List of common insurance terms and vocabularyA Accidental death and dismemberment Insurance (AD&D): A form of insurance covering death or specific types of injury as a result of an accident Assignment The transfer of rights held by one party—the assignor—to another party—the assignee Attained age Age at which a person is eligible to receive certain benefits.
Automatic Premium Loan If at the end of the Grace Period the premium due has not been paid, a policy loan will automatically be made from the policy's cash value to pay the premium. The primary purpose is to prevent unintentional lapse of the policy. Funds in the cash value must be at least equal to the loan amount. B Beneficiary The recipient of funds, property, or other benefits, as from an insurance policy or will. Broker One that acts as an agent for others, as in negotiating contracts, purchases, or sales in return for a fee or commission. C Coinsurance (Percentage participation) Co-insurance, also know as "percentage participation" is the portion of the medical bills that you are responsible for after you have met your deductible. Concealment If an insured withholds information on a material fact, about which the insurance company has no knowledge, the insurance comapany as grounds to void the contract. Conditional Receipt Evidence of a temporary contract obliging a life or health insurance company to provide coverage as long as a premium accompanies an acceptable application. This gives the company time to process the application and to issue or refuse a policy, as the case may be. If the applicant were to die before a policy is issued, the company will pay the death benefit as if the policy would have been issued. Consideration Consideration is something of value. A contract is an agreement between two parties. Both parties must be providing something of value to the other party.
D Deductible The amount of money you have to pay out of pocket not covered by any insurance Disability The condition of being disabled; incapacity. Double Indemnity a clause or provision in a life insurance or accident policy whereby the company agrees to pay twice the face of the contract in cases of accidental death. E Elimination Period Incidents which occur during this time are not claimable. Exclusions Provision in an insurance policy that indicates what is denied coverage. For example, common exclusions are: hazards deemed so catastrophic in nature that they are uninsurable, such as war. F
G Grace Period A period in which an insurance policy is effective even though the premium is past due. Guaranteed Renewable Insurance policy that requires the insurer to renew the policy for a period specified in the contract provided premiums are paid in a timely fashion. The insurer cannot make any changes in the provisions of the policy other than a change in the premium rate for all insureds in the same class. H
I Incontestable Clause Section in a life insurance policy stating that after the policy is in force two years, the company cannot void it because of misrepresentation or concealment by the insured in obtaining the policy.
Indemnity Compensation for damage, loss, or injury suffered. L Lapse To be no longer valid or active; expire: Life insurance This classification provides coverage of establishments primarily engaged in underwriting life insurance. These establishments are operated by enterprises that may be owned by stockholders, policyholders, or other carriers. M Maturity The time at which a note or bond is due Misrepresentation Untrue statement, whether unintentional or deliberate. It may be a form of nondisclosure where there is a duty to disclose, or the planned creation of a false appearance. N Noncancellable policy insurance contract that cannot be cancelled by the Insurance Company
O
P Preexisting condition Illnesses or disability for which the insured was treated or advised within a stipulated time period before making application for a life or health insurance policy. Premium The amount paid or payable, often in installments, for an insurance policy.
Proceeds Proceeds refers to whatever is received when an item is sold or to that which results or accrues from some possession or transaction. Proceeds are classified into cash and noncash categories. R
Reinstatement Placement of a customer record in active status after having been suspended, canceled, expired, or otherwise inactivated. Rider Written form attached to an insurance policy that alters the policy's coverage, terms, or conditions. S Settlement Options Options available to beneficiaries when a person insured by a life insurance policy dies. The Death Benefit may be paid in one lump sum, in several installments over a fixed period of time, or in the form of an Annuity for the rest of the beneficiary's life, among other options. T Term insurance Insurance providing coverage for losses to the insured during a stated period but becoming void upon its expiration. U Underwriting The process of issuing insurance policies. W Waiting period The time between the filing of an insurance claim and the payments made on the claim. Also known as the "elimination period". Waiver Intentional relinquishment of a right, claim, or privilege. Waiver of Premium A clause in an insurance policy that waives the policyholder's obligation to pay any further premiums should he or she become seriously ill or disabled. A waiver of premium allows people to benefit from an insurance policy, even when they cannot work. |