Wednesday, March 22, 2017
Life Insurance Glossary
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Accidental Bodily Injury:
Insured's bodily injury or death is due to an unforseen accident independent of
any natural causes.
Accidental Death and Dismemberment (AD&D):
This type of insurance pays a benefit to the insured or the insured's beneficiary
in the event of bodily injury or death by accidental means (See also Accidental
bodily injury). Accident insurance can take the form of an individual policy or
an AD&D rider on an insurance policy to supplement the death benefit amount
when the insured loses any two limbs or eyesight in both eyes.
Accidental Death Rider:
A rider added to a life insurance policy that
pays a benefit to the beneficiary in addition to the face amount of the policy when
the insured's death is the result of an accident (See also Accidental death and
dismemberment). Sometimes referred to as Double or Triple Indemnity
where two or three times the death benefit amount is paid to the beneficiary when
certain age and time restrictions are met.
An uncontrollable, unforeseen event that occurs which results in accidental bodily
injury (See also Accidental Bodily Injury). The mishap itself would have to be accidental
in addition to the injury.
Act of God:
Certain acts of nature such as earthquakes, floods, or hurricanes, that are beyond
Deals with the mathematics and probabilities of insurance. Ensures evaluation of
risk, adequate premium payment and other statistical studies for all type of risks
that are underwritten.
Adhesion, Contracts of:
A one-sided, legally binding agreement prepared by one party and wholly accepted
or rejected by another party. An insurance policy is a unilateral, take it or leave
it contract because the insurer sets the terms of the policy. All insurance contracts
are considered to be contracts of adhesion.
Age Basis (Age Change):
An applicant's insurance age is determined one of two ways, depending on the insurance
carrier: (1)Age Nearest: six months before applicant's birthday, their insurance
age changes; (2)Actual Age: applicant's last birthday will be used to determine
the insurance age. Most insurance carriers use age nearest.
In Liability Insurance, the maximum amount of coverage under the contract period,
regardless of how many accidents occur.
A contract such as an insurance contract in which the dollar amount to be paid by
each party is not equal. For example, a policyholder could pay a premium and collect
nothing from the insurer, or the policyholder could pay a premium and collect more
from the insurer than the amount of premium paid if a loss occurs.
An official document that serves as a revision to the original policy.
Annually Renewable Term (ART):
Provides the policyowner the right to renew his/her term life insurance
policy at the end of each year without evidence of insurability. This annual renewal
right continues until the policyowner reaches a specified age or for the number
of years determined by the policy's contract. With most Annual(Yearly) Renewable
Term contracts, the premium increases every year, especially as the policyowner
reaches age 50 and older.
A form that the proposed insured completes with personal, financial and familial
history information and used by the insurer to decide whether or not to accept the
risk and determine the proposed insured's underwriting classification.
A valuation of property conducted to determine the amount of insurance to be purchased
or the amount of damage to be paid.
The transfer of ownership rights of a life insurance
policy to another person or business.
The age of the insured on a particular date.
Attending Physician's Statement (APS):
Medical information and records usually obtained from the insured's primary care
physician and used in underwriting a life or health insurance application.
The amount of insurance coverage an underwriter will accept on a given color of
property or risk exposure.
In auto insurance, coverage separate from comprehensive insurance that provides
protection to the insured in the case of physical damage to the insured's car should
a collision occur with another inanimate object.
For more reference, click on any of the letters below to find life insurance terms
that begin with that letter.
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