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
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.
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
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
Appraisal A professional,
formal, written estimation of the value of property
or other items.
over time in the value of an asset such as a stock,
bond, commodity, or real estate.
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.
and assets exposed to the danger of loss.
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.
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.
request by an insured for the insurance company to cover
an incurred loss, usually submitted on the company’s
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
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.
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.
insurer’s refusal to insure an individual after careful
evaluation of the application for insurance and any
other relevant factors.
amount that must be paid out of pocket by the insured
for covered losses before the insurance company pays
Dependent An individual
for whom that is under the financial support of another
person regardless of where they live.
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
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
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
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.
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.
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.
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
Amount The amount of death
benefit coverage that is purchased under a life insurance
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.
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
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.
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.
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
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.
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.
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
A claim on the assets of a company
or individual to satisfy a debt.
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
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.
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.
insurance coverage for damage or destruction of a ship’s
hull and cargo as a result of the occurrence of an insured
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
Named Perils Coverage
Insurance contract under which covered perils are listed
and benefits for a covered loss are paid to the policyholder.
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.
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
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.
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.
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.
payment required for an insurance policy to remain
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
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.
A statement by an insurer of the
premium he will require for a particular insurance.
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
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
Self Insurance Protecting
against losses by setting aside your own money instead
of using conventional insurance.
Disposition of a claim
or policy benefit.
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.
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.
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.
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).
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.