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 Insurance
Definitions
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- Absolute Liability: Liability for damages
even though fault or negligence cannot be proven.
- Accident: An event or occurrence which is
unforeseen and unintended.
- Accident and Health Insurance: A type of
coverage that pays benefits, sometimes including
reimbursement for loss of income, in case of sickness,
accidental death, or accidental injury.
- Accident Insurance: A form of health
insurance against loss by accidental bodily injury.
- Accidental Bodily Injury: Injury to the body
as the result of an accident.
- Accidental Death Benefit: A benefit in
addition to the face amount of a life insurance policy,
payable if the insured dies as the result of an
accident. Sometimes referred to as "double indemnity."
- Accumulation period: 1) The time between the
first premium payment and the first benefit pay out
under a deferred annuity; 2) A specified period of time,
such as 90 days, during which the insured person must
incur eligible medical expenses at least equal to the
deductible amount in order to establish a benefit period
under a major medical expense or comprehensive medical
expense policy.
- Accumulation units: The mechanism used to
account for your "deposits" in a variable annuity
contract during the premium paying period. The number of
units purchased depends upon the current valuation of a
unit in dollars.
- Acquisition Costs: The cost to a company of
securing new business, including the commissions to
agents and brokers.
- Activities of Daily Living: The activities of
daily living which are used to determine degree of
impairment and if eligible for some type of insurance
benefits, activities normally including mobility,
bathing, toiletry, dressing, transferring, and eating.
- Actual Cash Value (ACV): The cost of
replacing or restoring property damaged at today's
prices, less depreciation.
- Actuary: A person trained in mathematics
whose job is to apply the theory of probability to the
business of insurance to develop insurance rates. This
is done largely from past loss experience, through
future probable trends are also taken into account.
- Additional insured: an assured party
specifically named under an insurance policy
- Adhesion, Contract of: A contract that is
drafted by one party and accepted or rejected by the
other, with no opportunity to bargain with respect to
its terms.
- Adjuster: A person who investigates and
settles losses for an insurance company.
- Adjusting: The process of investigating and
settling losses with or by an insurance company.
- Adverse Selection: The tendency of less
favorable insurance user to seek or continue insurance
to a greater extent than others.
- Age Limits: Stipulated minimum and maximum
ages below and above which the company will not accept
applications or may not renew policies.
- Agent: An insurance company representative
licensed by the state who solicits, and produces
contracts of insurance for an insurance company.
- Alien Insurer: An insurance company domiciled
in another country.
- All-risks Policy: Coverage by an insurance
policy that promises to cover all losses except those
losses specifically excluded in the policy.
- Amendment: 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.
- Amortization: Paying an interest-bearing
liability by gradual reduction through a series of
installments, as opposed to one lump-sum payment.
- Annuitant: The person during whose life an
annuity is payable, usually the person to receive the
annuity.
- Annuity: A contract that provides an income
for a specified period of time, such as a number of
years or for life.
- Annuity Certain: A contract that provides an
income for a specified number of years, regardless of
life or death.
- Application: A signed statement of facts made
by a person applying for life insurance and then used by
the insurance company to decide whether or not to issue
a policy.
- Arbitration: A form of alternative dispute
resolution where an unbiased person or panel renders an
opinion as to responsibility for or extent of a loss.
- Arson: The willful and malicious burning of,
or attempt to burn, any structure or other property,
often with criminal or fraudulent intent.
- Assets: All funds, property, goods,
securities, rights of action, or resources of any kind
owned by an insurance company. Statutory accounting,
however, excludes non-admitted assets, such as deferred
or overdue premiums, that would be considered assets
under generally accepted accounting principles .
- Assignment: The legal transfer of one
person's interest in an insurance policy to another
person.
- Attractive Nuisance: Condition that can
attract and injure children. Occupants of land on which
such a condition exists are liable for injuries to
children.
- Automatic Premium Loan: Cash borrowed from a
life insurance policy's cash value to pay an overdue
premium after the grace period for paying the premium
has expired.
- Automobile Insurance Plan: One of several
types of "shared market" mechanisms where persons who
are unable to obtain such insurance in the voluntary
market are assigned to a particular company, usually at
a higher rate than the voluntary market. Formerly this
plan was called "Assigned Risk."
- Automobile Liability Insurance: Protection
for the insured against financial loss because of legal
liability for car-related injuries to others or damage
to their property.
- Automobile Physical Damage Insurance:
Coverage to pay for damage to or loss of an insured
automobile resulting from collision, fire, theft, or
other perils.
- Aviation Insurance: Aircraft insurance
including coverage of aircraft or their contents, the
owner's liability, and accident insurance on the
passengers.
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