. The benefit is a preBenefit determined minimum amount that the beneficiary will receive upon death.

Glossary of useful insurance terms
Insurance providing for payment of a specified amount on the insured's death, either to his or her estate or to a designated beneficiary; or in the case of an endowment Life insurance Insurance Company policy, to the policy holder at a specified date. Any corporation primarily engaged in the business of furnishing insurance protection to the public. In risk securitisation, bonds issued by an insurance or reinsurance company or corporation and purchased by institutional investors. The underlying risk of the bond is a peak risk, and the payment of interest and/or principal depends on the occurrence or severity of an insurance Insurance-linked securities event. A person or organization covered by an insurance policy, including the "named insured" and any other parties for Insured whom protection is provided under the policy terms. The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily Insurer L The termination or discontinuance of an insurance policy Lapse due to non-payment of a premium. Section of cover in a non-proportional reinsurance in the business of furnishing insurance to the public.

programme in which total coverage is divided into a number of consecutive layers starting at the retention or attachment point of the ceding company up to the maximum limit of indemnity. Individual layers may be placed with Layer Level Premium Liability different (re)insurers. A premium which remains unchanged throughout the life of a policy. Any legally enforceable obligation. Insurance for damages that a policyholder is obliged to pay because of bodily injury or property damage caused to another person or entity based on negligence, strict Liability insurance liability or contractual liability. Life insurance, sometimes referred to as life assurance, provides for a payment of a sum of money upon the death of the insured. In addition, life insurance can be used as a Life insurance means of investment or saving. Life Insurance is insurance that provides a financial remuneration on the premature death of the policy holder. By paying an agreed premium over a fixed term, the policy holder is entitled to receive a financial payout in the event Life Insurance that they die prior to the end date of the fixed term.

Glossary of useful insurance terms
A class of business in which claims take a long period of Long-tail business Loss time to occur or be settled. cf. “short-tail” business. The happening of the event for which insurance pays. Value assigned to not having damaged property available, e.g., the cost of renting a replacement vehicle while one's Loss of use M Improper care or treatment by a physician, hospital, or Malpractice other provider of health care. Line of insurance which includes coverage for property in transit (cargo), means of transportation (except aircraft and motor vehicles), offshore installations and valuables, as well as liabilities associated with marine risks and Marine insurance professions. A policy that is issued to an employer or trustee, establishing a group insurance plan for designated members Master Policy of an eligible group. Insurance against damage to a vehicle itself. It includes automobile Material Damage comprehensive, collision, fire and theft. Material damage and physical damage are terms that often are used inter- changeably. The examination given by a qualified physician to determine to the insurability of an applicant. A medical examination may also be used to determine whether an insured claiming Medical Examination Motor insurance N Coverage in a property policy that provides protection against loss from only the perils specifically listed in the policy rather than protection from physical loss. Examples Named Perils of named perils are fire, windstorm, theft, smoke, etc... Failure to use the care that a reasonable and prudent person would have used under the same or similar Negligence circumstances. The portion of the premium rate which is designed to cover benefits of the policy, but not expenses, contingencies, or profit. The term is also used to describe the portion of the premium remitted to the home office by an agent Net Premium Nonconfining Sickness after deduction of the agent's commission. A sickness that disables the insured person but does not confine him to his home or a hospital. A term applied to employee benefit plans under which the employer bears the full cost of the benefits for the employees. One hundred percent of the eligible employees Noncontributory must be insured. disability is actually disabled. Line of insurance which offers coverage for property, accident and liability losses involving motor vehicles. car is being repaired.

Glossary of useful insurance terms
An injury which may require medical care, but does not Nondisabling Injury Non-life insurance result in loss of working time or income. All classes of insurance business with the exception of life insurance. Form of reinsurance in which coverage is not in direct proportion to the original insurer's loss; instead the Non-proportional reinsurance (also excess reinsurer is liable for a specified amount which exceeds of loss reinsurance) the insurer's retention. Property and liability insurance for atomic reactors, power stations or any other plant related to the production of Nuclear energy insurance O atomic energy or its incidental processes. Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that Occupational Hazards can be expected. An accident, including continuous or repeated exposure to substantially the same general, harmful conditions, that results in bodily injury or property damage during the Occurrence Operating revenues P A series of payments to be provided in accordance with the Pension Benefits plan of benefits. A plan established and maintained by an employer, group of employers, union or any combination, primarily to provide for the payment of definitely determinable benefits to Pension Plan Personal Accident Insurance participants after retirement. Personal Accident Insurance covers the policy holder against personal injury as a result of an accident. First-party no-fault coverage in which an insurer pays, within the specified limits, the wage loss, medical, hospital Personal Injury Protection (PIP) and funeral expenses of the insured. The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company. A contract of insurance. The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the Policy Policy Term policy contract or the contract. That period for which an insurance policy provides coverage. period of an insurance policy. Premiums earned plus net investment income plus other revenues.

Glossary of useful insurance terms
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. A person who pays a premium to an insurance company in exchange for the Policyholder insurance protection provided by a policy of insurance. A physical and/or mental condition of an insured which first manifested itself prior to the issuance of his/her policy or which existed prior to issuance and for which treatment was received. A physical condition that existed Preexisting Condition before the effective date of coverage. The sum paid by a policyholder to keep an insurance policy in force. The fee you pay for insurance, usually a recurring Premium Premiums earned Premiums written Product liability insurance expense paid at fixed intervals. Premiums an insurance company has recorded as revenues during a specific accounting period. Premiums for all policies sold during a specific accounting period. Insurance of the liability of the manufacturer or supplier of goods for damage caused by their products. Liability insurance cover which protects professional specialists such as physicians, architects, engineers, lawyers, accountants and others against third party claims arising from activities in their professional field; policies Professional indemnity insurance and conditions vary according to profession. Documentary evidence required by an insurer to prove a valid claim exists. It usually consists of a claim form completed by the insured and the insured's attending physician. For medical expense insurance itemized bills Proof of Loss must also be included. Insurance providing financial protection against the loss of, or damage to, real and personal property caused by such perils as fire, theft, windstorm, hail, explosion, riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and Property Insurance civil commotion, and smoke. Provides financial protection against loss or damage to the insured's property caused by such perils as fire, windstorm, hail, etc. Form of reinsurance in which the premiums and claims of the insurer are shared proportionally by the insurer and Proportional reinsurance reinsurer. A part (clause, sentence, paragraph, etc.) of an insurance contract that describes or explains a feature, benefit, condition, requirement, etc. of the insurance protection Provision Proximate Cause Q afforded by the contract. The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage.

Glossary of useful insurance terms
The period during which the insured must be totally disabled before becoming eligible for residual disability Qualification Period benefits. Form of proportional reinsurance in which a defined percentage of all risks held by the insurer in a specific line Quota-share reinsurance is reinsured. A price estimate given to the potential consumer as he/she decides to which company a formal application will be submitted. Quote R The pricing factor upon which the insurance buyer's Rate premium is based. (1) Restoration of a totally disabled person to a meaningful occupation, (2) a provision in some long- term disability policies that provides for continuation of benefits or other financial assistance while a totally disabled insured is Rehabilitation retraining or attempting to resume productive employment. The payment of the expenses actually incurred as a result of an accident or sickness, but not to exceed any amount Reimbursement Reinstatement specified in the policy. The resumption of coverage under a policy which has lapsed. Insurance for insurance companies which spreads the risk of the direct insurer. Includes various forms such as facultative, financial, non-proportional, proportional, quotaReinsurance share, surplus and treaty reinsurance. Continuance of coverage under a policy beyond its original term by the insurer's acceptance of the premium for a new Renewal policy term. Amount required to be carried as a liability in the financial statements of an insurer or reinsurer to provide for future Reserves commitments under outstanding policies and contracts. A period of partial disability that immediately follows a period of total disability. Benefits for residual disability are paid on a pro-rata basis, depending on the percentage Residual Disability Retention Retrocession Return on equity of earnings loss. Amount of risk which the policyholder or insurer does not insure or reinsure but keeps for its own account. Amount of the risk accepted by the reinsurer which is then passed on to other reinsurance companies. Net income as a percentage of time-weighted shareholders' equity. Company may be legally bound to honour this quote in some jurisdictions and/or lines of business.

Glossary of useful insurance terms
Investment result as a percentage of average invested assets. Invested assets include investments, funds held by ceding companies, net cash equivalents and net reinsurance assets. Average invested assets are calculated as opening Return on investment balance plus one half of the net asset turnover. Measure of profitability in the Life & Health Business Group: the operating result (operating income excluding realised gains and losses) as a percentage of operating revenue (premiums earned and net investment income) plus Return on operating revenues other revenues. Measure of profitability in the Financial Services Business Group: the operating result (operating revenues less the sum of acquisition costs, claims and claim adjustment expenses and operating costs) as a percentage of operating revenues (premiums earned and net investment income plus Return on total revenues trading revenues and fees and commissions). A special policy provision or group of provisions that may be added to a policy to expand or limit the benefits Rider Risk otherwise payable. The chance of loss. Also used to refer to the insured or to property covered by a policy. Management tool for the comprehensive identification and assessment of risks based on knowledge and experience in the fields of natural sciences, technology, economics and Risk management Robbery S statistics. The taking of property from a person by force or threat of violence. The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have Settlement Options policy benefits paid. A class of business in which claims are reported and settled in a relatively short period of time. Cf. “Long-tail” Short-tail business Special Damages business. Compensation awarded for actual economic losses, such as medical expenses and lost wages. A person who, according to a company's underwriting standards, is entitled to purchase insurance protection Standard Risk without extra rating or special restrictions. A form of reinsurance that protects the ceding insurer against an aggregate amount of claims over a period, in excess of either a stated amount or a specified percentage of estimated benefit costs. An example of this type of cover is Employer Stop Loss (ESL) which is used by US companies to cap losses on self-funded group health benefit programmes. The stop-loss can apply to specific Stop-loss reinsurance conditions or aggregate losses.

Glossary of useful insurance terms
Sureties and guarantees issued to third parties for the Surety insurance Surplus reinsurance fulfilment of contractual liabilities. Form of proportional reinsurance in which risks are reinsured above a specified amount. An amount retained by the issuer of a life insurance policy when a policy is cancelled, typically assessed only during Surrender charge T the first five to ten years of a policy. The claimant under a liability policy. So called because the person making the claim is not one of the two parties, insured and insurer, to the insurance contract. Third party claim: a demand made by a person against a policyholder of another company and any payment that will be made by Third Party Time Limit that company. The period of time during which a notice of claim or proof of loss must be filed. A whirling wind over land, accompanied by a funnel-shaped cloud. It is usually very violent and destructive in a narrow Tornado path, often for many miles. An illness or injury which prevents an insured person from continuously performing every duty pertaining to his/her occupation or engaging in any other type of work. (This Total Disability wording varies among insurance companies.) Participation of the reinsurer in certain sections of the insurer’s business as agreed by treaty, as opposed to single Treaty reinsurance U risks. Premiums earned less the sum of claims paid, change in the provision for unpaid claims and claim adjustment expenses and expenses (acquisition costs and other operating costs Underwriting result Uninsurable Risk and expenses). One not acceptable for insurance due to excessive risk. The length of time an employee must wait from his/her date of employment or application for coverage, to the Waiting Period date his/her insurance is effective. An agreement attached to a policy which exempts from coverage certain disabilities or injuries that otherwise Waiver Will would be covered by the policy. The legal statement of a person's wishes concerning the disposal of his or her property after death.