Life Insurance Glossary
A
Accelerated Death Benefits
The death benefits that are available prior to the death of the insured, and are usually accessible in cases of chronic or terminal illness.
Accident
An event that happens by chance, typically resulting in damage or injury.
Accident Threshold
A specific dollar amount that must be paid out on a particular claim type before it can become chargeable.
Accidental Death (AD)
This optional coverage pays for death expenses if, in a covered accident, bodily injury causes the death of you or a covered family member.
Accidental Death and Dismemberment Insurance
An insurance policy that pays out only if the insured dies, becomes blind or is dismembered in an accident.
Actuary
Third-party professional who calculates premium rates, risks, etc. for the pricing of insurance policies.
Adjuster
The insurance company employee who investigates insurance claims and determines policyholder’s claims.
Annuity
Pays a fixed sum of money at regular intervals, usually for life.
Applicant
The person applying for an insurance policy
B
Beneficiary
The one who receives proceeds from a life insurance policy at the death of the insured.
Bodily Injury
Physical injury caused by an accident.
Bodily Injury Liability
Pays damages for physical injuries or death resulting from an accident you cause.
Broker
Someone who negotiates insurance contracts on behalf of insurers
C
Cancellation
When a policy is terminated before the expiration date
Carrier
An insurance provider
Claim
A request for payment by the policyholder after an accident or other loss
Claimant
The person making the claim
Claims Adjuster
The person who determines the cause of the loss and whether or not it’s covered under the insurance policy.
Collision Coverage
Add-on coverage that protects your ATV from damage caused by a collision with another vehicle or object, regardless of fault.
Comprehensive/Other Than Collision Coverage
Payment for repairs or replacement of your ATV damaged by something other than a collision. This can include vandalism, theft, smoke, etc.
D
Date Restrictions
With some policies, your boat is only insured during specific dates of the year.
Death Benefit
The amount of money paid to the beneficiary when the policyholder dies.
Declarations Page
The section of an insurance contract containing such information as the name, description, and location of insured property; the name and address of the policyholders; the period for which the policy is in force; premiums payable; and the amount of coverage.
Delinquent
A bill or policy that is overdue in payment
Driver Not Rated
A status given when the driver is not rated and not insured.
E
Earned Premium
The amount of premium that an insurance company has earned on your policy.
Evidence of Insurability
A statement of the prospective policyholder’s physical health, assets and income, which helps the insurance company decide whether the applicant is eligible for insurance.
F
Field Representative
An employee of the insurance company that works within a specific territory.
Flat Cancellation
The cancellation of an insurance policy before the insurance company has assumed liability, resulting in the insured getting their premium refunded.
Fraud
A deliberate misrepresentation for gain.
G
Grace Period
Some auto insurance policies have a time frame that allows customers to make a payment after the due date.
Group Life Insurance
Life insurance that is offered by an employer (or a large organization) to its employees.
H
I
Installment Fee
A fee charged when making monthly installment payments of an insurance premium
Installment Premium
One or more payments made by the insured until the entire insurance premium is fully paid. They may be made monthly, quarterly, or semi-annually at a slight additional charge.
Insuring Agreement
The portion of an insurance policy that specifies which risks are covered and also lists the exclusions.
L
Lapse in Coverage
A period of time when a person goes without insurance coverage
Lifetime Coverage
Insurance policy that has a coverage term that’s equal to the lifetime of the insured person.
M
Medical Payments Coverage
Helps pay for your medical and funeral expenses if you’re in an accident.
Misrepresentation
Giving false or misleading information
N
NAIC Number
A number issued by the National Association of Insurance Commissioners (NAIC) for each individual underwriting company.
Non-Smoker Rates
A lower rate for people who don’t smoke
O
Occurrence
An occurrence policy covers claims made for injuries sustained during the life of an insurance policy. It covers losses that take place during a specific coverage period, regardless of when an incident is reported.
P
Policy Limit
The maximum amount an insurance company will pay for a loss covered by the insurance policy.
Policy Rewrite
The process of terminating a policy before the expiration date stated in the policy, and issuing a new policy.
Primary Insurance
The policy that will respond first in the event that a loss is covered by more than one policy.
Pro Rata Cancellation
Cancellation on an insurance policy in which the policyholder is fully refunded for premiums that have been paid in advance.
Q
Quote
An estimate of the price of your potential insurance policy.
R
Rating
The determination of the cost of a premium based on risk characteristics and calculation of the chance of a loss.
Reciprocal
The information that is transferred from one state to another.
Reinstate
When a policy is reactivated without lapse after cancellation or expiration.
Renewal With Lapse
When a policy is renewed past the expiration date, after a period without coverage.
Risk
The chance of loss to the insured that’s related to the insurance policy.
S
Short Rate Cancellation
When an insured cancels the insurance policy prior to the expiration date and a penalty is applied to the refund amount based on the time remaining on the policy.
Standard Risk
The risk that is considered normal at standard rates by an underwriter
Surcharge
An additional amount of money charged to a premium based on the actions of the insured such as accidents or moving violations.
T
Term
The period of time that the insurance policy is active.
Term Life Insurance
A life insurance policy for a specified time period such as 5, 10 or 20 years.
U
Umbrella Insurance
Extra liability insurance that provides an extra layer of security from large claims or lawsuits.
Underinsured Property Damage
Coverage for property damage caused by a party who is at fault and not sufficiently insured
Uninsured and Underinsured Motorist Coverage
Provides coverage for injuries you and others suffer when you’re in an accident with an uninsured driver, or a driver without adequate insurance.
Underwrite
The process of evaluating the risk of insuring an automobile.
V
Voided
A life insurance policy that has been canceled and cannot be reinstated.
W
Warranty
Written assurance of a product’s reliability and the manufacturer’s accountability to replace or repair defective parts.
Written No-Loss Statement
A written and signed statement by the insured that claims no losses, no accidents, and no damage was done to the insured vehicle between the time your policy canceled to the time of reinstatement.
Written Premium
The amount of the premium charged for a policy that has already become effective.