Insurance Definitions

Annuity Terms & Definitions

admin — Tue, 10 Jun 2008 08:29:32 -0500

First, let’s establish what an annuity is. An annuity is a financial product that is sold by a financial institution. The purpose of an annuity is to receive monies from an individual, make those monies grow, and then provide him a regular source of income later in life, usually at retirement. This income can be in the form of a fixed annuity or a variable annuity. The person agrees with the financial institution how long he will receive these payments, regardless of whether he’s still living or not. For instance, an agreement can be entered into for a fixed period of 20 years.

Common Whole Life Insurance Terms & Definitions

admin — Sat, 07 Jun 2008 06:58:48 -0500

Those who are uninitiated into the world of insurance might find a standard contract a little intimidating. Insurance companies have their own lexicon, and this can trip up laypersons shopping for insurance. The particularly confusing world of whole life insurance has its own common terms. Understanding them can shed some light upon

Glossary of Whole Life Insurance Terms

Insurance Definition: A-SHARE VARIABLE ANNUITY

admin — Sun, 23 Mar 2008 06:45:00 -0500

A-SHARE VARIABLE ANNUITY:

Definition:

A form of variable annuity contract where the contract holder pays sales charges up front rather than eventually having to pay a surrender charge.

Information provided by Insurance Information Institute

Insurance Definition: ACCELERATED DEATH BENEFITS

admin — Sun, 23 Mar 2008 06:43:48 -0500

ACCELERATED DEATH BENEFITS:

Definition:

A life insurance policy option that provides policy proceeds to insured individuals over their lifetimes, in the event of a terminal illness. This is in lieu of a traditional policy that pays beneficiaries after the insured’s death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.

Information provided by Insurance Information Institute

Insurance Definition: ACCIDENT AND HEALTH INSURANCE

admin — Sun, 23 Mar 2008 06:42:30 -0500

ACCIDENT AND HEALTH INSURANCE:

Definition:

Coverage for accidental injury, accidental death, and related health expenses. Benefits will pay for preventative services, medical expenses, and catastrophic care, with limits.

Information provided by Insurance Information Institute

Insurance Definition: ACTUAL CASH VALUE

admin — Sun, 23 Mar 2008 06:41:16 -0500

ACTUAL CASH VALUE:

Definition:

A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation. (See Replacement cost)

Information provided by Insurance Information Institute

Insurance Definition: ACTUARY

admin — Sun, 23 Mar 2008 06:40:00 -0500

ACTUARY:

Definition:

An insurance professional skilled in the analysis, evaluation, and management of statistical information. Evaluates insurance firms’ reserves, determines rates and rating methods, and determines other business and financial risks.

Information provided by Insurance Information Institute

Insurance Definition: ADDITIONAL LIVING EXPENSES

admin — Sun, 23 Mar 2008 06:39:01 -0500

ADDITIONAL LIVING EXPENSES:

Definition:

Extra charges covered by homeowners policies over and above the policyholder's customary living expenses. They kick in when the insured requires temporary shelter due to damage by a covered peril that makes the home temporarily uninhabitable.

Information provided by Insurance Information Institute

Insurance Definition: ADJUSTER

admin — Sun, 23 Mar 2008 06:37:08 -0500

ADJUSTER:

Definition:

An individual employed by a property/casualty insurer to evaluate losses and settle policyholder claims. These adjusters differ from public adjusters, who negotiate with insurers on behalf of policyholders, and receive a portion of a claims settlement. Independent adjusters are independent contractors who adjust claims for different insurance companies.

Information provided by Insurance Information Institute

Insurance Definition: ADMITTED ASSETS

admin — Sun, 23 Mar 2008 06:36:10 -0500

ADMITTED ASSETS:

Definition:

Assets recognized and accepted by state insurance laws in determining the solvency of insurers and reinsurers. To make it easier to assess an insurance company’s financial position, state statutory accounting rules do not permit certain assets to be included on the balance sheet. Only assets that can be easily sold in the event of liquidation or borrowed against, and receivables for which payment can be reasonably anticipated, are included in admitted assets. (See Assets)

Information provided by Insurance Information Institute

Insurance Definition: ADMITTED COMPANY

admin — Sun, 23 Mar 2008 06:34:56 -0500

ADMITTED COMPANY:

Definition:

An insurance company licensed and authorized to do business in a particular state.

Information provided by Insurance Information Institute

Insurance Definition: ADVERSE SELECTION

admin — Sun, 23 Mar 2008 06:32:52 -0500

ADVERSE SELECTION:

Definition:

The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all, as in the case of floods. (Flood insurance is provided by the federal government but sold mostly through the private market.) In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance works best when risk is shared among large numbers of policyholders.

Insurance Definition: AFFINITY SALES

admin — Sun, 23 Mar 2008 06:31:49 -0500

AFFINITY SALES:

Definition:

Selling insurance through groups such as professional and business associations.

Information provided by Insurance Information Institute

Insurance Definition: AGENCY COMPANIES

admin — Sun, 23 Mar 2008 06:30:20 -0500

AGENCY COMPANIES:

Definition:

Companies that market and sell products via independent agents.

Information provided by Insurance Information Institute

Insurance Definition: AGENT

admin — Sun, 23 Mar 2008 06:29:07 -0500

AGENT:

Definition:

Insurance is sold by two types of agents: independent agents, who are self-employed, represent several insurance companies and are paid on commission, and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.

Information provided by Insurance Information Institute

Insurance Definition: ALIEN INSURANCE COMPANY

admin — Sun, 23 Mar 2008 06:27:53 -0500

ALIEN INSURANCE COMPANY:

Definition:

An insurance company incorporated under the laws of a foreign country, as opposed to a foreign insurance company that does business in states outside its own.

Information provided by Insurance Information Institute

Insurance Definition: ALLIED LINES

admin — Sat, 22 Mar 2008 20:47:58 -0500

ALLIED LINES:

Definition:

Property insurance that is usually bought in conjunction with fire insurance; it includes wind, water damage, and vandalism coverage.

Information provided by Insurance Information Institute

Insurance Definition: ALTERNATIVE DISPUTE RESOLUTION

admin — Sat, 22 Mar 2008 20:46:55 -0500

ALTERNATIVE DISPUTE RESOLUTION:

Definition:

Alternative to going to court to settle disputes. Methods include arbitration, where disputing parties agree to be bound to the decision of an independent third party, and mediation, where a third party tries to arrange a settlement between the two sides.

Information provided by Insurance Information Institute

Insurance Definition: ALTERNATIVE MARKETS

admin — Sat, 22 Mar 2008 20:46:01 -0500

ALTERNATIVE MARKETS:

Definition:

Mechanisms used to fund self-insurance. This includes captives, which are insurers owned by one or more non-insurers to provide owners with coverage. Risk-retention groups, formed by members of similar professions or businesses to obtain liability insurance, are also a form of self-insurance.

Information provided by Insurance Information Institute

Insurance Definition: ANNUAL ANNUITY CONTRACT FEE

admin — Sat, 22 Mar 2008 20:45:03 -0500

ANNUAL ANNUITY CONTRACT FEE:

Definition:

Covers the cost of administering an annuity contract.

Information provided by Insurance Information Institute

Insurance Definition: ANNUAL STATEMENT

admin — Sat, 22 Mar 2008 20:42:26 -0500

ANNUAL STATEMENT:

Definition:

Summary of an insurer’s or reinsurer’s financial operations for a particular year, including a balance sheet. It is filed with the state insurance department of each jurisdiction in which the company is licensed to conduct business.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITANT

admin — Sat, 22 Mar 2008 20:41:36 -0500

ANNUITANT:

Definition:

The person(s) who receives the income from an annuity contract. Usually the owner of the contract or his or her spouse.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITIZATION

admin — Sat, 22 Mar 2008 20:40:33 -0500

ANNUITIZATION:

Definition:

The conversion of the account balance of a deferred annuity contract to income payments.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY

admin — Sat, 22 Mar 2008 20:39:26 -0500

ANNUITY:

Definition:

A life insurance product that pays periodic income benefits for a specific period of time or over the course of the annuitant’s lifetime. There are two basic types of annuities: deferred and immediate: Deferred annuities allow assets to grow tax deferred over time before being converted to payments to the annuitant. Immediate annuities allow payments to begin within about a year of purchase.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY ACCUMULATION PHASE OR PERIOD

admin — Sat, 22 Mar 2008 20:36:08 -0500

ANNUITY ACCUMULATION PHASE OR PERIOD:

Definition:

The period during which the owner of a deferred annuity makes payments to build up assets.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY ADMINISTRATIVE CHARGES

admin — Sat, 22 Mar 2008 20:34:28 -0500

ANNUITY ADMINISTRATIVE CHARGES:

Definition:

Covers the cost of customer services for owners of variable annuities.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY BENEFICIARY

admin — Sat, 22 Mar 2008 20:30:04 -0500

ANNUITY BENEFICIARY:

Definition:

In certain types of annuities, a person who receives annuity contract payments if the annuity owner or annuitant dies while payments are still due.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY CONTRACT

admin — Sat, 22 Mar 2008 20:28:16 -0500

ANNUITY CONTRACT:

Definition:

An agreement similar to an insurance policy for other insurance products such as auto insurance.

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY CONTRACT OWNER

admin — Sat, 22 Mar 2008 20:15:24 -0500

ANNUITY CONTRACT OWNER:

Definition:

The person or entity that purchases an annuity and has all rights to the contract. Usually, but not always, the annuitant (the person who receives incomes from the contract).

Information provided by Insurance Information Institute

Insurance Definition: ANNUITY DEATH BENEFITS

admin — Sat, 22 Mar 2008 20:14:30 -0500

ANNUITY DEATH BENEFITS:

Definition:

The guarantee that if an annuity contract owner dies before annuitization (the switchover from the savings to the payment phase) the beneficiary will receive the value of the annuity that is due.

Information provided by Insurance Information Institute