A


Accidental Death Insurance Insurance that provides coverage in the event of death due to accidental injuries, but not illness. In the event of death, payment is made to the insured’s beneficiary. If bodily injury occurs (e.g., the loss of a limb), the insured receives a sum specified by the contract. This coverage is usually used in combination with dismemberment insurance.

Actual Cash Value A common clause in property insurance contracts that determines the coverage amount based on the fair market value of an item at the time it was damaged, stolen, or destroyed.

Actuary A specialist in the mathematics of risk, especially as it relates to insurance calculations such as expectancy, premiums, dividends, and annuity rates.

Adjuster Individual employed by a property/casualty insurance company to settle claims brought by insureds. The adjuster evaluates each claim and then makes recommendations to the insurance company.

All-Risk A type of insurance that covers losses resulting from each and every peril, except for those specifically excluded by the policy.

Annuity A contract sold by life insurance companies that offers tax-deferred accumulation of earnings and various distribution options such as partial withdrawals, full surrender or a guaranteed income called annuitization. An annuitization option is one that pays a fixed or variable payment to the contract owner, either for a fixed number of years or for life.

Appraisal A professional, formal, written estimation of the value of property or other items.

Appreciation
Increase over time in the value of an asset such as a stock, bond, commodity, or real estate.

Assets Property owned by a business, institution, or individual, such as cash, investments, personal property, real estate, and ownership in a business, that has a present market value or worth.

At-Risk Property and assets exposed to the danger of loss.

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B

Beneficiary An individual designated in a will to receive an inheritance, or the individual designated to receive the proceeds of an insurance policy, retirement account, trust, or other asset.

Benefit Period The period of time benefits are received based on a contractual agreement. The term is commonly used to refer to health or disability benefits.

Bodily Injury Liability Coverage Part of a standard motor insurance policy that covers you (up to the policy limits) for losses that result when you inflict bodily injuries on others. Covered losses generally include medical expenses. This coverage is mandatory in Lebanon.

Broker: One who advises persons on their insurance needs and negotiates insurances on their behalf with insurers, exercising professional care and skill in so doing.

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C

Cash Surrender Value The amount that is available to the owner if a life insurance policy is surrendered. The amount represents the cash value minus surrender charges and any outstanding loans due upon cancellation of the policy.

Cash Value The cash within a permanent life insurance policy. Cash value is the premium paid less the cost of insurance policy. Cash value is also adjusted by any investment performance within the insurance policy.
Casualty Liability or loss resulting from an accident.


Claim Written request by an insured for the insurance company to cover an incurred loss, usually submitted on the company’s standard forms.

Claimant One who submits a claim for an incurred loss.

Collision coverage refers to the part of an automobile insurance policy that covers damage to a vehicle caused by an impact with another vehicle or object or a rollover.

Common Policy Provisions Words, sentences, and paragraphs in an insurance policy that generally take the form of clauses that govern the policy and that set forth the rights and obligations of both insured and insurer under the policy. Common policy provisions for a life insurance policy include the suicide clause, the incontestable clause, and the beneficiary clause.

Comprehensive Coverage Comprehensive coverage refers to the part of an automobile insurance policy that covers damages to the insured’s vehicle caused by miscellaneous hazards such as fire, theft, explosion, or other perils. (Better known in Lebanon as an Motor All Risks)

Contestability Period Period of time, generally two years, during which an insurance company can declare a life insurance contract void because of misrepresentation or concealment by the insured in obtaining the policy. Once this period has elapsed, the company cannot cancel the policy or refuse to pay claims for any reason other than nonpayment of premiums.

Covered Expenses In health insurance, reimbursement for an insured’s medically-related expenses, including, but not limited to surgery, medicines, hospitalization, ambulance service, and X-rays.
Credit Insurance Insurance issued to creditors as protection against losses on outstanding loans due to the death or disability of the debtor.

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D

Death Benefit The amount payable, as stated in a life insurance policy, to the designated beneficiary(ies) upon the death of the insured. The amount paid is the face value, plus any riders, less any outstanding loans.

Declarations Page The section of a property and casualty insurance contract containing such information as the name, description, and location of insured property; the name and address of the insured; the period for which the policy is in force; premiums payable; and the amount of coverage.

Declination An insurer’s refusal to insure an individual after careful evaluation of the application for insurance and any other relevant factors.

Deductible The amount that must be paid out of pocket by the insured for covered losses before the insurance company pays a claim.

Dependent An individual for whom that is under the financial support of another person regardless of where they live.

Deposit Premium;The premium deposit paid by a prospective policyholder when an application is made for an insurance policy. It is usually equal to at least the first month's estimated premium and is applied toward the total policy premium when billed.

Depreciation Loss in value through time (Applicable to machinery, equipment, etc...)

Difference in Conditions Insurance (DIC) "All-risks" policy that covers other perils not insured by basic property insurance contracts, supplemental to and excluding the coverage provided by underlying contracts.

Disability
A physical or mental impairment that substantially limits one or more of an individual’s major life activities. Disability may be partial or total.

Disability Income Rider Addition to a life insurance policy stating that when an insured becomes disabled for at least a certain number months, premiums are waived. Depending on the rider, the insured may also begin to receive monthly income payments from the policy.

Disability Insurance Also known as disability income insurance, this type of policy provides income benefits to the insured if he or she becomes ill or is injured and can no longer work.

Disappearing Deductible Deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases, so that small claims are not paid but large losses are paid in full.

Dismemberment Insurance A form of health insurance that provides payment when the insured loses one or more limbs, or the sight in one or both eyes. This coverage is usually issued in combination with accidental death insurance.

Double Indemnity Also called an accidental death benefit, a life insurance policy provision that doubles payment of a designated death benefit when death results from certain specified causes (usually certain types of accidents).

Duplication of Benefits Overlapping or identical medical insurance coverage under two or more separate health plans.

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E

Endorsement A written agreement attached to an insurance policy to add or subtract coverage. Once attached, the endorsement takes precedence over the original terms of the policy.

Exclusions Items that are specifically denied coverage under the terms of an insurance policy. For example, most property/casualty contracts exclude coverage for normal wear and tear. You can often purchase additional coverage to override one or more exclusions.

Extended Coverage An endorsement added to an insurance policy, or a clause included in the policy, to provide additional coverage for risks other than those covered under the basic policy provisions.

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F


Face Amount The amount of death benefit coverage that is purchased under a life insurance policy.

Fixed Annuity A type of annuity that guarantees your principal and provides an investment return at least equal to a specified fixed rate until you annuitize. In addition, the amount of your payout can be fixed once you begin receiving distributions from the annuity.

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G


Grace Period A period of time in most loan contracts and insurance policies during which default or cancellation will not occur even though payment is due. This term also refers to the number of days between when a credit card bill is sent and when the payment is due without incurring interest charges.

Group Insurance An insurance contract that covers a group of individuals who are affiliated in some way, either through an employer, trade association, or other organization.

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H

Hazard A circumstance that increases the likelihood or probable severity of a loss. For example, an unattended lit cigarette is a hazard that increases the likelihood of a fire.

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I

Indemnity The principle upon which all property/casualty insurance contracts are based. According to this principle, the objective of insurance is to restore the insured to the same financial position after a loss that he/she was in prior to the loss.

Indirect Loss
A loss that arises from a peril, but is not directly and immediately caused by it.

Individual Policy An insurance policy (life, health, etc...) that provides coverage for an individual person (and, in some cases, his/her family members), as opposed to a group policy that provides coverage for a group of individuals.

Inland Marine Insurance
A form of property-casualty insurance that covers portable property and goods in transit over land, extending the coverage that is provided by Marine insurance.

Installment Payments A sale made with the agreement that the purchased goods or services will be paid for in fractional amounts over a specified period of time.

Insurable An individual applicant who qualifies for an insurance policy based on the coverage standards that are set by the insurance company.

Insurable Interest A relationship between an insured person or property and the potential beneficiary of the insurance. This requirement must be present at the time the life insurance policy is applied for but doesn’t need to exist at the time of the insured’s death. Insurable interest exists because there is a reasonable expectation that the beneficiary will benefit from the continued life of the insured, or experience a loss at the death of the insured.

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K

Key Person Insurance Insurance designed to pay benefits to a business that loses the essential services of a key employee due to disability or death, and the business suffers a financial loss as a result.

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L

Liabilities Liability insurance Life Annuity Life Expectancy Life Expectancy Tables Life Insurance Life Insurance Underwriting Limitations Long-Term Care Insurance Long-term Disability Insurance Loss of Income Loss of Use

Liabilities A claim on the assets of a company or individual to satisfy a debt.

Liability insurance Coverage for sums that an insured becomes legally obligated to pay because of bodily injuries and/or property damage or financial losses caused to other people.

Life Annuity An annuity that makes regular (e.g., monthly, quarterly, etc.) income payments for the life of a person (the annuitant). The annuitant cannot outlive the payments. Upon his/her death, however, all income payments cease and there are no beneficiary benefits.

Life Expectancy The number of years a person is expected to live as determined by actuaries using mortality (actuarial) tables

Life Expectancy Tables Mortality tables that are used to calculate life expectancy figures.

Life Insurance A legal contract between an insurance company and an owner/insured to provide protection against adverse financial consequences of the death of an individual in the form of payment to a beneficiary.

Life Insurance Underwriting The process by which an insurance company examines, accepts, or rejects insurance risks so as to charge the proper premium for the coverage and to spread the risk among a pool of insureds in a manner that is both fair to the insureds and profitable for the company. The company classifies the accepted applicants into different risk categories in order to charge the proper premium.

Limitations The maximum amount of insurance coverage that is available under a policy. Coverage limitations can often be increased for an additional premium.

Long-Term Care Insurance An insurance contract that pays benefits in the event the insured needs long-term medical care in a facility other than a hospital.

Long-term Disability Insurance A disability insurance policy that provides coverage in the form of monthly income payments for as long as the insured remains disabled.

Loss of Use Optional Part of a policy that covers financial losses (up to a certain limit) you suffer when your home or other insured property is damaged and temporarily unfit to live in or use. These losses generally refer to living expenses (e.g., hotel, dining, telephone) that you must incur in order to maintain your usual standard of living until you move back into your house.

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M

Marine Insurance Property-casualty insurance coverage for damage or destruction of a ship’s hull and cargo as a result of the occurrence of an insured peril.

Mortality (Actuarial) Table A statistical table showing the rate of death at each age in terms of the number of deaths per thousand, indicating the probability of a certain number of people from a group dying in a given year. Insurance companies use mortality (actuarial) tables to establish premiums for different age groups, to base life estates, and annuity valuations.

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N

Named Perils Coverage Insurance contract under which covered perils are listed and benefits for a covered loss are paid to the policyholder.

Negligence: The omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. It consists in a failure to exercise due care in a case in which a duty to take good care exists. It is a tort giving rise to civil liability.

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O

Occupational Disease An illness contracted as a result of employment-related exposures and conditions. Coverage for these situations is provided through workers compensation policies.

Occupational Hazard Condition surrounding a work environment that increases the probability of death, illness, or disability to a worker. This type of hazard is considered when evaluating an application for insurance.

Own Occupation A term for a disability policy that provides benefits when the insured is unable to perform the usual and customary duties of one's own occupation.

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P

Partial Disability Inability of the insured to perform one or more of the important daily duties of his or her regular occupation. The income payment to the insured is reduced from that of total disability.

Peril A specific cause of loss. Common examples include fire, flood, earthquake, vandalism, and theft.

Permanent and Total Disability A disability in which a wage earner is forever prevented from working because of injury or illness suffered.

Personal Property For homeowners insurance purposes, this term generally includes all the contents of your household (e.g., furniture, jewelry, etc.).

Policy Period Time period during which an insurance policy is in force.

Preexisting Condition An illness or medical condition for which a person was treated or advised within a specified time period before applying for an insurance policy. A preexisting condition can result in the cancellation of the policy if it is not disclosed up front.

Premium The payment required for an insurance policy to remain in force.

Provisions Words, sentences, and paragraphs in an insurance contract that specify the terms and limitations of the policy as well as the rights and obligations of the insured and the insurer.

Proximate Cause In property/casualty insurance, the cause of a loss whereby that cause, the loss itself, and all intervening events form an unbroken chain.

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Q

Quotation: A statement by an insurer of the premium he will require for a particular insurance.

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R

Recurrent Disability A disability that recurs or comes back again after disappearing the first time. Disability policies may not pay income benefits for a recurrent disability unless it meets the provisions of the policy.

Replacement Cost The cost of replacing or repairing lost or damaged property without allowing for depreciation in value or considering the market value.

Residual Value The expected value of an asset at the end of a specified period, such as the value of a car at the end of the lease.

Rider A provision attached to a policy that adds benefits not found in the original policy or that changes the original policy.

Risk Management Procedures to minimize the adverse effect of a possible financial loss by identifying potential sources of loss, measuring the financial consequences of a loss occurring, and using controls to minimize actual losses or their financial consequences.

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S

Self Insurance Protecting against losses by setting aside your own money instead of using conventional insurance.

Settlement Disposition of a claim or policy benefit.

Subrogation The legal process by which an insurance company, after paying for a loss, seeks to recover the amount of the loss from another party who is legally liable.

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T

Temporary Disability A disability that is expected to last no more than one year.

Term Life Insurance A form of life insurance which provides coverage for a specified period of time and does not build cash value.

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U

Underwriting The process an insurance company uses to evaluate the risk presented by an applicant and to calculate an appropriate premium.

Universal Life Insurance A form of permanent cash value life insurance that provides both life insurance protection and a savings component, plus an additional return when the insurance company’s investments perform well. Other key features include the ability to adjust both your premium payments and the amount of your insurance coverage.

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W

Wages declaration: A return by an insured of wages paid during a period of insurance, for the purpose of calculation of the appropriate premium (mainly in workmen compensation insurance).

Waiting Period: A period elapsing after the inception of an insurance during which, if the event insured against occurs, the insurers will be under no liability for its occurrence.

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