Sunday, September 20, 2009

Insurance rate
The price of insurance per unit of coverage, usually expressed as a cost per dollar amount of coverage per year.

Insured
A person or organization that is protected by insurance.

Insurer
An insurance company or other organization that provides insurance.


Liability insurance
An insurance policy that protects against claims for legal liability. Provides legal defense and pays sums necessary to settle claims against the insured.


Limit of liability
The maximum amount an insurer will pay in the event of a covered loss.

Limited payment whole life
Whole life insurance on which premiums are payable for a specified number of years.

Loss
An event or circumstance for which insurance may pay.





Major medical expense insurance
Insurance that pays for a broad range of medical services up to a very high maximum amount. It is usually subject to a deductible amount and percentage participation. Also called major medical.


Medical payments coverage
A form of insurance that pays for medical and funeral expenses without regard to liability. It is available in auto policies and other policies that provide liability coverage.

Mutual insurance company
An insuring organization that is owned by its policyholders.

Named peril insurance
Any insurance that specifies the perils (risks) it covers.

No-fault system
A system in which reimbursement for injuries on the basis of fault (tort liability) is not legally available.

Nonforfeiture options
Alternatives available to a policyowner who discontinues premium payments on a policy of insurance.

Nonparticipating insurance
Insurance provided by policies on which no policy dividends are payable. Also called nonpar.

Participating insurance
Insurance provided by policies on which dividends are payable.

Permanent life insurance
Loosely, any form of individual life insurance that develops a cash value.

Policy loan
A loan made by a life insurance company to a policyowner on the security of a policy's cash surrender value.


Policyholder
The person or entity who pays for, and therefore owns, an insurance policy. This is usually the insured, but it may also be a relative of the insured, a partnership, or a corporation. Also called a policyowner.



Premium
The price of an insurance policy.

Replacement cost
The cost of replacing damaged or destroyed property with new property, without deducting for depreciation.

. Risk
The cause of a possible loss. Also referred to as peril.

. Settlement options
The alternatives, other than immediate payment in cash, in which a life insurance beneficiary may choose to have policy benefits paid.


Stock insurance company
A corporate insuring organization owned by stockholders.


Straight life insurance
Whole life insurance on which premiums are payable for life.

Subrogation

A legal principle which provides that, to the extent an insurer has paid for a loss, the insurer receives the policyholder's right to recover from any third party who caused the loss.


Term life insurance
Life insurance payable to a beneficiary when the insured dies within a specified period. If the insured is living at the end of the period, the policy expires without value.


Underwriting
The process by which insurers decide which losses to insure and how to insure them.

Uninsured motorists coverage
A form of auto insurance that pays the damages that insured persons are legally entitled to collect from uninsured motorists.







Waiting period
In disability income insurance, the period of time between the beginning of a disability and the date that the policy's income payments begin. In group insurance, the period an employee must work for a firm in order to qualify for coverage.


Waiver of premium
A life or health insurance policy provision stating that premiums will not be charged if the insured person becomes totally and permanently disabled

Whole life insurance
Life insurance payable to a beneficiary at the death of the policyholder, whenever that occurs. Premiums may be payable for a specified number of years (limited payment life insurance) or for life (straight life insurance).

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