Terminology from word AAA

1. AAI
Accreditied Adviser in Insurance, a designation awarded by the Insurance
Institute of America to people who have completed a three-semester
educational program designed for insurance producers.

2. accelerated benefits
Benefits available in some life insurance policies before death, usually
triggered by long-term, catastrophic or terminal illness. Also known as living
benefits.

3. accident
An event that is unforeseen, unexpected, and unintended.

4. accidental bodily injury
Physical injury sustained as the result of an accident.

5. accident report form
An accident report form is used to record key information about the accident.

6. accidental death benefits
A provision added to a life insurance policy for payment of an additional
benefit in case of death that results from an accident. This provision is often
called "double indemnity."

7. account analyst
See Administrative Assistant.

8. account current
An account current is the billing statement an insurance company sends to its
producer.

9. account selling
Account selling is trying to handle all of a client's insurance needs, rather than
providing for only a portion of those needs.

10. accounts receivable insurance
Pays for the cost of reconstructing accounts receivable records that have been
damaged or destroyed by a covered peril. Even more important, it covers any
payments that cannot be collected because records cannot be reconstructed.
-

11. accredited adviser in insurance
See AAI.

12. actual cash value (ACV)
The value of property as figured by determining what it would cost to replace
the property (see Replacement Cost) and then adjusting this replacement
cost by subtracting an amount that reflects depreciation.

13. ACV
See Actual Cash Value.

14. accumulation period
The time during which a person pays money into an annuity contract and
builds up a fund to provide a deferred annuity.

15. actuary
Someone professionally trained in the technical aspects of insurance and
related fields, particularly in the mathematics of insurance (the calculation of
premiums, reserves and other values). An actuary uses complex
mathematical methods, often with the aid of computers, to analyze past lossdata and other statistics and develop systems for determining future
premiums.

16. adjuster
See Claims Adjuster.

17. adjustable life insurance
A type of insurance that allows the policyholder to change the plan of
insurance, raise or lower the face amount of the policy, increase or decrease
the premium and lengthen or shorten the protection period.

18. administrative assistant
The administrative assistant supports the sales efforts of the producer. Other
titles for this position include agency underwriter, insurance placer, customer
service representative, marketing specialist, account analyst, and office
manager.

19. administrative services only (ASO) agreement
Contract between an insurer (or its subsidiary) and a group employer, eligible
group, trustee, or other party, in which the insurer provides certain
administrative services. These services may include actuarial support, plan
design, claims processing, data recovery and analysis, benefits
communications, financial advice, medical care conversions, data preparation
for governmental reports, and stop-loss coverage.

20. adverse selection
When people with a very high probability of loss purchase insurance to a
greater extent that people with average or below average probabilities of loss.
Underwriters' major goal is to avoid adverse selection.

21. age limits
Ages below and above which an insurance company will not accept
applications or renew policies.

22. agency billing
See Producer Billing.

23. agency underwriter
See Administrative Assistant.

24. agent
An authorized representative of an insurance company who sells and services
insurance contracts. See Producer, Exclusive Agent, Independent Agent.

25. aggregate indemnity
The maximum amount that may be collected for any disability, or period of
disability, under an insurance policy.

26. allocated benefits
Maximum amount for specific services as itemized in an insurance contract.

27. "all-risks"
"All Risks" property policies, often called "special" policies, cover any loss
unless it is caused by an excluded peril listed in the policy.

28. alternate delivery system
Health services that are more cost-effective than inpatient, acute-care
hospitals, such as skilled and intermediary nursing facilities, hospice
programs, and in-home services.

29. ambulatroy care
Medical services provided on an outpatient (non-hospitalized) basis. Services
may include diagnosis, treatment, surgery, and rehabilitation.

30. amendment
Document changing the provisions of an insurance contract signed jointly by
the insurer and the policyholder.

31. annuitant
The person entitled to receive annuity payments or who now receives them.

32. annuities
Annuities are contracts sold by life insurance companies (the seller must be a
licensed insurance entity in your state). In their simplest form, you pay a sum
of money (either a lump sum or a series of payments) and the insurance
company makes periodic payments to you, beginning on the date in your
contract and continuing for the rest of your life. The earnings on your annuity
payments are not taxable during the accumulation phase of your agreement;
the annuity payments are taxable as income when you receive them. Variable
annuities permit you to place your payments in professionally managed funds,
similar to mutual funds, and to control how these payments are invested
during the life of your contract. Unlike mutual funds, variable annuities have
insurance provisions and guarantees to preserve the value of the principal
you pay into the annuity. They also generally carry higher fees than mutual
funds. Annuities may entail extensive taxation and estate issues, and annuity
buyers should make sure they’re aware of such issues.

33. annuity certain
A contract that provides an income for a specified number of years,
regardless of life or death.

34. annuity consideration
The payment, or one of the regular periodic payments, an annuitant makes
for an annuity.

35. application
A statement of information made by someone applying for life insurance. The
information gathered helps the life insurance company assess whether the
risk presented by the applicant is acceptable to underwriters.

36. approval
Signifies the legal acceptance of forms by a state when policy information is
filed;
Signifies the insurer's acceptance of risks as set forth in an application for
insurance (as originally made or modified by the insurer); or
Signifies the acceptance of a request from an applicant or policyholder for
new insurance, reinstatement of a terminated policy, a policy loan, or other
request.

37. assigned risk plans
See Automobile Insurance Plans.

38. assignment
The legal transfer of one person's interest in an insurance policy to another
person.

39. association group
A group formed from members of a trade or professional association for
insurance under one master health insurance contract.

40. audit
During an audit, members of the home office staff underwriting department
examine files to see whether the underwriting guidelines are being followed.
Also see Premium Auditor.

41. audited premium
See Premium Auditor.

42. auto liability
Pays for damages that you cause to other people and their property. If you
cause an accident and you bang up your car or yourself, your auto liability
insurance will not pay for your medical bills or the repairs to your car. (Auto
medical payments coverage would.) But it will pay for the other guy’s, up to
the limits of your policy. Without the coverage, your assets would be subject
to seizure to pay the medical bills, car repairs and other damages that you
caused in an accident. Once the insurance company pays out the limits of
your policy, you’re liable for the rest, which is why it’s advisable to purchase
higher limits than what your state requires. Auto liability coverage has three
parts: bodily injury per person, bodily injury per accident, and property
damage. Limits for liability are usually written like "20/40/10." That means a
policy will pay bodily injury losses up to $20,000 per person, and up to
$40,000 per accident (if more than one person was hurt). It will also pay
property damage losses up to $10,000 per accident.

43. automatic premium loan
A provision in a life insurance policy that any premium not paid by the end of
the grace period (usually 31 days) is automatically paid by a policy loan if
there is sufficient cash value.

44. automobile insurance plans
Formerly known as assigned risk plans--are residual market programs
providing auto insurance. See Residual Market.

45. auto medical payments
If you cause an accident, the coverage works like this: Auto liability coverage
pays the bodily injury and property damage losses of the other person.
Collision coverage pays for repairs to your own vehicle. Auto medical
payments coverage pays medical and funeral expenses for you and your
passengers. If you already have health and disability insurance, the coverage
may be redundant.

46. auto physical damage coverage
Insures against loss resulting from damage to an auto owned by the insured;
also provides coverage if the car is stolen.

Terminology from words CCC

1. cancer insurance
A very narrow form of health insurance that covers the policyholder in the
event he or she contracts cancer. Policies often exclude skin cancer. Some
policies won't pay for cancer treatments until several years after the policy
was purchased. Consumer groups and insurance regulators have said cancer
insurance policies are more expensive than they're worth, since the insurance
companies pay out a rather small percentage of the premiums they collect.

2. capitation
Method of payment whereby a physician or hospital is paid a fixed amount for
each person in a particular plan regardless of the frequency or type of service
provided.

3. cash value
The amount available in cash upon surrender of a policy before it becomes
payable upon death or maturity.

4. certificate
A statement issued to individuals insured under a group policy, setting forth
the essential provisions relating to their coverage.

5. claim
Notification to an insurance company that payment of an amount is due under
the terms of the policy. A claim is a demand by a person or business who is
seeking to recover for a loss. A claim may be made against an individual. A
claim may also be made against an insurance company, when an insured asks
the insurance company to pay for a loss that may be covered by an insurance
policy.

6. co-insurance
Arrangement by which the insurer and the insured share, in a specific ratio,
payment for losses covered by the policy, after the deductible is met.

7. combination plans
Life insurance policies that combine features of term and whole life policies.

8. comprehensive medical expense insurance
Insurance that provides coverage, in one policy, for basic hospital expense
and major medical expense.

9. computer insurance
Covers computer equipment and peripherals beyond the normal coverage
provided in homeowner's insurance policies. Usually, homeowner's policies
only cover up to between $1,000 and $3,000 in computer equipment. With
more people owning expensive computers and peripherals, and even using
them for home-based businesses, riders and separate policies are becoming
more popular. Some policies are also designed to cover damage and/or theft
of portable equipment, such as laptop computers, and even the costs of data
recovery.

10. consolidate omnibus budget reconciliation act (COBRA)
Requires employers with more than 20 employees to make group health care
coverage available for 18 months, at the employee's expense, to employees
who leave the employer for any reason other than gross misconduct.

11. consideration clause
Stipulation that states the basis on which an insurer issues an insurance
contract.

12. contributory plan
Group plan under which the insured shares in the cost of the plan with the
policyholder.

13. conventional health plan
Plan that provides all benefits and issues certificates containing the insurance
company's guarantees.

14. conversion privilege
Right given to an insured person under a group insurance contract to change
coverage, without evidence of medical insurability, to an individual policy
upon termination of the group coverage. The conditions under which
conversion can be made are defined in the master policy.

15. convertible term insurance
Term insurance that offers the policyholder the option of exchanging it for a
permanent plan of insurance without evidence of insurability.

16. coordination of benefits (COB)
Method of integrating benefits payable under more than one health insurance
plan so that the insured's benefits from all sources do not exceed 100 percent
of allowable medical expenses or eliminate incentives to contain costs.

17. cost containment
Reduction of inefficiencies in the consumption, allocation, or production of
health care services. Inefficiencies can occur when health services are used
inappropriately; when health services could be delivered in less costly
settings; and when the costs could be reduced by using a different
combination of resources.

18. cost index
A way to compare the costs of similar plans of life insurance. A policy with a
smaller index number is generally a better buy than a comparable policy with
a larger index number.

19. covered expenses
Health care charges that an insurer will consider paying under the terms of a
health insurance policy.
20. cost-of-living rider
An option that permits the policyholder to purchase increasing term insurance
coverage. The death proceeds increase by a stated amount each year to
coincide with an estimated increase in the cost of living.

21. credit insurance
Optional coverage that pays off the balance of an outstanding loan in the
event you become disabled, unemployed or die. Exact coverage depends on
the particular policy. Variations include credit life (pays if you die), credit
health or disability (pays if you get sick or become disabled) and credit
unemployment insurance (pays if you involuntarily lose your job). Usually
offered with credit cards, auto loans and mortgages.

22. credit life insurance
Term life insurance issued through a lender or lending agency to cover
payment of a loan, installment purchase or other obligation, in case of death.

23. current assumption whole life insurance
A variation of universal life insurance, this product involves fixed premiums
and fixed death benefits. Its cash value growth depends on market
conditions. If they are favorable and if premiums paid in the policy's first year
are large enough, premiums for one or more years may be reduced to zero.

Terminology from words BBB

1. beneficiary
The person or financial instrument (for example, a trust fund), named in the
policy as the recipient of insurance money in the event of the policyholder's
death.

2. benefit
Amount payable by the insurance company to a claimant, assignee, or
beneficiary when the insured suffers a loss.

3. binding receipt
A receipt given for the payment which accompanies an application for
insurance. If the policy is approved, the payment "binds" the company to
make the policy effective from date of receipt.

4. blanket contract
Contract for health insurance that coves a class of persons. It is used for
groups such as athletic teams and for employee travel.

5. blanket medical expense
A provision that entitles the insured person to collect up to a maximum for all
hospital and medical expenses, without limitations on specific types of
medical expenses.

6. blue cross
Nonprofit corporation providing protection to its members against the cost of
hospital care in a limited geographic area.

7. blue shield
Nonprofit corporation providing protection to its members against the cost of
surgery and other items of medical care in a limited geographic area.

8. broker
A sales and service representative who handles insurance for clients,
generally selling insurance of various kinds and for several companies.
Brokers resemble agents, except for the fact that, in a legal sense, brokers
represent the party seeking insurance rather than the insurance company.
See Agent, Producer.

9. business insurance
A policy that provides coverage to a business. It is often purchased to
indemnify a business for the loss of services if a key employee (such as a
partner) becomes disabled.

10. business life insurance
Life insurance purchased by a business enterprise on the life of a member of
the firm. It is often bought by partnerships to protect the surviving partners
against loss caused by the death of a partner, or by a corporation to
reimburse it for loss caused by the death of a key employee. (Also known as
key person insurance.)