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Insurance Glossary

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  • Abandonment Clause:
    A clause often contained in a property insurance policy stating that the insured cannot abandon damaged property and then file a claim with an insurer.

  • Absolute Liability:
    The liability for damages even though fault / negligence cannot be proven.

  • Accident:
    Any sudden event which is unintended.

  • Accident Insurance:
    Insurance coverage against loss by accidental bodily injury.

  • Accidental Bodily Injury:
    Injury to a person from the result of an accident.

  • Accidental Death Benefit:
    An additional paid death benefit in addition to the face amount value of a life insurance policy.

  • Accounts Receivable Coverage Form:
    An inland marine coverage form that insures against loss the insured suffers when not able to collect account receivables from customers.

  • Accumulation Period:
    A specific time period that the insured must establish before benefits begin or are paid out.

  • Activities of Daily Living:
    Activities that are considered an everyday part of normal life. Some of these are: dressing, bathing, toileting, transferring (example: moving from and into a chair), and eating. These activities are used to measure the degree of impairment and can effect the eligibility for certain types of insurance benefits.

  • Actual Cash Value (ACV):
    The cost to replace an item or property at the time of loss, less any allowance for depreciation.

  • Actuarial Cost Method:
    A method used for determining contributions to be made under a retirement plan. Usually applied to the level of benefits when the contributions are fixed.

  • Actuary:
    A professional in the insurance business, usually working for the insurance company, that can estimate how a certain sum of money can be contributed to a pension plan, insurance, or other related area to fund that plan for years to come.

  • Additional Insured:
    An individual or entity that is not included as an insured under the insurance policy of another, but may be added to provide a certain degree of insurance protection.

  • Adhesion (Contract of):
    Parties are of unequal bargaining power, and one party (the insured) cannot negotiate any terms, having to accept the offer of the other party.

  • Adjustable Life Insurance:
    A type of life insurance that allows the owner of a policy to change the plan of insurance, raise or lower the face amount, increase or decrease the premium, and lengthen or shorten the protection period.

  • Adjusted Gross Estate:
    Approximate net worth of a deceased, known as the beginning point for the computation of estate taxes.

  • Adjuster:
    A person who investigates and settles losses for an insurance company, or may be hired independently to resolve any issues (leverage) between the insurance company adjuster and the insured.

  • Adjusting:
    The investigation process of settling claims by an insurance company.

  • Administrative Services Only (AS0) Plan:
    An arrangement under which an insurance company or an independent agent will, for a fee, handle the administration of claims, benefits and other administrative functions for a self-insured group. This is very popular with larger corporations.

  • Advance Funding:
    Pension funding method in which an employer sets aside funds prior to the employee's retirement.

  • Age Limits:
    Stipulated minimum and maximum ages below and above which the company will not accept applications or may not renew a policy. Read your policy.

  • Agent:
    An insurance company representative licensed by the state who solicits, markets, negotiates, binds, and administers contracts of insurance while providing a valuable service to a policyholder for the insurer.

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

  • Aggregate Indemnity:
    A maximum dollar amount that can be collected for any disability or period of disability under an insurance policy .

  • Alien Insurer:
    An insurance company domiciled in another country.

  • Allocated Benefits:
    Benefits for which the maximum amount payable for specific services is itemized in your insurance contract.

  • All-Risk Policies:
    Coverage through an insurance contract that promises to cover all losses except those losses specifically excluded in your policy.

  • Alternate Delivery Systems:
    This system of care is designed to provide needed services in a cost-effective manner. This provides an insured with health services other than an in-patient, acute-care hospital, or other type of facility.Some examples include: skilled and intermediary nursing facilities, hospice programs, and home health care.

  • Ambulatory Care:
    These are medical services that are provided as an outpatient (nonhospitalized). Services could include diagnosis, treatment, and rehabilitation.

  • Amendment:
    A formal document revising the provisions of an insurance policy. Usually, signed jointly by an insurance company officer and the policy owner or his authorized representative.

  • Annual Statement:
    An annual report of an insurance company to a state insurance department, showing financial data relating to the operation of the insurance company.

  • Annuitant:
    The person that will receive annuity benefits for a period of time.

  • Annuity:
    Considered to be the opposite of life insurance where a death benefit is paid, an annuity provides a benefit while the insured is alive. This is a contract that provides an income for a specified period of time.

  • Annuity Certain:
    A contract that provides an income for a specified number of years, regardless whether living or deceased.

  • Annuity Consideration:
    A payment, or one of the regular periodic payments, an annuitant makes for their annuity.

  • Application:
    A signed statement of facts made by a person applying for insurance. The application is 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.

  • Arson:
    The willful and malicious act of burning, or attempt to burn, any structure or property, usually with with criminal or fraudulent intent.

  • Assets:
    Any funds, goods , property, rights of actions, securities, or resources of any kind owned by an insurance company.

  • Assignment:
    A legal transfer of one person's interest in an insurance policy to another person.

  • Association Captive:
    A type of captive insurer owned by the members of a sponsoring organization or group, such as a trade association.

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

  • Association Group Plan:
    A health insurance plan designed for the members of a professional association or trade association. A members may be protected under a group health insurance policy or by individual franchise policy through this plan.

  • Assumptions:
    The many conditions and rules underlying the calculation of a pension benefit.

  • Attractive Nuisance:
    Condition that can attract and injure children. The occupants of land on which such a condition exists are liable for injuries to children. In Florida, pool owners are required to fence the area around the pool.

  • Automatic Premium Loan:
    The cash borrowed from a life insurance policy's cash value (to pay an overdue premium).

  • Automobile Liability Insurance:
    Protection for an insured against financial loss because of legal liability act that has car related injuries to others or damage to their property.

  • Automobile Physical Damage Insurance:
    Coverage to pay for damage to, or loss of, an insured automobile resulting from covered perils.

  • Automobile Shared Market:
    A program in which all automobile insurers in each state make coverage available to car owners who are unable to obtain auto insurance in the voluntary market.

  • Aviation Insurance:
    Aircraft insurance including coverage of aircraft or their contents. The owner's liability, and accident insurance on the passengers can be covered

 
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Insurance Glossary is Copyrighted By Richard H. Reynolds.
Insurance Network of America Uses This Glossary By Permission.

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Important Note: This website provides only a simplified description of coverages and is not a statement of contract. Coverage may not apply in all states. For complete details of coverages, conditions, limits and losses not covered, be sure to read the policy, including all endorsements.

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