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

A type of coverage that pays benefits, sometimes including reimbursement for loss of income, in case of sickness, accidental injury, or accidental death.

A form of health insurance against loss by accidental bodily injury.

Injury to the body as the result of an accident.

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."

The process of recording, summarizing, and allocating all items of income and expense of the company and analyzing, verifying, and reporting the results.

1) The time between the first premium payment and the first benefit payout 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.

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.

The insurer's cost of putting new business in force, including the agent's commission, the cost of clerical work, fees for medical examinations and inspection reports, sales promotion expense, etc.

A list of activities, normally including mobility, dressing, bathing, toileting, transferring, and eating which are used to assess degree of impairment and determine eligibility for some types of insurance benefits.

1) The cost of replacing or restoring property at prices prevailing at the time and place of the loss, less depreciation, however caused; 2) replacement cost minus.

One of several systems for determining either the contributions to be made under a retirement plan, or level of benefits when the contributions are fixed. In addition to forecasts of mortality, interest and expenses, some of the methods involve estimates of future labor turnover, salary scales and retirement rates.

If the present values of two series of payments are equal, taking into account a given interest rate and mortality according to a given table, the two series are said to be actuarially equivalent on this basis. For example, a lifetime monthly benefit of $67.60 beginning at age 60 (on a given set of actuarial assumptions) can be said to be the actuarial equivalent of $100 a month beginning at age 65. The actual benefit amounts are different but the present value of the two benefits, considering mortality and interest, is the same.

A person professionally trained in the technical aspects of pensions, insurance and related fields. The actuary estimates how much money must be contributed to an insurance or pension fund in order to provide future

an assured party specifically named under an insurance policy

A type of insurance that allows the policyholder to change the plan of insurance, raise or lower the face amount of the policy, increase or decrease the premium and lengthen or shorten the protection period.

Approximately the net worth of the deceased--the beginning point for the computation of estate taxes.

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

The process of investigating and settling losses with or by an insurance carrier.

Organization for adjusting insurance claims that is supported by insurers using the bureau's services.

An arrangement under which an insurance carrier or an independent organization will, for a fee, handle the administration of claims, benefits and other administrative functions for a self-insured group.

Pension-funding method in which the employer systematically and periodically sets aside funds prior to the employee's retirement.

Mutual insurance company owned by the policyowners that does not issue assessable policies but charges premiums expected to be sufficient to pay all claims and expenses.

The tendency of persons who present a poorer-than-average risk to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss.

Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew policies.

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.

Deductible in some property and health insurance contracts in which all covered losses during a year are added together and the insurer pays only when the aggregate deductible amount is exceeded.

The maximum dollar amount that may be collected for any disability or period of disability under the policy.

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.

An insurance company domiciled in another country.

Coverage by an insurance contract that promises to cover all losses except those losses specifically excluded in the policy. See also: Risks of direct loss to property.

Benefits for which the maximum amount payable for specific services is itemized in the contract.

Health services provided in other than an in-patient, acute-care hospital. Examples include skilled and intermediary nursing facilities, hospice programs, and home health care. Alternate delivery systems are designed to provide needed services in a more cost-effective manner.

Medical services that are provided on an outpatient (nonhospitalized) basis. Services may include diagnosis, treatment, and rehabilitation.

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.

Paying an interest-bearing liability by gradual reduction through a series of installments, as opposed to one lump-sum payment.

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 person during whose life an annuity is payable, usually the person to receive the annuity.

A contract that provides an income for a specified period of time, such as a number of years or for life.

A contract that provides an income for a specified number of years, regardless of life or death.

The payment, or one of the regular periodic payments, an annuitant makes for an annuity.

The tendency of persons who present a poorer-than-average risk to apply for, or continue, insurance to a greater extent than do persons with average or better-than-average expectations of loss.

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. The application becomes part of the insurance contract when the policy is issued.

A form of alternative dispute resolution where an unbiased person or panel renders an opinion as to reponsibility for or extent of a loss.

The willful and malicious burning of, or attempt to burn, any structure or other property, often with criminal or fraudulent intent.

An insurer that does not charge a fixed premium for insurance, but rather assesses its members periodically to pay its losses. Assessment insurers usually collect an advance premium which is estimated to cover losses and expenses, but reserve the right to make additional assessments whenever the premium collected is insufficient.

Mutual insurance company that has the right to assess policyowners for losses and expenses.

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 (GAAP).

The legal transfer of one person's interest in an insurance policy to another person.

A group formed from members of a trade or a professional association for group insurance under one master health insurance contract.

Health insurance plans designed for members of a professional association or trade association. Members may be protected under a group health insurance policy or by individual franchise policies.

an endorsement to an insurance contract stating that reinsurance proceeds will be paid directly to the named payee in the event of an insurer's insolvency

Defense against a negligence claim that bars recovery for damages if a person understands and recognizes the danger inherent in a particular activity or occupation.

Conditions and rules underlying the calculation of a pension benefit, including expected interest, mortality and turnover.

These terms are today generally accepted as synonymous, although not originally so. The term "assurance" is used more commonly in Canada and Great Britain than in the United States.

the dollar amount of loss where an insurance begins to provide coverage

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.

An agreement that the insurer must cede and the reinsurer must accept all risks within certain explicitly defined limits. The reinsurer undertakes in advance to grant reinsurance to the extent specified in the agreement in every case where the ceding company accepts the application and retains its own limit.

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 called "Assigned Risk."

Protection for the insured against financial loss because of legal liability for car-related injuries to others or damage to their property.

Coverage to pay for damage to or loss of an insured automobile resulting from collision, fire, theft, or other perils.

Under the OASDI program, the person's actual earnings are indexed to determine his or her primary insurance amount (PIA).

Aircraft insurance including coverage of aircraft or their contents, the owner's liability, and accident insurance on the passengers.Beneficiary: The person designated or provided for by the policy terms to receive any benefits provided by the policy or plan upon the death of the insured.

the allegation that insurers have failed to act in good faith, i.e., that they have acted in a manner inconsistent with what a reasonable policyholder would have expected

Policy that covers the loss or damage to property of customers regardless of a bailee's legal liability.

An amount attributed to an asset for income tax purposes; used to determine gain or loss on sale or transfer; used to determine the value of a gift.

A period of time typically one to three years during which major medical benefits are paid after the deductible is satisfied. When the benefit period ends, the insured must then satisfy a new deductible in order to establish a new benefit period.

The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage.

A written or oral contract issued temporarily to place insurance in force when it is not possible to issue a new policy or endorse the existing policy immediately. A binder is subject to the premium and all the terms of the policy to be issued.

A receipt given for a premium payment accompanying the application for insurance. If the policy is approved, this binds the company to make the policy effective from the date of the receipt.

The period during which Social Security benefits are not paid to a surviving spouse- between the time the youngest child reaches age sixteen and the widow's sixtieth birthday.

A contract of health insurance affording benefits, such as accidental death and dismemberment, for all of a class of persons not individually identified. It is used for such groups as athletic teams, campers, travel policy for employees, etc.

A provision which entitles the insured person to collect up to a maximum established in the policy for all hospital and medical expenses incurred, without any limitations on individual types of medical expenses.

An independent, nonprofit membership corporation providing protection on a service basis against the cost of hospital care in a limited geographical area.

An independent, non-profit membership corporation providing protection on a service basis against the cost of surgical and medical care in a limited geographical area.

A special package policy for boat owners that combines physical damage insurance, medical expense insurance, liability insurance, and other coverages in one contract.

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 certificate issued by a government or corporation as evidence of a debt. The issuer of the bond promises to pay the bondholder a specified amount of interest for a specified period and to repay the loan on the expiration (maturity) date.

the number, size and type of accounts (policyholders) that an agent "owns."

the purchase price minus accounting depreciation

An itemized statement of transactions, today resembling a spreadsheet format, commonly used in reinsurance.

Type of life insurance marketing system under which branch offices are established in various areas. Salaried branch managers, who are employees of the company, are responsible for hiring and training new agents.

A calendar year, plan year or other consecutive 12-month period designated by the plan during which a plan participant does not complete more than 500 hours of service.

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

overage against property losses due to burglary, robbery, or larceny.

lost profits resulting from damage to property that halts the business

A policy which primarily provides coverage of benefits to a business as contrasted to an individual. It is issued to indemnify a business for the loss of services of a key employee or a partner who becomes disabled.

Protection for a business owner against losses resulting from a temporary shutdown because of fire or other insured peril. The insurance provides reimbursement for lost net profits and necessary continuing expenses.

Life insurance purchased by a business enterprise on the life of a member of the firm. It is often bought by partnerships to protect the surviving partners against loss caused by the death of a partner, or by a corporation to reimburse it for loss caused by the death of a key employee.

An agreement made by the owners of a business to purchase the share of a disabled or deceased owner. The value of each owner's share of the business and the exact terms of the buying-and-selling process are established before death or the beginning of disability.

Generic term for an employee benefit plan that allows employees to select among the various group life, medical expense, disability, dental, and other plans that best meet their specific needs. Also called flexible benefit plans.

Amount payable by an insured during a calendar year before a group or individual health insurance policy begins to pay for medical expenses.

A contract of health insurance that may be canceled during the policy term by the insurer or insured.

The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.

The amount of capital available to an insurance company or to the industry as a whole for underwriting general insurance coverage or coverage for specific perils.

Profit realized on the sale of securities, properties or other assets. An unrealized capital gain is an increase in the value of the assets that have not been sold.

A method used to estimate the amount of life insurance to own. Under this method, the insurance proceeds are retained and are not liquidated.

A method of payment for health services in which a physician or hospital is paid a fixed, per capita amount for each person served regardless of the actual number of services provided to each person.

A company owned solely or in large part by one or more non- insurance entities for the primary purpose of providing insurance coverage to the owner or owners.

Insurance company established and owned by a parent firm in order to insure its loss exposures while reducing premium costs, providing easier access to a reinsurer, and perhaps easing tax burdens. See also Association captive; Pure captive.

A pension plan formula that bases retirement benefits on earnings during all years of service to the employer.

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 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 tornad

Form added to commercial property insurance policy that indicates the causes of loss that are covered. There are four causes-of-loss forms: basic, broad, special, and earthquake.

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.

Professional who has attained a high degree of technical competency in financial planning and has passed a series of professional examinations

Professional in property and liability insurance who has passed a series of examinations by the Society of Certified Insurance Counselors.

Amount of the insurance ceded to a reinsurer by the original insuring company in a reinsurance operation.

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.

An individual who has attained a high degree of technical competency in the fields of financial planning, investments, and life and health insurance and has passed ten professional examinations administered by The American College.

An individual who has attained a high degree of technical competency in the fields of life and health insurance and who is expected to abide by a code of ethics.

Professional who has attained a high degree of technical competency in property and liability insurance and has passed ten professional examinations administered by the American Institute for Property and Liability Underwriters.

Allows auto insureds the choice of remaining under the tort system or choosing no-fault at a reduced premium.

the portion of law that deals with interactions between individual. The two branches of civil law are contract law and tort law.

A request for payment of a loss which may come under the terms of an insurance contract.

A liability insurance policy under which coverage applies to claims filed during the policy period.

Person who settles claims: an agent, company adjustor, independent adjustor, adjustment bureau, or public adjustor.

Rate-making method in which similar insureds are placed in the same underwriting class and each is charged the same rate. Also called manual rating.

1) A provision under which an insured who carries less than the stipulated percentage of insurance to value, will receive a loss payment that is limited to the same ratio which the amount of insurance bears to the amount required; 2) a policy provision frequently found in medical insurance, by which the insured person and the insurer share the covered losses under a policy in a specified ratio, i.e., 80 percent by the insurer and 20 percent by the insured.

Protection against loss resulting from any damage to the policyholder's car caused by collision with another vehicle or object, or by upset of the insured car, whether it was the insured's fault or not.

Basically, a measure of the relationship between dollars spent for claims and expenses and premium dollars taken in; more specifically, the sum of the ratio of losses incurred to premiums earned and the ratio of commissions and expenses incurred to premiums written. A ratio above 100 means that for every premium dollar taken in, more than a dollar went for losses, expenses, and commissions.

Commercial liability policy drafted by the Insurance Services Office containing two coverage forms-an occurrence form and a claims-made form.

A package of insurance that includes a wide range of essential coverages for the commercial establishment.

A commercial policy that can be designed to meet the specific insurance needs of business firms. Property and liability coverage forms are combined to form a single policy.

he part of an insurance premium paid by the insurer to an agent or broker for his services in procuring and servicing the insurance.

the law that has evolved over time as a result of previous court decisions, rather than having been enacted by a legislative body

A special ownership form requiring that one-half of all property earned by a husband or wife during marriage belongs to each. Community property laws do not generally apply to property acquired by gift, by will, or by descent.

a notation as defined by actuaries to combine various elements of an actuarial computation in a manner that makes a formula look simpler

a table that combine elements (e.g., interest and mortality) into a single value to facilitate further computations

Claims adjustor who is a salaried employee representing only one company.

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.

Liability arising out of faulty work performed away from the premises after the work or operations are completed. Applicable to contractors, plumbers, electricians, repair shops, and similar firms.

Protection against loss resulting from damage to the insured auto, other than loss by collision or upset.

A policy designed to give the protection offered by both a basic and a major medical health insurance policy. It is characterized by a low deductible amount, a coinsurance feature, and high maximum benefits.

A form of health insurance which provides, in one policy, protection for both basic hospital expense and major medical expense coverages. The major medical part of a comprehensive policy is characterized by a deductible amount, coinsurance, and high maximum benefits.

Protection against loss arising out of legal liability to pay money for damage or injury to others for which the insured is responsible. It does not include automobile or business operation liabilities.

Insurance laws in some states required motorists to carry at least certain minimum auto coverages. This is called "compulsory" insurance.

Any form of insurance which is required by law.

Law protecting accident victims against irresponsible motorists by requiring owners and operators of automobiles to carry certain amounts of liability insurance in order to license the vehicle and drive legally within the state.

Deliberate failure of an applicant for insurance to reveal a material fact to the insurer.

Legal doctrine that states when a property loss is due to two causes, one that is excluded and one that is covered, the policy provides coverage.

A receipt given for premium payments accompanying an application for insurance. If the application is approved as applied for, the coverage is effective as of the date of the prepayment or the date on which the last of the underwriting requirements, such as a medical examination, has been fulfilled.

Continuance provision of a health insurance policy under which the company cannot cancel the policy during its term but can refuse to renew under certain conditions stated in the contract.

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.

One of the elements for a binding contract. Consideration is acceptance by the insurance company of the payment of the premium and the statement made by the prospective policyholder in the application.

The clause that stipulates the basis on which the company issues the insurance contract. In health policies, the consideration is usually the statements in the application and the payment of premium.

an insurance claim where the value to repair the property exceeds the market value of that property

An option under which an employee may elect to receive, under certain conditions, a reduced amount of annuity with the same income, or a specified fraction, to be paid after his death to another person designated as his contingent annuitant, for that person's lifetime. The contingent annuitant is usually the husband or the wife.

The person or persons designated to receive the benefits of a policy or plan if the primary beneficiary dies while the insured is living.

provides payment on behalf of the employer for bodily injury to an employee if that person is ineligible to receive workers compensation benefits, e.g., an "occasional" employee.

Liability arising out of work done by independent contractors for a firm. A firm may be liable for the work done by an independent contractor if the activity is illegal, the situation does not permit delegation of authority, or the work is inherently dangerous.

The person to succeed as owner of a life insurance policy if the original owner dies.

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.

The group, entity or person to whom a group annuity contract is issued.

the portion of civil law that interprets written agreements between parties and resolves disputes between them.

Occurs when one party to the contract writes it and offers other parties only the option of acceptance or rejection. In such a circumstance the law interprets any ambiguities in the contract against the party writing it.

Legal liability of another party that the business firm agrees to assume by a written or oral contract.

a major method of loss financing through which a legal agreement is used to transfer risk to another party

Type of other-insurance provision often found in liability insurance contracts that requires each company to share equally in the loss until the share of each insurer equals the lowest limit of liability under any policy or until the full amount of loss is paid.

A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan. Seventy-five percent of the eligible employees must be insured.

Negligence of the damaged person that helped to cause the accident. Some states bar recovery to the plaintiff if the plaintiff was contributorily negligent to any extent. Others apply comparative negligence.

A privilege granted in an insurance policy to convert to a different plan of insurance without providing evidence of insurability. The privilege granted by a group policy is to convert to an individual policy upon termination of group coverage.

The right given to an insured person to change insurance without evidence of medical insurability, usually to an individual policy upon termination of coverage under a group contract.

A bond that offers the holder the privilege of converting the bond into a specified number of shares of stock.

Term insurance which can be exchanged, at the option of the policyholder and without evidence of insurability, for another plan of insurance. Credit life insurance. Term life insurance issued through a lender or lending agency to cover payment of a loan, installment purchase, or other obligation, in case of death.

The mechanism used in group health insurance to designate the order in which the multiple carriers are to pay benefits and to prevent duplicate payments.

Major medical plan deductible that excludes benefits provided by a basic plan if both a basic and a supplemental group major medical expense policy are in force.

An amount attributed to an asset for income tax purposes; used to determine gain or loss on sale or transfer; used to determine the value of a gift

The controller reduction of inefficiencies in the consumption, allocation, or production of health care services that contribute to higher than necessary costs.

all costs related to pure risk which includes, from the perspective of shareholders, retained risk, loss prevention costs, insurance costs, and more.

he reduction in business value that arises as a result of risk

Benefit that can be added to a life insurance policy under which the policyowner can purchase one-year term insurance equal to the percentage change in the consumer price index with no evidence of insurability.

In life and health insurance, a policy covering a mortgagor with benefits intended to pay off the balance due on a mortgage upon the insured's death, or to meet the payments due on a mortgage in case of the insured's death or disability.

Companies with no capital stock, and owned by policyholders. The earnings of the company--over and above the payments of the losses, operating expenses and reserves--are the property of the policyholders.

An event that results in an insured loss. In some lines of business, such as liability, an occurrence is distinguished from accident in that the loss doesn't have to be sudden and fortuitous and can result from continuous or repeated exposure which results in bodily injury or property damage neither expected not intended by the insured.

In effect, insurance that an insurance company buys for its own protection. The risk of loss is spread so a disproportionately large loss under a single policy doesn't fall on one company. Reinsurance enables an insurance company to expand its capacity; stabilize its underwriting results; finance its expanding volume; secure catastrophe protection against shock losses; withdraw from a line of business or a geographical area within a specified time period.

The automatic re-establishment of in-force status effected by the payment of another premium.

The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.

In disability insurance, a benefit paid when you suffer a loss of income due to a covered disability or if loss of income persists. This benefit is based on a formula specified in your policy and it is generally a percentage of the full benefit. It may be paid up to the maximum benefit period.

Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and nonsmoking, male and female.

Management of the pure risks to which a company might be subject. It involves analyzing all exposures to the possibility of loss and determining how to handle these exposures through practices such as avoiding the risk, retaining the risk, reducing the risk, or transferring the risk, usually by insurance.

An incorporated insurer with capital contributed by stockholders, to whom earnings are distributed as dividends on their shares.

A set amount of time during which you have to keep the majority of your money in an annuity contract. Most surrender periods last from five to 10 years. Most contracts will allow you to take out at least 10% a year of the accumulated value of the account, even during the surrender period. If you take out more than that 10%, you will have to pay a surrender charge on the amount that you have withdrawn above that 10%.

Life insurance that provides protection for a specified period of time. Common policy periods are one year, five years, 10 years or until the insured reaches age 65 or 70. The policy doesn't build up any of the nonforfeiture values associated with whole life policies.

When a licensed insurance broker gives a client an price estimate of a term life insurance policy from an life insurance company  

A private wrong, independent of contract and committed against an individual, which gives rise to a legal liability and is adjudicated in a civil court. A tort can be either intentional or unintentional, and liability insurance is mainly purchased to cover unintentional torts.

A loss of sufficient size that it can be said no value is left. The complete destruction of the property. The term also is used to mean a loss requiring the maximum amount a policy will pay.

Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.

The process of selecting risks for insurance and classifying them according to their degrees of insurability so that the appropriate rates may be assigned. The process also includes rejection of those risks that do not qualify.

That part of the premium applicable to the unexpired part of the policy period.