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accidental death benefit rider (ADB rider)
A supplementary rider that grants an additional amount of money to the
normal death benefit in a life insurance policy. This is payable only if
the death is the result of an accident.
accidental death and dismemberment rider (AD&D rider)
A supplementary rider that grants an additional amount of money to the
normal death benefit in a life insurance policy. This is payable only if
death is the result of an accident, or if the insured loses two or more
limbs or eyesight as the result of an accident. Partial payments are
sometimes made for the loss of one limb or partial eyesight loss.
A classification used to evaluate types of danger (perils) in a
certain occupation. These may include use of dangerous machinery, risk of
falling, or other hazards.
The amount of benefit that has accumulated for a particular member of
a benefit pension plan at a given time.
accumulated funding deficiency
The amount of money by which a pension plan falls below the minimum
required funding, according to federal or state laws. Also called a funding
Total value of money invested, including all interest earned.
An insurance policy dividend option in which dividends are kept on
deposit with the insurer to accumulate interest.
accumulation unitsvariable annuity
(premiums paid are credited as accumulation units, which are used to buy
Ownership shares in a
actively at work provision
An insurance provision stating that if an employee is not at work on
the day on which coverage begins, the start of coverage is delayed until
the employee returns to work.
Assumptions that actuaries make in regard to earnings, mortality,
turnover, interest, and other areas necessary for calculating premium
actuarial cost method
The method of calculating annual contributions by the plan sponsor in
order to meet the designated benefits of a pension plan.
The department in an insurance company responsible for statistically
calculating risk, premium rates, life expectancies, etc., and doing
research to develop the necessary statistics.
The valuation of a plan by an actuary to determine if assets are
sufficient to meet any payouts.
An expert in the technical aspects of insurance, such as calculating
mortality rates, premium rates, and other important values.
adjustable life insurance
Life insurance in which the policyholder can change the amount of
coverage or premium. If this is done, the plan switches to another one
with the desired attributes.
who is licensed to operate in a specific area.
The right of a doctor to admit patients to a particular hospital or
The agreement between principal and agent that defines the agent's
duties and authority.
agency by appointment
An agency relationship in which a principal appoints an agent to act
on the principal's behalf.
agency by ratification
An agency relationship in which the principal ratifies an agent's
A relationship in which an agent is authorized to perform certain acts
on behalf of a principal.
An insurance-company representative licensed by the state who
solicits, negotiates, or effects contracts of insurance, and services the
policyholders for the insurer.
A portion of the insurance application in which the agent lists any
knowledge or opinions concerning the applicant not otherwise revealed on
age of majority
The age at which an individual can legally enter into a contract.
aggregate funding methods
Funding method in which the necessary amount of contributions is
calculated for all participants, instead of separately for each individual
aggregate mortality table
A mortality table based on all insured lives over time.
A deductible that must be met only once during a set period of time,
such as a calendar year.
Funding method in which a portion of the total plan's funds are
allocated to individual participants.
A person receiving or entitled to receive an annuity.
A series of payments made on a regular schedule. There are many types
of annuities, such as whole life annuity in which the payments are
received for the life of the payee.
An annuity that is made regardless of whether or not the payee dies.
The period of time between annuity payments.
Ownership shares in a variable annuity.
Authority that a third party believes an agent to possess due to the
actions, intentional or not, of the principal that the principal did not
expressly grant to the agent.
The initial forms used when applying for insurance.
The party to whom contractual rights are transferred in an assignment.
The transfer of ownership rights in a contract from one party or
person to another.
assignment of benefits
The transfer of benefits to another. This could be used to pay a
physician directly, instead of having the insurance company pay the
policyholder, who will then pay the physician.
The person or party who transfers the contractual rights in an
Reinsurance in which the transfer is permanent and the ceding company
is no longer a party of the insurance agreement.
attending physician's statement
A statement from the physician who treated or is treating the insured
or the applicant.
automatic dividend option
The insurance dividend used if the policyholder does not select
average indexed monthly earnings
The figures used to calculate Social Security and other governmental
benefits. It is an average of earnings on which Social Security tax has
been paid, adjusted for inflation.
An insurance provision stating that death benefits are not payable if
the death occurs as a result of aviation activities.
Listing the effective date as being prior to the application date, in
order to lower premium rates.
Grouping insurance policies according to death-benefit amounts.
basic death benefit
The death benefit as originally listed, excluding any supplementary
riders or provisions.
Insurance coverage for inpatient care (in a hospital or other medical
The individual or party designated to receive policy proceeds.
benefit of survivorship
Annuity payments will continue as long as the recipient is alive.
In a group insurance plan, a schedule that lists coverage amounts
provided to each class of insured individuals.
Payments made by an insurance company when an insurance claim is
approved, such as at time of death, retirement, or disability.
A temporary agreement that provides coverage until a policy is written
binding premium receipt
Initial premium receipt in which coverage is immediately effective but
only lasts until a decision is made on the insurance application.
When both parents have insurance, benefits for dependent children are
paid by the plan of the parent whose birthday occurs first in the year.
Mortality rates based on a combination of experience rates and manual
Blue Cross plan
Hospital-expense plan operated in conjunction with a nonprofit
Blue Shield plan
Physician-expense plan operated in conjunction with a nonprofit
break in service
Amount of time between leaving a company and returning to work at the
same company; used in calculating benefits in regard to leaves of absence,
short-term disability, and other extended periods of unemployment.
An individual or organization that is licensed by the state and seeks
insurance on behalf of a customer. Brokers do not work with a single
entity but can work with multiple insurance companies or customers.
brokerage distribution system
A system of selling insurance that uses commissioned brokers.
bundled insurance product
An insurance policy in which the factors used to determine premium and
cash values are not identified separately.
Insurance designed to serve business needs rather than individual
business continuation insurance
Insurance designed to allow remaining partners or shareholders to
purchase the portion of the company owned by a deceased partner or owner.
A publication that provides information to consumers concerning life
insurance. In some states, it is required by law that the insurance
company supply a copy to all applicants.
cafeteria planflexible benefits plan.
An insurance policy that can be terminated at any time by the insurer.
Termination of an insurance policy or coverage while the policy is
still in effect.
The largest amount of insurance the insurer will underwrite.
The preset limit paid to a health-maintenance organization (HMO). The
amount of service used is irrelevant.
An agent who works full-time out of the insurance company's field
office instead of being an independent contractor who has an agreement to
do business with the insurance company.
career average benefit formula
Formula by which retirement benefits are calculated, based upon
compensation for the entire amount of time in the plan.
A provision stating that expenses incurred at the end of a benefit
period, usually the last three months of the year, that apply to the
deductible may also be used to cover the next period's deductible. This
protects the insured from having to pay a double deductible simply because
an injury or illness occurred at the end of a period.
A system used to ensure that individuals receive appropriate
healthcare services at a reasonable cost. It can be used to identify
alternate, cheaper treatment methods that do not sacrifice the quality of
care. Also called claim management.
cash-balance pension plan
A pension plan in which the amount each participant has accrued
(contributions and interest) is listed, and in which, upon retirement, the
participant may remove the entire amount in a lump sum, assuming it is
Cash or Deferred Arrangement (CODA)Section 401(k) Plan.
An option in life-insurance plans in which dividends are paid in cash
to the policyholder.
An insurance option that states that if any proceeds remain after the
death of the beneficiary, the balance of the benefits will be paid to the
contingent payee in a lump sum.
cash surrender value
The amount of money due the policyholder if the policy is surrendered
to the insurance company.
cash surrender value option
An option allowing the policyholder to discontinue premiums and
surrender the policy, receiving the cash surrender value.
The amount of money due the policyholder if the insurance policy is
lapsed or cancelled.
In a reinsurance deal, the original insurer who purchases reinsurance.
A payment that will be made regardless of circumstances.
certificate of indebtedness
A certificate given to the beneficiary of an insurance policy, stating
the minimum interest rate and frequency of payments under the interest
certificate of insurance
A certificate specifying the type and amount of insurance coverage as
well as the beneficiary.
The portion of insurance that is ceded to a reinsurer.
A provision stating that the policy will not become effective unless
all conditions in the application are still true and valid at the
time the policy is delivered.
change of occupation provision
A provision allowing the insurance company to change benefits or
premiums if the insured changes occupations.
A request by the insured or someone connected with the insured
(healthcare provider) for the insurance company to pay for the loss
claim administration department
The department in an insurance company that processes claims.
An employee of the insurance company who examines all claims for
validity, and approves or denies payment accordingly.
claim frequency rate
The percentage of insureds who file claims, or the number of claims
filed over a set period; this is used to calculate premiums.
claim managementcase management.
The individual or party requesting payment of benefits according to
the insurance policy.
class beneficiary designation
The beneficiary is designated as a group instead of naming each person
separately, such as children.
A life insurance benefit used to pay expenses and outstanding debts,
in case of death.
The process of finalizing the purchase of insurance or other financial
products, by having the purchaser read and sign the final documents as
well as any other legal details.
COBRA (The Consolidate Omnibus Budget Reconciliation Act of 1985)
Federal law that requires companies with 20 or more employees to offer
individuals who would otherwise lose their insurance coverage (i.e.,
through termination) the option to continue their group healthcare
coverage. Also, some states require that smaller companies, with as few as
two employees, offer the ability to extend their coverage.
CODA (Cash or Deferred Arrangement)Section 401(k) Plan.
The percentage of expenses that the policyholder must pay after the
deductible has been paid in full. In some cases, a co-payment is used
A provision requiring the insured to pay coinsurance on certain
COLA (cost-of-living adjustment)
Increases in benefits based on increases in the cost of living.
A clause in disability insurance stating when the definition of total
disability changes from the inability to perform the current
occupation to the inability to perform any occupation.
A pension plan in which part of the funding is allocated and part is
not; the unallocated portion is placed in a conversion fund for later use.
The fee, generally a percentage of the premium amount, paid to an
insurance agent for selling a policy.
A provision within insurance policies stating that if two or more
members of a family are injured in a single accident, they pay a single
deductible between them, instead of the separate deductibles.
An insurance provision requiring the beneficiary to survive the
insured by a certain length of time in order to receive the policy
Using the same premium rates for a specific group without considering
comprehensive major-medical insurance
Health insurance that includes the benefits of a major-medical policy
and a hospital-expense policy.
conditionally renewable policy
An insurance policy that the insurer can refuse to renew for
Certificate provided to a beneficiary, stating the amount of insurance
proceeds, current interest rate, and other account information.
The attempt by an insurance company to prevent policies from lapsing.
Consolidated Omnibus Budget Reconciliation Act of 1985COBRA.
A report on an individual's credit history or other personal
information; regulated under the Fair Credit Reporting Act.
A company that generates consumer reports.
The length of time during which an insurer can challenge the validity
of an insurance policy.
Events that affect risk that may or may not occur.
contingent beneficiarysecondary beneficiary.
A payment made only if a certain condition is met.
continuous premium life insurancestraight-life insurance.
contract of adhesion
An agreement prepared by one side, which is either accepted or
rejected by the other side. There is no bargaining.
Maximum legal limit on any contribution to an employee benefit
contributory group insurance
Group plans in which the insured individuals pay a portion of the
Any plan in which the participants pay a portion of the cost.
The right to convert from group to individual coverage; this generally
occurs when the person in question leaves the group that was supplying
convertible term insurance
Term insurance that may be converted to whole life insurance by the
policyholder without having to update or show new evidence of
A provision in insurance policies stating benefits will not be paid if
another insurance policy has already covered the expenses.
Similar to coinsurance in that the policyholder must pay a portion of
the expenses in the form of a flat fee, such as a set co-payment for
The consideration given to actual claim experience in determining
future claims or dividends.
credit life insurance
Insurance meant to pay off a loan if the insured dies before it is
The monitoring of the insured's treatment while in a hospital or other
medical facility to determine if continued care is necessary.
current settlement option rates
Settlement option rates based on interest rates currently earned by
the insurance company.
A change to a plan that reduces benefits or contributions.
The amount of money paid to the beneficiary upon the death of the
A refusal by an insurance company to grant insurance coverage.
decreasing term insurance
Insurance in which the amount of coverage decreases during the term of
A reduction in the number of participants in an employee-benefits
The amount of covered expenses the insured must pay before any
benefits are received from the insurance company.
A date occurring after the normal premium due date (generally on the
one-year anniversary of issue) when the premiums for the next year are
An annuity in which the initial payment is postponed.
deferred compensation plan
A compensation plan in which benefits, such as retirement benefits,
are paid at a later time.
Premiums that are deferred until a date later than the normal due date
(generally the one-year anniversary of issue).
defined benefit formula
A formula used to determine the benefits due each participant in a
defined benefit plan.
defined benefit plan
A group benefits plan that pays benefits based on a prespecified
defined contribution formula
A formula used to determine the amount of contributions made toward a
group benefits plan
defined contribution plan
A group benefits plan in which the amount of employer contributions
made is defined according to a set formula.
denial of claim
Refusal by an insurance company to pay for services obtained, such as
a hospital visit.
An individual who relies on someone else for support.
dependent life insurance
Life insurance covering dependents of the primary insured.
deposit term insurance
A form of insurance with much larger premiums the first year than in
A premium rate that is above the prima facie rate.
diagnostic related groups
A payment system in which benefit payments are based on the individual
diagnosis of a patient instead of the actual medical service
direct response marketing
A way in which insurance carriers sell directly to the customer
without using insurance agents, generally through direct mail, telephone,
or media advertisements such as television commercials.
Inability to work due to an injury or sickness.
Benefits paid while the insured is disabled.
disability income insurance
Insurance that provides a percentage of regular income to an
individual who has become disabled and is unable to work.
disabled life annuity
An annuity paid as long as an individual is still alive and disabled.
Removal of an intermediary in order to earn higher profits, such as an
insurance carrier selling directly to the customers without using
independent insurance agents.
A payment made to an insured by the insurance company that reflects
The accumulation of funds when the policyholder leaves dividends on
deposit with the insurer; often done to increase interest earnings from
the insurer's investments.
The options policyholders have in selecting how they will receive
their shares of dividends from the insurance company.
doctrine of reasonable expectations
Court rulings stating that the reasonable expectations of
policyholders and their beneficiaries will be honored even if the
insurance policy does not support them. These serve to eliminate
fine-print clauses that alter the meaning of the policy from what the
insured was lead to believe.
A doubling of the basic death benefit if the insured's death is
precipitated in a certain manner, most often through an accident.
Evidence that the insured is suffering from alcohol or drug abuse.
early retirement ageAn age earlier than the normal
retirement age at which time the participant can receive benefits. such as
pension benefits, although they may be reduced.
A 60-day period following notification of an insured's eligibility for
COBRA continuation coverage, during which the individual can accept or
decline the coverage.
For group health insurance, the period of time in which a new employee
may enroll in the group coverage.
Requirements for joining a group health-insurance plan or another
employee assistance programs
Employee counseling services that are often fully confidential and can
cover a wide range of mental-health issues.
Employee Retirement Income Security Act of 1974ERISA.
A method of changing the beneficiary of an insurance policy in which
the policyholder notifies the insurance company and an endorsement is
added to the policy.
enhancement type policy
Life insurance in which a portion of the dividends paid for term
insurance guarantee a preset total death benefit.
An actuary who is a member of the Joint Board for the Enrollment of
Actuaries, a federal agency.
entire contract provision
An insurance provision stating that the policy itself and any
attachments are the whole agreement between the policyholder and the
insurance company; nothing else is relevant.
EPO (Exclusive Provider Organization)
A health system in which any physician within the contracted network can
be visited without prior approval or referrals by the insurance company or
a primary-care physician. No services received outside the network,
however, are covered.
Equity-based insurance product
Insurance in which the benefit levels are based on a portfolio of
equity investments and may change over time depending on the performance
of the investments.
Pensions in which the benefit levels are based on a portfolio of
equity investments and may change over time depending on the performance
of the investments.
equivalent single payment
A single payment that replaces others of equal combined value.
A suicide in which there is doubt as to the intention of the deceased
ERISA (Employee Retirement Income Security Act of 1974)
A federal law guaranteeing the rights of pension plan members, rules
and standards for investing pension plan assets, and requirements for
disclosing plan funding and provisions.
error and omissions insurance
Insurance that protects the insured from injurious actions,
such as negligence, by an agent.
evidence of insurability
Evidence that an individual's risk falls within an insurable range.
Interest paid above the guaranteed amount during a settlement.
A program permitting the insured to replace one policy with another
one without having to show new or updated evidence of insurability.
Specific conditions, causes, or issues listed in the policy that are
not covered by an insurance policy.
Exclusive Provider OrganizationEPO.
Statutes that prevent the insurance company from incurring liability
in cases in which a conflict in policy claims has arisen after the
insurance company has paid the claims to a party in good faith.
The use of a group's history of premiums and claims to calculate
premium rates. (A history of high claims, for example, could result in
increased premium costs.)
A refund of premiums when the claims experience proves to be superior
to that used when the premium was calculated.
The date when an insurance policy ends.
The authority a principal explicitly grants an agent.
face amountIn a life-insurance policy, the
amount to be paid to the listed beneficiary upon the death of the insured.
An underwriting tool used to determine net worth through the practice
of multiplying annual income by various factors to find the maximum amount
of insurance available.
Fair Credit Reporting ActFCRA.
A single group deductible covering all insurance policies within a
family instead of multiple separate deductibles.
family insurance policy
A single life-insurance policy that covers all members of a family.
federally qualified HMO
An HMO that meets the requirements of the Health Maintenance
Organization Act of 1973. Under the law, these HMOs receive advantages,
such as eligibility for federal loans.
FCRA (Fair Credit Reporting Act)
Federal law requiring consumer-reporting agencies to be impartial and
maintain the consumer's right to privacy.
fee for serviceindemnity.
A list of dollar amounts paid for certain procedures.
fee schedule basis
Compensation plans in which physicians or health-service organizations
are paid a set amount per service, according to a fee schedule.
A person or organization that manages or controls money or financial
assets belonging to others, or that offers financial advice for a fee.
A local sales office.
final average benefit formula
Formula by which retirement benefits are calculated, based on an
average of the last few years of employment.
Any organization, such as a bank or insurance company, that accepts
and pays out money in a situation in which fees or interest are
paid for the use of money.
A lump sum paid to the insured that ends the insurer's
responsibilities under the policy.
Insurance coverage for losses resulting from fire.
Commission paid to an insurance agent based on the amount of the
premium the first year the policy is in effect.
An insurance settlement option in which the beneficiary is paid in
installments until the proceeds from the policy and any interest run out.
An insurance settlement option in which the beneficiary is paid in a
series of payments instead of a single payment.
flat amount formula
A method of determining benefits by which all participants receive a
flat, periodic benefit amount, such as $1,000 a month.
flat percentage of earnings formula
A method of determining benefits by which participants receive a
percentage of pre-retirement compensation, or in the case of disability,
flexible benefits plan
An employee benefits plan in which the employees have several options
as to the type or amount of benefits. Also called a cafeteria plan.
The reasonable expectation that an injury or harm will occur to the
The unvested portion of a pension or other financial plan that remains
after a participant withdraws from the plan.
Premiums that are paid in installments through the year rather than in
total once a year.
A claim in which the claimant knowingly uses false information in
order to collect on the policy.
free examination period
The period of time during which the policyholder can return the policy
for a full refund of any premium paid.
Health insurance plan that pays the full cost, provided it qualifies
as reasonable and customary.
A situation in which the insured individual in a group plan pays the
entire cost of the insurance.
The group that holds the assets (money) of a pension plan or other
funding deficiencyaccumulated funding deficiency.
The prospective service an employee will give to the employer
following entrance into a pension plan until the normal date or
Benefits provided in exchange for service in the future.
GAAP (generally accepted accounting principles)Accounting principles used by the
majority of companies in the United States.
generally accepted accounting principlesGAAP.
A provision stating that the insurance policy is void if the applicant
was not in good health at the time the policy was signed or delivered.
The period of time after a premium due date has passed during which
the policy remains active even though payment has yet to be made.
graded premium whole life insurance
Whole life insurance in which premiums increase at specified times
until they reach a preset maximum level where they then remain.
The total amount the policyholder pays for insurance, including
premiums and any additional expenses.
group deferred annuity
An annuity plan in which deferred annuities are purchased to provide
retirement benefits for the participants of the group plan.
An insurance contract that provides coverage to a group.
guaranteed issue limit
The maximum amount for which an insurance company will insure an
individual without receiving information concerning their insurability;
used in group insurance.
An addendum to an insurance policy that allows the policyholder to
purchase additional insurance at a preset rate at preset times without
having to show updated evidence of insurability.
Group insurance in which all members of the group who meet certain
conditions automatically receive coverage without individual underwriting.
An insurance policy that states that the policy will continue to be
renewed for a set period of time.
An organization whose purpose is to protect policyholders in the event
an insurance company becomes insolvent.
Health-care decision counselingCounseling services that assist
people in making informed decisions concerning medical tests and
treatment; these are sometimes provided by insurance companies.
An insurance policy that protects the insured in case of illness or
injury, and that pays for the appropriate medical treatments required,
based upon limits established within the individual policies.
Health Insurance Portability and Accountability Act of 1996HIPAA.
health maintenance organizationHMO.
HIPAA (Health Insurance Portability and Accountability Act of 1996)
Federal law that protects health coverage when the insured changes or
loses a job. This is done by guaranteeing portability – defined in this
case as using previous health coverage (the coverage possessed before
leaving employment) to reduce or eliminate any preexisting-condition
exclusions that may apply under future insurance plans. This does not mean
current coverage is maintained after leaving employment, although various
state laws allow for coverage to continue on a temporary basis.
Physician's statement regarding the health history of the insured.
HMO (health maintenance organization)
An insurance plan in which individuals or their employers pay a fixed
monthly fee for service regardless of the amount of medical costs
incurred. To receive the benefits, however, the insured must use a
primary-care physician within the system for all initial treatments except
in life-threatening emergencies. Hospitals or specialists must be
recommended by the primary-care physician and be within the HMO network.
A release stating that the payee of a claim will reimburse the
insurance company if another claimant appears and successfully challenges
the initial disbursement of benefits.
Insurance covering the risks of owning a home, such as fire or
hospital confinement insurance
A form of health insurance that provides a preset benefit amount for
each day spent in a hospital, regardless of the actual medical expenses
hospital expense insurance
Health insurance that provides benefits directly connected to the cost
of hospitalization, such as surgery, outpatient care, nursing home or
convalescent care, and physician fees incurred while in a hospital.
hour of serviceERISA,
as an hour for which an employee is paid or is due to be paid.
illness perilsA classification used to evaluate
types of danger (perils) in a certain occupation, such as exposure to
poisons, chemicals, or extreme temperatures.
An annuity in which payments begin in the first period after purchase.
An aspect of health or lifestyle, including occupation, that could
A health-insurance rider limiting coverage for a specific health
Authority a principal intends for the agent to possess but that hasn't
been expressly granted.
incentive coinsurance provisions
Provisions granting incentives to perform certain acts, such as taking
preventative medicine, in order to have the insurer pay a higher
proportion of expenses.
incident of ownership
Any policy right, such as the right to assign the coverage, cancel the
policy, or change the beneficiary.
Percentage of pre-retirement income needed to maintain the same
standard of living after retirement. This is less than the pre-retirement
income, due to a decrease in taxes and other expenses after retirement.
A provision in the insurance policy that defines a time limit,
generally two years, after which the insurance company agrees not to
dispute the validity of the policy.
increasing term insurance
Term insurance in which the death benefit increases over time, either
at preset points or based a formula, such as cost of living.
An insurance health plan that allows absolute freedom in selecting
physicians or medical facilities, and, unlike other health plans,
self-referral to a specialist. A yearly deductible must be met before
coinsurance is paid by the insurance company, and coinsurance is set at a
predetermined rate in which the insurance company pays that percentage of
costs. Also called fee for service.
indexed life insurance
Life insurance in which the premium rate and death benefit both rise
annually based upon the Consumer Price Index.
Insurance issued to a single individual.
individual retirement accountIRA
The first payment for an insurance policy.
An investigative report from a consumer-reporting agency on the
insured's lifestyle, occupation, and other indicators of economic
Administrative activities that take place between the decision to
purchase an insurance policy and the issuing of the policy.
A certificate given to the beneficiary of an insurance policy stating
the benefit payment information.
installment refund option
An insurance option that states if any proceeds from a policy remain
after the beneficiary's death, they will be paid to the contingent payee
in a series of installments.
An insurance provision stating that the policy will not become
effective unless the insured is still considered insurable at the time of
A statement ascertaining if there have been changes in insurability
between the time of application and policy issue.
A valid concern for the person applying for the insurance policy that
is required by law. The insured person must suffer a loss if the event
insured against occurs.
Protection against loss in which premiums are paid in exchange for
benefits should a loss occur.
A sales representative of an insurance company.
The policyholder or party protected by the insurance policy.
The insurance company or party that provides the insurance policy.
insurer-administered group insurance plan
A group insurance plan in which the insurer handles all administrative
A deductible that can be satisfied by payments in another portion of
the plan. (For example, if a person pays the full deductible in a basic
medical plan, the deductible in the hospital plan is considered paid.)
An insurance option in which the policy proceeds are left on deposit
for a set period of time and the interest from those proceeds is paid to
the beneficiary. After the period of time has elapsed, the policy proceeds
interim insurance agreement
An agreement that provides temporary insurance for a short period of
time, such as during the period in which regular insurance is being
written. Also called temporary insurance agreements.
Surrendering one insurance policy in order to buy another one from the
Claim settlement in which the insurance company turns the proceeds
over to a court, with the understanding that the court should decide who
is the proper recipient.
investigative consumer report
A consumer report that involves interviews with knowledgeable parties
in order to gather information.
Insurance in which the benefits are based on the insurer's investment
earnings, generally with a guaranteed minimum.
involuntary plan termination
The termination of a pension plan by a party other than the plan
sponsor, generally a governmental organization.
IRA (individual retirement account)
A savings plan in which participants can make pretax deposits into an
A beneficiary who cannot be removed later by the policyholder, without
the beneficiary's consent.
A bank that sells and issues insurance policies in its own name.
joint and survivor annuityAnnuities in which payments are
made to multiple annuitants and which continue until all annuitants are
joint and survivorship option
Insurance settlement option in which payments are made to multiple
parties and continue until all parties are deceased.
joint whole-life insurance policy
A single insurance policy that covers two individuals and usually pays
the proceeds when the first insured individual dies.
juvenile insurance policy
An insurance policy on a child.
Keogh Act (Self-Employed Individuals Tax Retirement Act of 1962)A federal law allowing
self-employed individuals to save money for retirement by depositing money
in a government-approved account that is managed by a financial
institution; similar to a Section 401(k) Plan.
Insurance designed to protect a business firm against the loss of
business income resulting from the disability or death of an employee in a
lapseTermination of an insurance policy
because premiums were not paid on time.
An offer by the insurance company to accept overdue premiums, even if
past the grace period, without requiring additional applications or
paperwork in order to reinstate a lapsed policy.
Restrictions in an insurance policy concerning when a claimant may sue
to collect a disputed claim amount – the minimum waiting period before
suing is allowed and the cutoff point when it is no longer permitted.
length of stay
Amount of time spent in a hospital or other medical facility.
A commission schedule that has the same commission rate for all years
of the policy.
A deferred annuity in which equal premium payments are made over time,
such as annually, until the benefit payments are to begin.
Pricing system in which premiums remain the same for the life of the
Premiums that remain the same for the life of the policy.
level term insurance
Insurance in which the benefits remain the same over the specified
Insurance providing coverage for those who have been found to have
legal responsibility for injuring others or their property.
An annuity made for the length of the annuitant's life.
life annuity with period certain
A life annuity that will continue to pay the annuity to another person
selected by the annuitant if the annuitant should die; these payments
continue for the length of a pre-selected period.
life income option
An insurance option in which the beneficiary is paid in equal payments
for the length of the beneficiary's life.
Insurance that protects against economic loss by paying a specified
sum to beneficiaries upon the death of the insured.
Under an insurance policy, the maximum amount paid for the insured
while under the policy.
Maximum amount a policy will pay.
An insurance policy covering only specific illnesses, such as cancer.
limited-payment whole life insurance
Whole life insurance that does not require premiums to be paid during
the entire life of the insured; premiums stop at a set point, but coverage
living-benefit rider An insurance rider specifying that, under
certain circumstances such as terminal illness, the insured can take a
portion of the death benefit before death.
A benefits plan that provides a specific dollar benefit or a
percentage of expenses charged for nursing home care, home health-care,
and adult day care if a covered person suffers a loss of functional or
Disability lasting for an extended period of time as defined in the
long-term disability insurance
Insurance plans that provide income for an individual who has become
disabled and is no longer able to work. The compensation provided is
either a flat amount or based on a percentage of the regular income.
The ratio of claims to premiums (claims divided by premiums).
maintenance expensesCosts involved in maintaining a
policy, including processing, making dividend payments, and the time
customer-service personnel spend assisting policyholders.
Medical insurance covering the majority of expenses associated with
illness or injury.
A system of medical care that attempts to reduce costs while providing
quality care under the control of the insurance company. (HMOs and PPOs
are examples of managed care.)
A benefit required by state or federal law that must be included in an
Preset rates used for broad groups when there is no history concerning
a particular insured group.
The contract between an insurance company and a group-insurance
policyholder that provides insurance for more than one person.
Contributions by the employer made to an employee-benefits plan, such
as a 401(k), that match the employee contributions at a set percentage.
Any relevant fact related to underwriting decisions concerning
False statements by an applicant or policyholder that affect whether
or not the insurer will accept the risk and issue a policy.
An endowment insurance policy that is payable due to having reached
the end of its term.
The largest benefit amount available to a plan participant. IRS
regulations determine this amount.
maximum benefit period
Maximum period of time during which benefits are paid.
maximum dollar limit
Maximum amount of money that will be paid for claims during a set
period of time (one year, lifetime, etc.).
A governmental program that provides medical coverage for people under
65 who meet certain requirements.
An insurance application requiring medical tests or an examination.
Health insurance covering all or a portion of medical expenses.
A physician's report on the insured's health.
A governmental program providing medical coverage for people 65 and
over who meet certain requirements.
Supplemental medical-expense coverage providing benefits for expenses
not covered by Medicare.
minimum deposit arrangement
A system in which the policyholder can apply the initial year's cash
value of an insurance policy to the premium amount of that same year.
minimum service requirement
Requirements that employees be employed for a set amount of time
before being eligible to join a group plan.
An error in estimating the insurance premium.
False or misleading statements on the part of the insurance company or
the applicant to sway the other into accepting a policy.
A provision in an insurance policy that delineates the results if it
is learned that the insured has misstated their age in the application.
(Age is often a significant factor in the calculation of premiums and
mode of premium payment
The timing in which premiums are paid, such as monthly or annually.
modified net premiums
Net premiums that do not remain the same throughout the life of the
policy. (They are generally lower in the first year.)
modified premium life insurance
A method generally used in whole life insurance in which the premiums
for the first few years are lower than normal, and the premiums for the
years following are higher than normal.
money purchase pension plan
A pension plan in which the participant contributes a set percentage
of income. Benefits equal the contributions plus gains from investment.
monthly outstanding balance method
A method of paying the premium in monthly installments.
Risk that an applicant for insurance will intentionally lie or conceal
information that is pertinent to the policy.
Illness or disability.
The likelihood that an individual in a specific group will become ill
or suffer a disability. (This is used to determine premiums for that
A chart showing morbidity rates generally based upon age.
The difference in mortality rates related to age (often shown as a
The actual number of deaths for a particular group.
The frequency of death within a particular group.
The difference in mortality rates related to age (often shown as a
Insurance that pays the remaining mortgage on the insured's home in
case of death.
Pension or other benefits plans involving more than one employer, so
that if an employee moves to another employer in the plan, their coverage
Insurance plans that cover the employees of multiple employers.
A method of funding life insurance in which the members of a group are
each charged an equal fee upon the death of one member to cover the death
benefit. (This is rarely used now except for some fraternal orders.)
mutual insurance company
An insurance company owned by the policyholders instead of
stockholders or other individuals.
NAIC (National Association of Insurance Commissioners)An association of state insurance
commissioners established in order to create consistent insurance
National Association of Insurance Commissioners NAIC.
national brokerage houses
Independent companies that provide advice in risk management and
National Organization of Life and Health Guaranty AssociationsNOLHGA.
Analyzing the customer to determine his or her insurance needs.
The amount of money that must be collected in order to meet the
benefits to be paid.
net single premium
The amount of money that must be collected at the time of issue in
order to meet the benefits to be paid later (present value of expected
NOLHGA (National Organization of Life and Health Guaranty Associations)
An organization made up of state guaranty associations that provides
information and resolves issues resulting from the insolvency of insurers
licensed in multiple states.
who is not licensed to operate in a specific area.
noncancellable and guaranteed-renewable policy
An insurance policy in which the insurance company can neither raise
premiums nor terminate the policy.
noncontributory group insurance
Group insurance in which the entire premium is paid by the group
policyholder, and participants pay no portion of the insurance premium.
A plan in which all contributions are made by the sponsor and nothing
is paid by the individual participants.
Non matching employer contributions to a group plan, such as a 401(k).
An insurance application that does not require a medical examination.
A supplemental report outlining the applicant's health history.
A policy or annuity in which the policyholder does not receive
An annuity funded with money that has already been taxed.
nonqualified deferred compensation plan
Benefits plan that does not meet the legal requirements to be pretaxed
like a qualified plan.
nonretroactive disability benefits
Disability benefits that are paid only after a set length of time
following the time the disability occurred.
The amount needed to cover a single year of retirement benefits for a
plan participant or for a plan itself.
normal retirement age
The age at which a participant can retire and receive full benefits.
numerical rating system
A system of ranking risk in which numerical values are assigned to
various factors according to their impact on mortality.
occupation classA group of occupations that present
a similar level of risk.
Any choice or decision that policyholders can make concerning
settlements, dividends, or other aspects of the policy.
optionally renewable policy
An insurance policy that can be renewed only if the insurer chooses to
ordinary life insurance
Life insurance with monthly premiums and unlimited (within reason or
legal constraints) maximum death benefits.
Patients with unique conditions or illnesses that cannot be classified
under the standard groups.
A preset amount that the plan participant must pay before the
insurance company pays 100% of the expenses.
Healthcare services that do not involve an overnight stay in a
hospital or other medical facility.
Coverage exceeding the probable loss to which it applies.
Provisions stating that, in some cases, benefits will be reduced if a
condition of overinsurance exists.
overlined A situation in which an insurance company has accepted a
level of insurance above its capacity at a certain risk level.
paid-up policyAn insurance policy that still
provides benefits even though all premiums have been paid.
Any medical report created by medical personnel other than a
physician. (They are often used as part of an insurance application.)
A disability that affects some but not all duties or that affects the
amount of time the individual can work (from full-time to part-time).
partial disability benefit
A benefit, generally a portion of the full disability amount, paid
when the insured suffers a partial disability. Also called residual
Termination of an employee-benefits plan or pension for some
participants but not all.
A provision in an insurance policy that allows the policyholder to
take a certain amount of cash from the policy's cash value, thus
decreasing the cash value. Also called a withdrawal provision.
An insurance policy in which dividends are paid to the policyholder.
The amount of service an employee gives before a pension plan is
instituted or before the employee enrolled.
The person to whom benefits are payable.
Premium payment plan in which the premium amount is deducted from the
PCP (primary-care provider)
The healthcare professional who is the first source for overseeing an
individual's medical needs. (The PCP refers the individual to specialists
or hospitals as needed.)
peer review group
Local groups of physicians or medical experts who promote ethical
practices in their industry.
Income paid to a person who has retired for the remainder of their
Pension Benefit Guaranty Corporation
The organization that insures benefits in defined benefit pension
plans and guarantees that benefits will be paid regardless of what happens
to the pension fund.
The institution that manages the assets used to pay pensions, or the
per-capita beneficiary designation
A group of beneficiaries among whom only those who survive the insured
will collect on policy proceeds.
A deductible that must be met for each separate illness or injury
before insurance benefits are paid.
The maximum amount of money a medical-expense policy will pay for any
particular illness or injury.
The cause of damages or a loss, such as a flood or theft.
The period of time during which an insurance company guarantees that
benefits will continue to be paid.
permanent and total disability
A medical condition that prevents any return to employment.
per stirpes beneficiary designation
A system under which the beneficiary's descendants will receive the
beneficiary's share of the insurance proceeds, if the beneficiary dies
before the insured.
physical examination provision
A provision that allows the insurer to have the insured examined by a
doctor of the insurer's choice at the insurer's expense.
A document outlining the terms of an employee-benefits plan.
An individual taking part in a plan who shares in the responsibilities
and benefits listed in the plan.
The party that maintains a plan, such as a pension plan.
point-of-service program (POS)
Healthcare delivery method offered as an option of an employer's
indemnity program in which employees coordinate their healthcare needs
through a primary-care physician.
A written contract of insurance.
The annual anniversary of the date on which a policy was issued.
An additional cost added to the premium to cover expenses. It is a set
fee that is not based on policy size.
The party or individual who owns an insurance policy (contract).
The maximum amount a policy will pay.
A loan made to a policyholder by the insurer and secured by the
policy's cash value.
The amount of benefits the beneficiary receives after all adjustments,
fees, and other factors are taken into consideration.
Statements describing the operation of the policy.
A summary of the policy, containing any data required by law, that is
given to the applicant during the application process.
A single year, beginning when the policy is issued.
The combination of several small groups into one large group for
insurance purposes, such as obtaining lower premiums or more group
The ability to transfer benefits from one plan to another or from one
employer to another.
The collection of products offered by an insurance company.
A requirement under the Fair Credit Reporting Act that if an insurance
company makes an adverse decision concerning an applicant based on
information obtained from a consumer reporting agency, they must notify
the applicant of this.
power of agency
The agent's right to act on behalf of an insurer.
PPO (preferred provider organization)
A managed-care system in which the insured can choose from a network
of healthcare providers for medical attention, or the insured can go
outside the group. A discounted fee is available for insureds who use the
listed healthcare providers.
Prior authorization from the insurer is required before an insured can
be admitted to a hospital, except in emergency situations.
Written approval by the insurance company or representative for an
insured to be admitted to a hospital or other medical facility.
pre-authorized payment system
A form of payment in which the insured authorizes both the bank and
the insurance company to allow automatic withdrawals of an account in
order to pay premiums.
predetermination of benefits provision
A provision stating that in situations in which costs will exceed a
certain amount, the medical provider must submit treatment plans to the
insurer before any services are undertaken in order to determine what
amount is payable by the insurance plan.
A medical condition that existed prior to obtaining insurance.
A provision in an insurance plan that states that medical expenses
relating to preexisting conditions will not be covered until the insured
has been enrolled in the plan for a certain length of time.
preference beneficiary clause
A clause stating that if no specific beneficiary exists, all benefits
will be paid in a preset order according to lists of individuals within
preferred provider organization PPO.
preferred risk class
A risk class whose expected mortality is below that of the standard
Payment charged by an insurance company to establish and maintain an
Funds deposited with the insurance company to cover future premiums.
An insurance option in which dividends are applied toward premiums to
reduce their amounts.
A requirement under the Fair Credit Reporting Act stating that
insurance companies must inform applicants that consumer reports on them
may be produced.
A condition, such as total blindness, that automatically results in
the individual being classified as totally disabled.
prima facie rate
Standard premium rates suggested by government regulators.
The beneficiary with the first right to collect on policy benefits.
The person or group authorizing another, the agent, to act on their
The money the insurance company pays for insurance policies or
The physicians, nurses, hospitals, and others who perform healthcare
proximate cause of death
The event that is responsible for the death in question.
qualified annuityA form of annuity in which the
money funding the annuity is deductible from the gross income.
qualified domestic-relations order
A settlement in which a portion of a pension plan or other
employee-benefits plan is assigned to an alternate payee due to issues
arising from alimony, child support, or other domestic matter.
qualified joint and survivor (QJ&S) annuity
An annuity in which benefits continue to the spouse of the plan
participant even after the death of the participant. These continuing
benefits are often at a lesser rate than the original annuity benefits.
Employee-benefits plans that meet federal requirements allowing them
quote Estimates of the cost of insurance, based on the initial
information given by the applicant.
rate makingThe calculation of premium rates.
rate of return method
A method of comparing insurance policy costs by calculating the
An insurance policy issued to an individual with above-average losses.
(These policies often have higher premiums or certain exclusions that are
The standard fees charged by physicians, hospitals, or other
healthcare providers. (These are often used as a base for what an
insurance plan will or will not cover.)
A method of changing the beneficiary of an insurance policy simply by
notifying the insurance company in writing.
A benefit paid if an insured suffers a loss of income after returning
to work due to the earlier disability.
An annuity guaranteeing that at minimum the price of the annuity will
be paid out.
Restoring a lapsed policy and putting it back into force.
A provision stating the requirements the policyholder must meet in
order to have a policy put back into force if it has been terminated as a
result of not paying the premiums.
Transactions in which one insurance company buys insurance from
another company to help cover all or part of the risks in the insurance
The agreement between the reinsurer and the
The insurance company that accepts the risk in a reinsurance deal.
Also called the assuming company.
relative value schedule
A schedule describing the cost of medical procedures as a unit rather
than a dollar amount. (A procedure with a value of 50, for example, would
be more expensive than a procedure with a value of 40.)
Premiums payable after the initial premium.
An insurance provision stating the guidelines that a policyholder must
meet to continue insurance coverage at the end of the initial term, and
what actions must be taken to do so.
Surrendering an insurance policy in order to purchase a different
The cost to replace an insured item.
Statements by insurance applicants as to some past or existing fact or
circumstance. Such statements must be true to the best of the applicant's
knowledge and belief, but are not warranted as exact in every detail.
The attempt by an insurer to void a policy due to material
misrepresentation on the insurance application.
residual disability benefitpartial disability benefit.
A claim the insurer refuses to pay, but which is still being
A war-hazard exclusion in which benefits will not be paid for losses
resulting from war or related acts.
In reinsurance, the amount of risk the ceding company retains.
The maximum amount of insurance an insurance company will carry before
ceding part of the risk to a reinsurer.
retired lives reserve
A fund used to provide employees with group life insurance after they
retroactive disability benefit
Disability benefits that are payable beginning at the time of
disability, but whose initial payment occurs after the elimination period
A premium rate set at the beginning of the payment period but paid at
the end only if claim experience justifies it. This is in addition to a
smaller base premium that is paid at the beginning of the payment
A beneficiary that can be dropped as beneficiary at any time by the
policyholder before the insured's death.
A policy amendment used to change coverage. Also called an endorsement.
The chance of loss to the insurance company, such as the insured being
more likely to develop lung cancer because of smoking.
A group of insured individuals who are of similar risk for the
insurance company, such as nonsmokers, substandard, etc.
second opinionA medical opinion provided by a
second physician or medical expert after first receiving an opinion on the
medical issue by another physician or medical expert.
The party who will receive insurance proceeds should the beneficiary
die before the insured person. Also called contingent beneficiary.
Section 401(k) Plan
A tax-deferred investment plan generally used for retirement
purposes. Also called a Cash or Deferred Arrangement (CODA).
self-administered group insurance plan
A group insurance plan in which the policyholder performs
administrative functions, such as record keeping, request processing, and
address changes, instead of the insurer.
Self-Employed Individuals Tax Retirement Act of 1962
self-insured group insurance
Group insurance in which the group sponsor rather than the insurance
company is responsible for paying claims.
An action that eliminates the responsibility of the insurer toward the
payee. (Generally it involves the payment of all benefits.)
The agreement as to how policy proceeds will be paid to the
settlement option payments
Disbursement of benefits in multiple payments rather than in a lump
Options given to the policyholder or beneficiary as to how the policy
proceeds will be paid.
short-form reinstatement application
A reinstatement application asking only enough questions to determine
if major changes in the insured's condition have occurred.
Injury or illness that disables an individual for a temporary length
short-term disability insurance
Insurance that provides benefits, often as a portion of salary, during
a period of short-term disability.
simplified employee pension
A pension plan in which employer contributions go into an IRA owned by
the individual instead of a group pension plan.
simultaneous death act
A law stating that if a beneficiary and an insured die at the same
time, it is assumed that the beneficiary died first.
An annuity purchased with a single premium payment.
Method of paying the entire premium at once, either in a lump sum or
as additional principal to a loan.
single-purchase annuity contract
A contract with a single premium used to purchase annuities for all
participants in a terminating pension plan.
small-group insurance plan
Group insurance, usually covering less than 25 people, that is
designed to be simpler to underwrite than the typical group plan.
social-insurance supplement policy
Medical-expense insurance designed to supplement benefits provided by
A federal program providing retirement income, disability coverage,
and healthcare to qualified individuals.
Insurance on the life of a sole proprietor of a business, designed to
counter the potential loss of income to the owner's family following death
Insurance that covers specific topics such as dental-expense coverage.
spendthrift trust clause
An insurance provision protecting policy proceeds held by the insurer
from creditors of the beneficiary.
split-dollar insurance plan
A form of employee benefits in which the employee has individual life
insurance that is partially paid for by the employer.
spouse and children's insurance rider
An insurance rider that provides a degree of coverage for a spouse and
children as well as the insured.
An insurance plan providing dental coverage only.
An insurance plan providing life insurance only.
stand-alone Rx/ stand-alone prescription
An insurance plan providing prescription-drug coverage only.
Standard Nonforfeiture Law
State law stating what the minimum benefits a life-insurance policy
standard plan termination
The termination of a plan that has sufficient funds to pay for any and
all benefits the participants may be entitled to.
standard premium rate
The premium rate for a person considered to be average in the chance
of experiencing a loss.
standard risk class
A class of individuals considered to be average in the chance of
experiencing a loss.
Insurance used to repurchase company stock from a deceased
An insurance provision stating that the insurance company will pay all
expenses after a set amount of out-of-pocket expenses has been paid.
An annuity that lasts for the length of the annuitant's life and stops
all payments at the time of death.
straight-life income option
An insurance option that states that benefit payments will be made to
the beneficiary until the beneficiary dies and that at that time all
Life insurance in which the premiums are paid until death. Also called
continuous premium life insurance.
substandard premium rate
A premium rate, generally higher than a standard premium, charged on a
substandard risk class
A risk class with a greater chance of loss than the average person.
An insurance provision that states that no benefits will be paid if
the insured dies as a result of suicide. (This is often limited to a set
period of time following the issue of the insurance policy.)
superimposed major-medical plan
A medical plan used in conjunction with basic medical plans that
provides coverage if expenses exceed what is covered by the basic plans.
supplemental group life insurance
Group life insurance providing additional coverage over the basic
coverage of existing group plans.
supplemental major-medical insurance
Medical insurance providing additional coverage over the basic
coverage of existing medical insurance.
An insurance rider providing additional benefits.
Any extra charge applied by the insurer.
A schedule listing maximum benefits payable for different surgical
To cancel an insurance policy before its maturity date.
A fee charged when the policy is surrendered for its cash value.
survivor income benefit insurance
Life insurance that provides income benefits to a survivor (often
limited to a spouse or children).
In life insurance, a provision requiring that the beneficiary survive
the owner of the policy by a set amount of time in order to receive the
survivorship life insurance
Life insurance covering two people that does not pay benefits until
both have died.
temporary insurance agreementsSee interim
temporary life annuity
A series of payments, structured like an annuity, that continues for a
limited amount of time.
The cost of processing death-benefit claims and the subsequent
Insurance in which the benefit is payable only if the loss occurs
during a specific period of time.
The use of a will to determine who the beneficiary is.
A group that administers an insurance policy but that is not
responsible for paying any claims.
Insurance coverage applied for by someone other than the proposed
A disability in which the individual is unable to perform any of the
essential duties of the position previously held, or any position for
which training, education, and experience exist.
A form of accidental death coverage that pays triple the normal
benefit if the death occurred while a passenger on a public system such as
a bus or airplane.
trust fund plan
A pension plan in which all contributions are sent to a trustee who
then invests the contributions and makes any benefit payments.
ultimate costThe total net cost of a pension
plan over the life of the plan.
Group benefits-plan funding in which the funds are held as a whole and
not allocated to specific participants.
unbundled insurance product
Insurance policies in which the factors used to calculate premiums and
cash values are identified separately.
Benefits for which no beneficiary or payee can be located. (State law
governs how these situations are handled.)
The person who performs the underwriting function or an organization
that ensures money is available for policies that must be paid.
The process of selecting insurance applicants and classifying them
based on their risk, so proper premiums can be charged.
The department in an insurance company that performs the underwriting
Factors that increase risk above normal.
Set guidelines, which may include medical records or personal history,
that state what is required to determine an individual's insurability.
uninsurable risk class
Individuals who cannot gain insurance due to the high level of risk
associated with them.
A system for figuring benefits for a pension plan based on years of
usual, customary, and reasonable expenses
Regular charges for a particular medical service.
A form of claims review in which the insurance company analyzes a case
to determine if the treatment given is appropriate or necessary.
valuation mortality tablesMortality tables used as an
industry standard rather than the mortality tables used by separate
A contract, such as an insurance contract, in which the benefit
amounts are established in advance.
An annuity in which the benefit payment is not guaranteed or
specified, and, therefore, may change over time.
variable life insurance
Life insurance, generally with a minimum guaranteed death benefit, in
which the benefits and cash value can change based on the investment
In benefit plans where a participant accrues benefits as a result of
time spent in the plan, vested benefits are those benefits now available
due to the length of time the participant has been enrolled.
A contract that is not valid for any reason, including legal issues.
waiting periodA period of time that must pass
before insurance coverage begins, benefits are qualified for, or entrance
into a plan is permitted.
A waiver of the initial deductible if injuries are caused by an
waiver-of-premium-for-disability (WP) benefit
A promise by the insurer to stop collecting premiums from the insured
for the entire period the insured is injured and unable to work.
war exclusion provision
Insurance policy provisions that decrease or eliminate benefits if
death is a result of war or military service.
weekly indemnity plan
A form of short-term disability that pays a percentage of weekly
earnings to the insured.
whole life annuity
A series of payments made on a regular schedule over the entire life
of the payee.
whole life insurance
Life insurance that remains in effect for the entire life of the
A voluntary cancellation of a policy by the insured.
withdrawal provisionpartial surrender provision.
Government-mandated insurance for employees and their dependents if
the employee suffers a job-related injury, disease, or death.
yearly renewable term (YRT) insuranceTerm life insurance that allows the
policyholder to renew each year regardless of circumstances or conditions
for a specified time period.
year of service
Defined under ERISA, a 12-month period during which an employee works
at least 1,000 hours for the employer.