Below you will find the definitions of some insurance terms. For further assistance, contact Carol Rowe.
Insurance Definitions
Accident - an unexpected event or circumstance without deliberate intent.
Accident Insurance - a form of insurance against loss by accidental bodily injury.
Accidental Death & Dismemberment - an insurance contract that pays a stated benefit in the event of death and/or dismemberment caused by accident or specified kinds of accidents.
Beneficiary - an individual who may become eligible to receive payment due to will, life insurance policy, retirement plan, annuity, trust, or other contract.
Claim - a request made by the insured for insurer remittance of payment due to loss incurred and covered under the policy agreement.
Convertible Term Insurance Policy - an insurance policy that can be converted into permanent insurance without a medical assessment. The insurer is required to renew the policy regardless of the health of the insured subject to policy conditions
Coordination of Benefits (COB) - provision to eliminate over insurance and establish a prompt and orderly claims payment system when a person is covered by more than one group insurance and/or group service plan.
Date of Issue - date when an insurance company issues a policy.
Dental Insurance - policies providing only dental treatment benefits such as routine dental examinations, preventive dental work, and dental procedures needed to treat tooth decay and diseases of the teeth and jaw.
Disability Income - a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness.
Effective Date - date at which an insurance policy goes into force.
Endorsement - an amendment or rider to a policy adjusting the coverages and taking precedence over the general contract.
Face Amount - the value of a policy to be provided upon maturity date or death.
Insured - party(ies) covered by an insurance policy.
Insurer - a company authorized to write insurance under the laws of any state.
Lapse - termination of a policy due to failure to pay the required renewal premium.
Long-Term Disability Income - policy providing monthly income payments for insureds who become disabled for an extensive length of time, typically two years or longer.
Occurrence - an incident which results, during the policy period in bodily injury or property damage neither expected or intended from the standpoint of the insured.
Policy - a written contract ratifying the legality of an insurance agreement.
Insurance Definitions Continued
Policy Period - time period during which insurance coverage is in effect.
Premium - Money charged for insurance coverage.
Renewable Term Insurance - insurance that is renewable for a limited number of successive terms by the policyholder and is not contingent upon medical examination.
Rider - an amendment to a policy agreement.
Short-term Disability - a company standard defining a period of time employees are eligible for short-term disability coverage, typically for 2 years or less.
Specified Disease Coverage - coverage that provides primarily pre-determined benefits for expenses of the care of cancer and/or other specified diseases.
Term - period of time for which policy is in effect.
Term Insurance - life insurance payable only if death of insured occurs within a specified time, such as 5 or 10 years, or before a specified age.
Underwriter - person who identifies, examines and classifies the degree of risk represented by a proposed insured in order to determine whether or not coverage should be provided and, if so, at what rate.
Underwriting - the process by which an insurance company examines risk and determines whether the insurer will accept the risk or not, classifies those accepted and determines the appropriate rate for coverage provided.
Underwriting Risk - section of the risk-based capital formula calculating requirements for reserves and premiums.
Universal Life Insurance - adjustable life insurance under which premiums and coverage are adjustable, company expenses are not specifically disclosed to the insured but a financial report is provided to policyholder's annually.
Vision - limited benefit expense policies. Provides benefits for eye care and eye care accessories. Generally, provides a stated dollar amount per annual eye examination. Benefits often include a stated dollar amount for glasses and contacts. May include surgical benefits for injury or sickness associated with the eye.