A & H
Assignment by the policy owner of all control and rights to a third party
A fortuitous event, unforeseen and unintended
A form of Health insurance that provides payment, the the death of the insured results in an accident. Often combines with Dismemberment insurance
Insurance against bodily injury, disability or death by accident or accidental means, or expense thereof, or against disability or expense resulting from sickness and the insurance relating thereto.
The unexpected cause of an accidental bodily injury. Most Health insurance policies cover it in that it covers accidents regardless of the cause.
A dividend or settlement option under which the policyholder allows his/her dividends or policy proceeds to accumulate interest with the company. Although the dividends or proceeds are not generally taxable, the interest earned is.
One concerned with the application of probability and statistical theory to insurance, utilizing the law of large numbers
also known as Double or Triple Indemnity. A rider added to a Life policy that will pay double the face amount if the insured dies as a result of accident, generally within 90 days of the accident.
A limited form of Health insurance that covers accident only. It is the only type of Health insurance that covers death. Policies do not follow the Principle of Indemnity, in that they pay in addition to any other coverage the insured has.
Person appointed by a court to settle a deceased's estate, sometimes called an executor.
Selection not in favor of the company. The tendency of poorer risks to want insurance more often than standard risks. Occurs when a person who is already sick purchases health insurance.
commonly called the ACA or “Obamacare” was signed into law on March 23, 2010. Representing a fundamental shift in the area of medical expense policies, the ACA provisions have taken effect over time.
The individual appointed by an insurance company to solicit and negotiate insurance contracts on its behalf. Agents or Producers represent the company, not the client.
An insurer organized and domiciled in a country other than the United States.
The party receiving the benefits of an annuity, similar to the insured on an insurance policy. Usually also owns the annuity, although you can buy an annuity to benefit another party, who would then be the ...
1) An amount of money payable yearly or, by extension, at other regular intervals. 2) An agreement by an insurer to make periodic payments that continue during the lifetime of the annuitant(s) or for a specified period. Considered to be the opposite of life insurance, since it pays while you’re alive and life insurance pays when you die. Life insurance proceeds create an estate, while annuities are used to liquidate an estate over a period of time.
The party making application to the insurance company for the policy. Applicants must provide the insurer with the truth to the best of their knowledge, which is known as a “representation.”
A form on which the prospective insured states facts requested by the insurer and on the basis of which (together with any information from medical examiners, attending physicians, hospitals, investigators, and the producer) the insurer decides whether or not to accept the risk, modify the coverage offered, or decline the risk. Without premium money is a Request for an Offer. With premium money, it is an Offer itself. If attached to the policy at issue, it becomes part of the Entire Contract.
The person to whom policy rights are assigned in whole or in part by the policy owner, who is known as the Assignor. On Life insurance there are two types of assignment: Absolute and Collateral.
Transfer of rights in a policy to another party by the policyholder. For example, if you bought a life insurance policy on a minor child, you are the owner and the child is the insured. When the child reaches age 21, you could assign all rights of ownership in the policy to the child. This is an absolute ___
The present age of the insured. Upon conversion, premiums are based on the current age of the insured.
A person to whom authorization is given by an individual to exchange insurance with other persons. Always present in a Reciprocal Insurance Company.
An insurer permitted to sell insurance within a state. Must obtain a Certificate of Authority from the Director (Insurance Commissioner) from every state they sell in
A rider in a Life policy authorizing the insurance company to use the cash value to pay premiums not paid by the end of the grace period. May be present in Whole Life or Endowment policies only, never Term since Term has no cash value. This rider is free, but must be selected by the policy owner.
Limits or excludes coverage when the insured is participating in specified types of air travel. Coverage is usually confined to regularly scheduled flights of commercial airlines. Often applies to student pilots.
A person who may become eligible to receive, or is receiving, benefits under an insurance plan, other than as a participant. The beneficiary is selected by the policy owner and may be changed at any time, unless “irrevocable.”
A contract of Health insurance that covers all of a class of persons not individually identified. Often written to cover school children or sports teams, such as Little League. No certificates are issued, since coverage applies to everyone that attends or participates.
Generic term for those insurers (usually on a service rather than reimbursement basis) who are authorized to use the designation “Blue Cross” or “Blue Shield.”
A Producer who represents an insured in the solicitation, negotiation, or procurement of contracts of insurance. For example, you might represent only one insurer as a Producer. If that insurer declines to write coverage for your client, you might try to “broker” the business elsewhere in an effort to better serve your customer.
Life or Health insurance written to cover business situations such as key person, sole proprietor, partnership, corporations, etc.
A contract of insurance that may be terminated by the insurance company or insured at any time. Virtually every form of insurance is this (unless state law prohibits such action), except Life insurance and those Health policies designated as Guaranteed Renewable or Non-cancelable and Guaranteed Renewable.
Termination of a contract of insurance mid-term (rather than at the renewal date) by voluntary act of the insurance company or insured, effected in accordance with provisions in the contract or by mutual agreement.
The maximum amount payable in one sum in event of Accidental Dismemberment. On an AD&D policy, the Principal sum is the amount payable for Accidental Death. It is generally 50% of the Principal Sum.
A dividend option under which the policyholder receives the dividends in cash. Not subject to tax. Mutual insurers issue “participating” policies, which might pay dividends, but they are not guaranteed.
The accumulated, guaranteed amount in a Whole Life or Endowment policy at any given point in time. Most contracts do not develop any until after the 3rd year. On Whole Life, it will equal the face amount of the policy at age 100.
A statement evidencing that a policy has been written and stating the coverage in general. On Group insurance, the employer receives the master policy and the employees receive COI.
A demand for payment under the insurance policy.
he grouping of persons for the purpose of determining an underwriting or rating group into
which a particular risk must be placed. For example, on Whole Life, the “standard” rate for the average person at age 30 might be $10 per $1,000 of face amount. If the insured is “sub-standard,” the rate will be higher. A Preferred risk receives a discount from the standard rate.
In Health insurance, a provision that the insured and insurance company will share covered losses in agreed proportion. it is often percentage participation, with the insurer paying 80% and the client paying 20%, up to a maximum “stop loss” amount. Applies after the deductible has been satisfied. The purpose of this is to keep the insured from over utilizing the coverage, since he/she has to pay part of every claim. HMOs utilize “co-payments” for office visits, rather than this.
Assignment of part of the proceeds of an insurance policy to a bank as collateral to settle the loan balance that may exist at the insured's death.
A provision that can be included in a Life contract, that provides that the Primary Beneficiary must outlive the insured by a specified period of time in order to receive the proceeds. If not, then the Contingent Beneficiary receives the proceeds. The provision is designed to protect the rights of the Contingent Beneficiary in the event of simultaneous (or nearly simultaneous) death of the insured and the Primary Beneficiary. The time limit is usually 10, 15, or 30 days, depending on state law.
A form of Health insurance that combines the coverage of Major Medical and Basic Medical Expense contracts into one broad contract that provides coverage for almost all types of medical expense, usually subject to a Corridor Deductible and to a Percentage Participation clause (sometimes called Coinsurance) applicable to all or some of the covered expenses.
The withholding of facts by an applicant for insurance, which materially affects an insurance risk or loss.
The more exact term for what is often called a "binding receipt" in Life and Health insurance. Provides that if premium accompanies the application, coverage shall be in force from the date of application (whether the policy has yet been issued or not) provided the insurance company would have issued the coverage on the basis of facts as revealed by the application and other usual sources of underwriting information. Remember, there is never any coverage unless the premium has been paid!
A contract of Health insurance that provides that the insured may renew the contract to a stated date or an advanced age, subject to the right of the insurer to decline renewal only under conditions defined in the contract.
The part of an insurance contract setting out the responsibilities of both the Insured and the Insurer, such as the requirements regarding Notice of Claim and Proof of Loss.
The exchange of value on which a contract is based. In Life and Health insurance, it is the premium and the statements in the application. Remember, it need not be equal. You might pay $1,000 in premium, but your policy will pay $100,000 if you die.
A clause in a Life policy specifying the premium due for the insurance protection and the frequency of payment (also called Mode). The more frequent the Mode of Payment, the higher the cost, since most insurers charge service fees for budget payments. The cheapest Mode is annual.
Person or persons named to receive benefits if the Primary Beneficiary is not alive when the insured dies. For example, the if the Primary Beneficiary might be your spouse and your children could be this.
A legal agreement between two parties for consideration, such as an insurance policy. To hold up in court, it must contain four required elements: Consideration, Offer, Acceptance and Legal Purpose (remember the acronym COAL). Parties must also have Legal Capacity.
Group insurance for which the employees pay part of the premium. If the group is contributory, at least 75% of those eligible must enroll in order to prevent “adverse selection.” In non- contributory groups, 100% must enroll.
Life insurance coverage written on the producer's own life and on the lives of such persons as the producer's relatives and business associates. The amount of controlled business a producer may write is restricted in most states, often to a maximum of 50% in a 12 month period.
A Term policy that can be converted at any time to a permanent type of coverage without proof of insurability. Premiums are based on current age and coverage cannot be increased. Most Term but not all. Most Group insurance, by law has this with 31 day grace period.
A Major Medical deductible that applies between benefits paid by the Basic plan and the start of the Major Medical benefits.
Insurance on a debtor in favor of a lender, intended to pay off a loan or the balance due thereon if the insured dies or is disabled. It is a type of decreasing term insurance and the face amount of the policy is limited to the amount of the loan. Generally not used as Mortgage Protection Insurance.
The policy proceeds to be paid upon the death of the insured. On life insurance, proceeds are not taxable