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

-A-

Accelerated death benefits - a life insurance policy under which policy proceeds are paid prior to death if the insured is terminally ill

Accident - an unexpected, unforeseen event not under the control of an insured and resulting in a loss

Accident frequency - the number of times an accident occurs. Used in predicting losses upon which premiums are based

Accidental death - coverage in the event of death due to an accident, usually in combination with dismemberment insurance

Act of God - natural occurrence beyond human control or influence. Such acts of nature include hurricanes, earthquakes, and floods. (A snow storm is an act of God. Driving in a snow storm is an act of man or woman or teenager.)

Actuary - a professional trained in the mathematics of insurance and risk management

Add-ons - additional coverage to your basic policy
 
Adjuster - a person employed by a property/casualty insurer to evaluate losses and settle claims

Agents - two types of agents sell insurance. Independent agents are self employed business people who typically represent two insurance companies and are paid on a commission basis. Exclusive agents represent only one insurance company and may be salaried employees or work on a commission basis.

Alien insurance company - an insurance company incorporated under the laws of a foreign country
 
Annuity - a life insurance company contract that pays a periodic income benefit for a specific period or lifetime
 
Application - a signed statement by a prospective insured person which becomes part of the health insurance contract

Auto insurance premium discounts - a discount offered to drivers for such safeguards as air bags, seat belts, good driving record, anti-theft devices, multiple vehicles, etc

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-B-

Bail bond - money guarantee that an individual released from jail will be present in court at an appointed time. If the individual is not present in court at the appointed time (jumping bail), the monetary value of the bond is forfeited to the court. Personal auto policies commonly cover fees for an insured's bail bond.

Beneficiary - designation by the owner of a life insurance policy indicating to whom the proceeds are to be paid upon the insured's death or when an endowment matures

Binder - temporary insurance contract providing coverage until a permanent policy is issued

Blanket policy - a health insurance contract which protects all members of a certain group against a specific hazard
 
Broker - a sales and service representative who handles insurance for clients, generally selling insurance of various kinds and for several companies

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-C-

Cancellable policy - a policy which may be terminated by the company or the insured by proper notification sent to the other party according to the terms set forth in the policy
 
Carrier - an insurer or insurance company

Cash surrender value - money the policyholder is entitled to receive from the insurance company upon surrendering a life insurance policy with cash value

Chartered Life Underwriter (CLU) - a professional designation conferred by the American College. Recipients must pass examinations in business courses, including insurance, investments and taxation and must have professional experience in life insurance planning.

Claim - (1) A formal request for payment of a loss under an insurance contract or bond. (2) The actual amount of the final settlement

Claimant - one who seeks reimbursement for loss under the terms and conditions of his/her insurance contract

Clause - a section or paragraph in an insurance policy that explains, defines or clarifies the conditions of coverage

COBRA (Consolidated Omnibus Budget Reconciliation Act) - a federal law under which group health plans sponsored by employers with 20 or more employees must offer continuation of coverage to employees who leave their jobs, voluntarily or otherwise, and their dependents; gives individuals and their dependent family members the right to continue their health care coverage for as long as 18 months.

Coinsurance - in property insurance, a coinsurance clause requires the policyholder to carry insurance equal to a specified percentage of the value of the property in order to receive full payment of a loss. In health insurance, coinsurance is a percentage of each claim, above the deductible, that is paid by the policyholder.

Collision insurance - insurance coverage which pays (maximum book value) for damage to the policyholder's car caused by collision

Comprehensive insurance - coverage in automobile insurance providing protection in the event of physical damage (other than collision) or theft of the insured car

Comprehensive major medical insurance - a policy designed to give the protection offered by both a basic and major medical health insurance policy. It is characterized by a low "deductible" amount, coinsurance feature, and high maximum benefits - usually $5,000 to $10,000 or higher.

Conversion privilege - a right granted to group certificate holders, by which they may obtain an individual policy (upon leaving the group) regardless of physical condition

Co-payment - the portion, either a percentage or a fixed dollar amount, of a medical bill that a patient pays. The insurer pays the rest

Coverage - a term usually referring to the type and extent of benefits provided by an insurance contract

Credit insurance - coverage that pays off an outstanding loan in the event of the policyholder's death and/or makes loan payments if the policyholder is disabled

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-D-

Death benefits - amount payable, as stated in a life insurance policy, upon the death of the insured

Declaration page - that page of the insurance policy which lists the insurance company, its address, name of the policyholder, starting and ending dates of coverage, and the actual coverages given in the contract, including the locations and amounts.

Deductible - the amount of loss paid by the policyholder before the insurance policy benefits become payable

Defense clause - a provision in a casualty insurance policy that provides additional coverage for expenses of judicial assistance

Dental Insurance - coverage for dental services under a group or individual policy

Depreciation - a decrease in the original value of an item because of wear and tear, obsolescence, and deterioration

Disability insurance - a type of health insurance that pays a monthly income to the policyholder when he or she is unable to work because of illness or accident

Domestic insurance company - an insurer domiciled in this state

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-E-

Earned premium - that part of the premium applicable to the expired part of the policy period, including the short-rate charge on cancellation

Effective date  -the date on which an insurance policy coverage starts

Employee Retirement Income Security Act of 1974 (ERISA) - federal law that established rules and regulations to govern private pension plans. Most self-insured health plans are created under this act.

Evidence of insurability - any statement or proof of a person's physical condition, occupation, etc., affecting his acceptance for insurance

Exclusions - specified hazards for which a policy will not provide benefit payments. They are often called exceptions.

Experience - the record of claims made or paid within a specified time period

Experience rating - determination of the premium rate for an individual risk, made partially or wholly on the basis of that risk's own past claim experience

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-F-

Fee for service - the traditional model for health insurance, in which patients go to the doctor or hospital of their choice and the insurer pays the largest portion of the bill

Fire insurance - coverage protecting property against losses caused by fire or lightning 

Flat cancellation - cancellation of an insurance policy as of the date of its start with no premium charge 

Foreign insurance company - an insurer domiciled in another state 

-G-

Guaranteed renewable policy - a policy which the insured has the right to continue in force by the timely payment of premiums to a specified age, (usually age 50) during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force but may make changes in premium rates for the entire policyholder classification.

Guarantee funds - all 50 states, the District of Columbia and Puerto Rico require licensed insurers to assume some of an insolvent insurance company's policyholder liabilities. These funds (life & health and property & casualty) are the mechanism by which solvent insurers bail out the policyholders of companies that fail.

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-H-

Health insurance - protection against the costs of hospital and medical care or lost income arising from an illness or injury. Sometimes called Accident of Sickness Insurance, Accident and Health Insurance, or Disability Insurance. 

Health maintenance organization (HMO) - an organization that provides health care for a monthly payment set in advance. In a traditional HMO, doctors and other providers are salaried employees and the facilities are owned by the organization. In recent years, however, other forms of HMOs have sprung up that contract with doctors and hospitals to care for members at set, negotiated fees. Many HMOs are hybrids, offering both kinds of care to members. 

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-I-

Insurance - a system to protect persons against the risks of financial loss by transferring the risks to a large group who share the financial losses 

Insurer - the company offering protection through the sale of an insurance policy to an insured 

Insured - the person whose risk is transferred and shared 

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-J-

Joint and Survivor Annuity - An annuity with two annuitants, usually spouses. Payments continue until the death of the longest living of the two.

Joint Underwriting Association / JUA - Insurers which join together to provide coverage for a particular type of risk or size of exposure, when there are difficulties in obtaining coverage in the regular market, and which share in the profits and losses associated with the program. JUAs may be set up to provide auto and homeowners insurance and various commercial coverages, such as medical malpractice.

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-K-

Key Person Insurance - Insurance on the life or health of a key individual whose services are essential to the continuing success of a business and whose death or disability could cause the firm a substantial financial loss.

Kidnap / Ransom Insurance - Coverage up to specific limits for the cost of ransom or extortion payments and related expenses. Often bought by international corporations to cover employees. Most policies have large deductibles and may exclude certain geographic areas. Some policies require that the policyholder not reveal the coverage’s existence.

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-L-

Liability insurance - insurance for money the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person and covered in the policy 

Life insurance  - protection against the death of the insured in the form of payment to a designated beneficiary, typically a family member or business 

Long Term Care Insurance - covers the cost of long-term custodial care in a nursing facility or at home 

Loss of use insurance - insurance against loss due to the insured's inability to use property, such as a vehicle or a store; includes additional living expense, business interruption, rent insurance, rental reimbursement, and rental value 

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-M-

Managed care -a health plan that places limits on which treatments and which doctors, hospitals and other providers a member can use and still receive full coverage. Generally under managed care an insurer negotiates lower fees with doctors, hospitals, laboratories, for instance, who join in a network that members of the plan are encouraged to use. Frequently, members of a managed care plan can use health care providers outside the network, but they must pay a greater share of the cost. 

Malpractice insurance - a professional liability coverage that insures physicians, lawyers and other specialists against suits alleging their negligence 

Marine insurance - coverage for goods in transit, and for the vehicles that transport them, over waterways, over land and in air 

Medicaid - a federal-state program that helps pay for health care for the needy, blind and disabled and for low-income families with children 

Medicare - a federal health care insurance program for people age 65 and over, and for the disabled 

Medigap - because Medicare does not cover all expenses, private insurers sell "Medigap" policies to supplement federal insurance benefits 

Mortgage insurance - life insurance that pays the balance of a mortgage if the mortgagor (insured) dies 

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-N-

No Fault - a system in which each driver's auto insurance coverage pays for injuries and damage, no matter who caused the accident 

Non-cancellable or Non-cancellable and guaranteed renewable policy - a policy which the insured has the right to continue in force by the timely payment of premiums set forth in the policy to a specified age, (usually age 50) during which period the insurer has no right to make unilaterally any change in any provision of the policy while the policy is in force. 

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-O-

Ordinary life insurance - life insurance usually issued in amounts of $1000 or more to an individual policyholder 

Occurrence - An event that results in an insured loss. In some lines of insurance, such as Liability, it is distinguished from accident in that the loss does not have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected nor intended by the insured.

 

Overinsured - A term used to describe the condition that exists when an insured has purchased coverage for more than the actual cash value or replacement cost of a subject of insurance. It is also used to describe a situation where so much insurance is in force as to constitute a moral or morale hazard, such as having so much Disability Income Insurance in force that it becomes profitable to be disabled

Overlapping Insurance - Coverage from two or more policies or insurers which duplicates coverage of certain risks. See also Concurrent Insurance

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-P-

Paid-up insurance - life insurance policy under which all premiums have already been paid, with no further premiums due 

Personal injury protection (PIP) - coverage present in no-fault states which pays medical, loss of income, death and/or disability, and loss of services incurred as a result of an automobile accident 

Physical damage insurance - property damage coverage for a vehicle under the "collision insurance" and "comprehensive insurance" sections of the policy 

Pre-existing conditions - a physical condition of an insured person which existed prior to the issuance of the policy 

Premium - the payment for an insurance policy, usually paid periodically, i.e., annually, semi-annually, quarterly or monthly 

Property damage liability insurance - coverage in the event that the negligent acts or omissions of an insured result in damage or destruction to another's property 

Pro-rata - cancellation of an insurance contract by the insurance company, allowing the policyholder a share of the premium relating to the remainder of the time under the contract that bears to the total contract premium 

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-Q-

Quasi-Insurance Institutions - A term sometimes applied to government institutions created to carry out social insurance arrangements that have some, but not all, the characteristics of insurers. An example is the United States Department of Health, Education, and Welfare.

Quid Pro Quo - the consideration in an insurance contract which calls for the exchange of values by both parties to the contract in order for it to be a valid contract

-R-

Rebate - a reduction of a premium 

Red book / Blue book - a publication used for the determination of values for used automobiles and trucks 

Reinsurance - a form of insurance that insurance companies buy for their own protection 

Rider - an endorsement to an insurance policy that modifies clauses and provisions of the policy, adding or excluding coverage 

Risk - a term used to designate an insured or a peril insured against 

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-S-

Short rate - cancellation of an insurance contract at the request of the policyholder with a refund of premiums to the policyholder of less than would be given under pro-rata consideration 

Specified disease insurance - a policy which provides stated benefits, usually of large amounts, toward the expense of the treatment of the disease or diseases named in the policy 

Solvency - one of MIA's primary responsibilities is to make sure insurance companies remain solvent, i.e., have sufficient assets and income, in order to have the ability to pay the claims of their policyholders 

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-T-

Term Insurance - life insurance issued for a stated temporary period of time 

Title Insurance - indemnifies the owner of real estate in the event clear ownership of property is challenged by discovery of faults in the title 

Twisting - an unfair trade practice, in insurance, whereby an agent or broker attempts to persuade a life insurance policyholder through misrepresentation to cancel an existing policy and buy a new one 

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-U-

Umbrella liability insurance - a liability policy that covers in excess of primary limits of the basic liability policy 

Underwriting - process of examining, accepting, or rejecting insurance risks, and classifying those selected, in order to charge the proper premium for each 

Uninsured motorist coverage - endorsement to a personal automobile policy that covers an insured involved in a collision with a driver who does not have liability insurance 

Universal life insurance - a flexible premium policy that combines protection against premature death with a savings account that typically earns a money market rate of interest

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-V-

Valued Policy - A policy under which the insurer pays a specified amount of money to or on behalf of the insured upon the occurrence of a defined loss. The money amount is not related to the extent of the loss. Life insurance policies are an example.

Variable Annuity - An annuity whose contract value or income payments vary according to the performance of the stocks, bonds and other investments selected by the contract owner.

Variable Life Insurance - A policy that combines protection against premature death with a savings account that can be invested in stocks, bonds, and money market mutual funds at the policyholder’s discretion.

Viatical Settlement Companies - Insurance firms that buy life insurance policies at a steep discount from policyholders who are often terminally ill and need the payment for medications or treatments. The companies provide early payouts to the policyholder, assume the premium payments, and collect the face value of the policy upon the policyholder’s death.

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-W-

Whole life insurance - life insurance payable to a beneficiary at the time of death of the insured whenever that occurs 

Workers compensation insurance - pays for medical care and physical rehabilitation of injured workers and replaces their lost wages while they're unable to work 

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-X-

-Y-

Yearly Renewable Term Insurance: Renewable term insurance under which the successive terms are for one year. The right of renewal may extend to ten years or more or to an age such as 60 or 65.

-Z-

Zone System - A system developed by the NAIC for the triennial examination of insurers. Under the system, teams of examiners are formed from the staffs of several states in each of the geographical zones. The results of their examinations are then accepted by all states in which an insurer is licensed, without the necessity of each state having to conduct its own examinations.

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