Term
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Definition
| A written contract that outlines the obligations and responsibilities of the insured and the insurer. |
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Term
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Definition
| Money that is paid to an agent for selling an insurance company's policies. |
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Term
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Definition
| A form of insurance that pays off upon death of the person insured. |
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Term
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Definition
| Also know as the secondary beneficiary, receives the policy proceeds if the primary is deceased. |
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Term
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Definition
| A reduction in quality, quantity, or value of something. |
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Term
| Eligibility/Enrollment Period |
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Definition
| Used in life and health group benefits. Period of time an employee can enroll for benefits without proof of insurability |
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Term
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Definition
| The classification the insured is assigned and or the dollar amount paid for a policy. |
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Term
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Definition
| Happens when the premium for the policy is not paid and grace period has expired. |
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Term
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Definition
| The person is covered by an insurance policy (object of the policy) |
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Term
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Definition
| To restore one to the previous financial condition that existed prior to the loss. |
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Term
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Definition
| Amount of money paid by the insured (policyowner) to the insurer. |
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Term
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Definition
| Policy that provides protection for all family members. Term insurance for children and spouse. If a child converts to a permanent plan of life insurance, evidence of insurability is not required. |
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Term
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Definition
| Money or something of economic value (premium) |
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Term
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Definition
| The greater the number of exposures, the more accurate the prediction. |
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Term
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Definition
| Failure to communicate information which a party to a contract knows and should communicate. |
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Term
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Definition
| Arise due to a person's indifference to carelessness. |
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Term
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Definition
| Results from individuals' values and character traits |
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Term
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Definition
| Health Insurance that provides funds for people who need home health care, extended health care or nursing home care. |
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Term
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Definition
| Life or health insurance provided for large numbers of people who have something in common, such as the same employer. |
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Term
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Definition
| Policy that can be terminated. |
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Term
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Definition
| An individual insurance policy for children |
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Term
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Definition
| An agreement that outlines the rights and responsibilities of the insurer and insured. |
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Term
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Definition
| An insurance contract has 4 requirements: mutual assent, consideration, competent parties, and legal purpose. |
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Term
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Definition
| Anything that increases the chance of loss. |
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Term
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Definition
| A licensed fire and casualty licensee who represents the client for a fee. |
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Term
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Definition
| A term that is used when income is earned on an invesment but taxes are postponed until benefit payments (qualified plan) |
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Term
| Last Survivor Policy (second-to-die) |
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Definition
| Mostly used by husband and wife for estate planning. Written for million dollars or more. It will pay on the death of the second to die. |
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Term
| Foreign Insurance Company |
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Definition
| An insurance company that is incorporated outside the state where it is conducting business. |
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Term
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Definition
| Applicant, who is uninsurable or presents a higher than average risk, attempts to obtain a policy from an insurer at standard rates. |
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Term
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Definition
| A contract that liquidates an estate and accumulates a sum money as income (retirement plan) |
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Term
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Definition
| Statements that are made to the best of ones knowledge. An implied warranty, and a promise as to the future. |
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Term
| Commissioner of Insurance |
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Definition
| An elected official who oversees all of the responsibility of the Department of Insurance. |
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Term
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Definition
| A legal term that means "stop doing whatever you are doing" |
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Term
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Definition
| When a company or agent tried to prevent a client from replacing an existing life or annuity contract with a different company |
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Term
| Contingent (Secondary) Beneficiary |
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Definition
| Receives the policy proceeds if the primary beneficiary is deceased, also called contingent beneficiary. |
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Term
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Definition
| A person whom the insurer will pay the death proceeds upon the death of the insured. |
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Term
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Definition
| People who assess risk and determine classification of the insured. |
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Term
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Definition
| Person who receives an income benefit from an annuity |
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Term
| Consolidated Omnibus Budget Reconciliation Act (COBRA) |
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Definition
| Federal law that applies to employers offering group insurance who have 20 or more employees. Electio of employee to continue health insurance benefits under certain events: job, loss or death of spouse. |
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Term
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Definition
| Appointed by an insurance company to sell its products and represents the insurer. |
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Term
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Definition
| The table that shows the average number of sickness or accidents at various ages. |
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Term
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Definition
| Life Insurance protection for a designated number of years. |
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Term
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Definition
| A life policy covering two or more lives. It may be written as a first to die or second to die policy. |
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Term
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Definition
| Majoy medical policy feature in which the insurer and the insured share in the cost of medical expenses. |
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Term
| Worker's Compensation Insurance |
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Definition
| Insurance purchased by employers on their employees in case of work related injuries. Employers are responsible regardless of fault. |
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Term
| Uniform Simultaneous Death Act |
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Definition
| There is no evidence as to which party died first. |
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Term
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Definition
| Policyowners has the right to return the policy for any reason during a specific number of days and receive a full refund or premium. (10 days; or 30 days for senior citizens (60 or older)) |
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Term
| Accidental Death & Dismemberment |
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Definition
| Pays a death benefit (principal sum) or benefit for losing a limb (capital sum) in the event of an accident. |
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Term
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Definition
| Period of time when the annuity contract is being funded (grows tax deferred) |
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Term
| Medical Inforamation Bureau (MIB) |
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Definition
| A non-profit organization funded by member life and health insurance companies. Prevents fraud or overinsurance. |
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Term
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Definition
| Mode of distributing the proceeds from the policy in other than a lump sum (fixed period, fixed amount, interest only, life income option) |
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Term
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Definition
| One that falls within the company's guidelines without requiring additional charges or special restrictions. |
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Term
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Definition
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Term
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Definition
| Financial interest in having the life of the insured continued |
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Term
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Definition
| A company that is owned by its policy owners |
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Term
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Definition
| An insurance company incorporated outside the country |
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Term
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Definition
| Policies purchased to cover a specific disease, such as cancer or heart disease. |
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Term
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Definition
| Covers decreased business earnings due to a death or disability of a key employee. (Ex. Senior sales manager, etc.) |
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Term
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Definition
The grace period for all life policies is 1 month.
For Disability Insurance: Time period following the premium due date
Weekly premium 7 days
Monthly premium 10 days
Other policies 31 days |
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Term
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Definition
| When applying for life or health insurance, insureds must meet certain criteria established by the insurance company. |
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Term
| Conversion (Demutualization) |
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Definition
| When a mutual insurance company changes to a stock insurance company |
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Term
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Definition
| A greater than average risk for the insurer |
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Term
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Definition
| Allows the cash values to accumulates without tax penalties and postpones taxation to a later date. |
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Term
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Definition
| Used when Insured & Primary Beneficiary die in the same accident |
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Term
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Definition
| A health condition or sickness that occurred prior to the issuing of a health policy |
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Term
| Multiple Employer Trust (MET) |
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Definition
| Legal entities in which two or more financially unrelated companies join together to provide group insurance. |
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Term
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Definition
| Party covered by an insurance policy |
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Term
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Definition
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Term
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Definition
| Effort to keep life insurance policies from lapsing |
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Term
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Definition
| Transfers risk of loss from the insured to the company |
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Term
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Definition
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Term
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Definition
| Used in Social Security where the worker has paid in for 40 quarters or 10 years |
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Term
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Definition
| An unforeseen event: result being property damage, loss, bodily injury or death |
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Term
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Definition
| An agent becomes "appointed" or approved to sell insurance for a specific insurance companies. |
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Term
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Definition
| Coverage in which the face amount of the life insurance policy declines by a stipulated amount over a period of time |
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Term
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Definition
| A life or health insurance plan that an employer provides for employees in which 100% of the employees are covered |
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Term
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Definition
| Used in group insurance. Employers require that the employees help pay for their benefit plans by paying part of the premium |
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Term
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Definition
| Cover a group of individuals who are exposed to the same risks. Individuals within the group are changing constantly |
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Term
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Definition
| Recalling a policy due to misrepresentation or fraud |
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Term
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Definition
| Table that shows the average number of deaths (used to establish life insurance rates) |
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Term
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Definition
| Anything of value exchanged for a promise or for performance that is needed to make an instrument binding on the contracting parties. (Premium) |
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Term
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Definition
| Employee Stock Ownership Plan A defined contribution plan in which an employee obtains shares of stock in the company |
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Term
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Definition
| Certain conditions must be met to make the contract enforceable |
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Term
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Definition
| Person in a position of financial trust |
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Term
| Cash Surrender Value (CSV) |
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Definition
| The money in a permanent policy that the policyowner is entitled if he/she no longer wants the policy |
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Term
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Definition
| "through the roots" or "Through the roots" maintains the order of beneficiaries |
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Term
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Definition
| Recongnized by the Department of Insurance to transact insurance: approved or authorized. |
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Term
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Definition
| Outcome depends upon an uncertain future event. A contract in which there will be an unequal exchange of money. |
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Term
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Definition
| Generally, the first two years in life insurance. During this period if the insurer finds any reason to dispute the information on the application, the insurer can recind the policy or deny the claim. |
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Term
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Definition
| The insured no longer wants the insurance coverage, the company returns the unearned premium minu administration fees. |
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Term
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Definition
| Paid on participating policies. Return ton the policyowners of excess premiums charged for the insurance coverage and are not guaranteed. |
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Term
| Modified Endowment Contract (MEC) |
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Definition
| This concept applies to permanent life insurance. Prevents a life insurance policy from becoming and investing vehicle. |
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Term
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Definition
| A life policy cannot be voided by the insurer after a period stated in the policy (2 years) |
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Term
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Definition
| Allows for the waiver of premium payments in the total disability of the insured. |
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Term
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Definition
| Used in HMO's Doctors receive payments regardless of services based on members in an area. |
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Term
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Definition
| A period of time after an insured suffers a covered disability until benefits become payable (waiting period) |
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Term
| Health Maintenance Organization (HMO) |
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Definition
| Managed care health insurance with an emphasis on preventative care |
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Term
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Definition
| Insurance paid to terminally ill persons. Typically in lump sum. Absolute assignment is required. |
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Term
| Double indemnity or Accidental Death Rider |
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Definition
| Pays double the death benefit if insured dies asa a result of an accident |
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Term
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Definition
| A measure of financial stability where assets exceed liabilities. |
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Term
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Definition
| Total disability as the insured's inability to perform the duties of any occupation for which the insured is reasonably qualified by education, training, or experience. |
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Term
| Accelerated Death Benefit |
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Definition
| Terminally ill persons can access part of the policy proceeds prior to death |
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Term
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Definition
| "Per Head" Each surviving child will receive an equal share of the proceeds |
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Term
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Definition
| Premium on the policy remains the same throughout the length of the policy |
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Term
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Definition
| The amount of money the insured paid to the insurer that has not been used to provide coverage for the person |
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Term
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Definition
| Employers only can buy workers compensation insurance through a state run fund |
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Term
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Definition
| Any ambiguous language in the contract, the court would side with policyowner |
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Term
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Definition
| Allows for a portion of the premium to be returned if the policy owner is permanently disabled |
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Term
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Definition
| Authorization to do something even though it is not in writing |
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Term
| Nonparticipating Life Insurance |
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Definition
| A life insurance policy that does not pay dividends to policyowners |
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Term
| Usual, customay & reasonable |
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Definition
| In health insurance, pays a dollar amount based on the geographical location |
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Term
| Medicare Supplement Insurance |
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Definition
| Fills in gaps left out of Medicare part A and B. Must include the core benefits (medi-gap) |
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Term
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Definition
| A sum of month that the insured pays on a health claim after the insurer has paid for the basic benefits but before the major medical portion of the policy pays any part of the claim |
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Term
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Definition
| Contract that will start making payments at some future date (grows tax deferred) |
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Term
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Definition
| The appearance of or an assumption of authority based on words or actions on the part of the agent |
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Term
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Definition
| It is used for group insurance. Employer owns the master policy, which outlines the coverage by the insurer. Employees receives a certificate of insurance. |
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Term
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Definition
| This person cannot be removed as beneficiary unless this person gives his/her written consent |
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Term
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Definition
| Term insurance where the insured has the option of continuing the coverage for a period of time but with an increase in premiums based on age. |
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Term
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Definition
| (Social Security) Provides a minimum floor of retirement |
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Term
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Definition
| When purchasing a property that is financed, an insurer cannot force the purchaser to buy insurance from a particular agent or broker |
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Term
| Participating Life Insurance |
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Definition
| A life insurance policy that allows policy holders to "participate" or share in the profits of the insurance company (mutual insurer) |
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Term
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Definition
| In life insurance, an application on an insured that does not require the insured to take a physical. |
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Term
| Errors & Omissions Insurance |
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Definition
| Liability insurance which provides coverage for an act, error, or omission the agent or company makes |
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Term
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Definition
| Provides an increase in the amount of insurance coverage without the insured providing insurability. Tied to the consumer price index. |
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Term
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Definition
| Provides health insurance benefits to eligible people over 65 and some disabled people prior to age 65 |
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Term
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Definition
Bankrupt
Assets do not equal paid-in-capital |
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Term
| Employee Retirement Income Security Act (ERISA) |
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Definition
| Federal law that outlines plan description and benefits for pensions plan. Requires annual reporting and provides equality. |
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Term
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Definition
| A company not licensed to do business in a particular state |
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Term
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Definition
| The length of time that the insured will receive the money from the insurance company based on the writted contract in a disability income contract. |
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Term
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Definition
| In life insurance, the cash value of the policy equals the face amount |
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Term
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Definition
| Determines the order of death when the insured and beneficiary die in the same accident |
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Term
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Definition
| An agreement that the deceased partner's interest will be sold to the surviving partners at the stated price. |
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Term
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Definition
| A stated dollar amount that the insured must pay before policy benefits are paid |
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Term
| Participating Life Insurance |
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Definition
| A life insurance policy that does pay dividends to its owner |
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Term
| Guaranteed Renewable Insurance Contract |
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Definition
| Insured guaranteed to renew the policy at each renewal date. Insurer cannot change the terms but may change the premiums for an entire class. |
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Term
| Health Insurance Counseling & Advocacy Program (HICAP) |
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Definition
| A service provided by volunteers that advises the elderly about insurance needs for no fee |
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Term
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Definition
| The laws of the state, written by legislature, that regulate insurance companies and agents. |
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Term
| Fair Credit Reporting Act |
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Definition
| A law that requires a reporting agency to take action if a consumer complains about inaccurate information. |
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Term
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Definition
| An insurance company that is organized in the state where it is doing business |
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Term
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Definition
| Not losing cash values, when policy lapses for non-payment. Three options to choose from: cash surrender, reduced paid up, extended term |
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Term
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Definition
| Policy written on individual basis. It is either term insurance, permanent insurance or an endowment policy. |
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Term
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Definition
| A waiver of premium on the juvenile policy. If the premium payor dies or becomes totally disabled, the premium is waived until the insured child reaches a specified age. |
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Term
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Definition
| Allows for a portion of the premium to be refunded to the insured if he is permanently disabled |
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Term
| Preferred Provider Organization (PPO) |
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Definition
| Provides services at a pre-determined fee |
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Term
| Fixed period settlement option |
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Definition
| Once a person has died, the death proceed is paid out as a level amount on money, which is principal and interest over a specified period of time. |
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Term
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Definition
| Also known as a limited payment whole life policy Premiums are paid for a specific number of years, but the policy still endows at 100 |
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Term
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Definition
| An annuity that pays income to the annuitant for life or to a named beneficiary for a period certain if the annuitant has died |
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Term
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Definition
| A life policy that no longer requires a premium payment, yet still provides protection |
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Term
| California Insurance Guarantee Association |
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Definition
| Protects the insured if the insurance company becomes insolvent |
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Term
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Definition
| A receipt that verifies the agent received money from the applicant. Life insurance cannot be bound. |
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Term
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Definition
| Describes the kind of care a person needs who cannot preform the activities of daily living |
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Term
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Definition
| Endorsement to an insurance contract tht modifies clauses and provision of the policy |
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Term
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Definition
| Limits the insured'd out of pocket expenses |
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Term
| Fixed Period Settlement Option |
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Definition
| The insurer pays the beneficiary equal amounts of money consisting of principal plus interest at regular intervals over a period of years. |
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Term
| Disability Income Insurance |
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Definition
| Provides the insured with an income after being disabled due to an accident or illness |
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Term
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Definition
| Annuity guaranteeing a given number of income payments whether or not the annuitant is alive to receive them |
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Term
| Reduced Paid-Up Insurance |
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Definition
| A life insurance policy that reduces the death benefit for life of insured with no additional premium. A non-forfeiture option. |
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Term
| Occupational Disability Income |
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Definition
| Disability income policy that will pay benefits whether on the job or off the job |
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Term
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Definition
| Allows insured to change the current plan, usually withour evidence of insurability. Also a changing of a mutal company to a stock company |
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Term
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Definition
| Found in Property and casualty insurance. Can place insurance with non-admitted insurers. |
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Term
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Definition
| A security based permanent life insurance policy. The policyowner get to choose how the cash values are invested. (separate account) |
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Term
| Straight Life Settlement Option |
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Definition
| Pays the payee a specified income for his/her lifetime. Upon the payee's death, nothing further is paid to anyone |
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Term
| Nonparticipating Life Policies |
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Definition
| Policy not designed to pay the policyowner a dividend |
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Term
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Definition
| Usually decreasing term insurance: however also is Level Term or Increasing Term. This insurance covers the balance of a loan. |
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Term
| Nonoccupational Disability Income Policy |
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Definition
| Policy that will only pay a claim when the disability occurs off the job |
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Term
| Fixed Amount Settlement Option |
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Definition
| The death benefit is paid to the beneficiary in a series of fixed amount installment until the proceeds plus interest are exhausted |
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Term
| Coordination of Benefits (COB) |
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Definition
| Discourages multiple payments for the same claim under two or more policies |
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