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| 5 Types Of Disability (Or Health) Insurance | 1. Disability Income Insurance2. Accidental Death and Dismemberment (AD&D) Insurance3. Medical Expense Insurance4. Dental Insurance5. Long Term Care Insurance |
| Agent | A person licensed by a state to sell insurance. |
| Binder | A document that temporarily provides insurance coverage until a policy is issued. It specifies the perils covered, the amount of coverage, the effective date of the coverage, and the name of the insurer providing the coverage. Does not state the premium amount. |
| Blanket Disability | Insurance written on schools, sports teams, and church camps in order to prevent lawsuits. The policy covers all participants, so they do NOT have to be issued certificates of insurance |
| Claim | The insured's notification to the insurer that a payment is requested for a covered loss. |
| Coinsurance | A cost-sharing mechanism between the insurer and the insured in a medical insurance transaction in which the insurer agrees to pay a large percentage of the expenses, and the insured is responsible for paying the remainder. |
| Credit Based Insurance Score | Information from your credit report that helps insurance companies predict how often you are likely to file claims and how expensive those claims will be. Many insurance companies use this method when evaluating insurance applications or policies. |
| Damages(Compensation) | Award, typically of money, to be paid to a person as compensation for loss or injury |
| Deductible | The amount the insured must pay 'out of pocket' before the insurer will cover the remaining costs |
| Definitions | Explanations of frequently used terms and phrases (located at the beginning of the insurance policy). These must be carefully reviewed when interpreting the policy's coverage intent; anything not contained within the definition of the specified peril is not covered. |
| Discounts | Policy price reduction to policy holders. Common reasons include: multiple policies from the same company, fire resistant structure, interior sprinklers, smoke detectors, tiedowns, 55 or older, original owner, new home, nonsmoker, security system |
| Elements of Insurance Policy | Declarations (basic info, amount and properties), Definitions, Insuring Agreement (promise to pay), Additional Coverage (optional), Conditions (general rules), Exclusions, and Endorsements |
| Endorsement | Amendment to a policy |
| Exclusions | Things that are never covered under an insurance policy |
| Fair Credit Reporting Act | Procedures that consumer-reporting agencies must follow in order to ensure that records are confidential accurate relevant and properly used |
| Hazard | Are conditions or situations that increase the probability of an insured loss occurring |
| Health Insurance | Any form of insurance whose payment is contingent on the insured incurring additional expenses or losing income because of incapacity or loss of good health. |
| Indemnification | To make compensation to an entity, person, or insured for incurred injury, loss, or damage |
| Insurable Intrest | The possibility of loosing money or something of value in the event of loss |
| Insurance | Protection against risk of loss |
| Insurance (Economic Definition) | Function of financial intermediation by which individuals exposed to a specified contingency each contribute to a pool from which covered events suffered by participating individuals are paid. |
| Insurance (Legal Definition) | An agreement, the insurance policy or insurance contract, by which one party, the policy owner, pays a stipulated consideration called the premium to the other party called the insurer, in return for which the insurer agrees to pay a defined amt. Of money or provide a defined service if a covered event occurs during the policy term. |
| Insurance Commissioner | Is the chief executive and administrative officer of a state's insurance department. |
| Insurance Policy/Contract | A legal agreement made between an insurer and an individual, in which the insurer collects a small amount of money, called a premium, from the insured in exchange for the insurer's promise to pay benefits in the event of covered losses. |
| Insured | The person who is covered under the policy. |
| Law Of Large Numbers | An economic phenomena, which states that as the insurance group increases in size, it is easier to predict the number of future losses over a certain period of time. This helps insurance companies estimate how many losses will occur in a given year |
| Liability | Any legally enforceable obligation. Within the context of insurance, the obligation to pay a monetary award for injury or damage caused by one's negligent or statutorily prohibited action. |
| Limit Of Liability | The total amount the insurer will pay for an insured risk. |
| Multiline Discount | Price reduction if the insured buys two (or more) types of insurance from the same company, such as renter's and auto insurance. |
| Peril | The cause of the loss and the event insured against. In life and health insurance, these include premature death, dependency during old age, accident, and sickness. Common perils include: Fire, lightning, windstorm, hurricane, hail, explosion, riots, damage, smoke damage, theft, vandalism, glass breakage, property damage |
| Personal Liability | Protects policyholders from claims or judgements made against them for the following: damage to the claimant's property ("Fido dug up my rosebushes!"), physical damage to a claimant ("Your son ran me over with his Ripstick!"), |
| Policyowner | The person who has all the ownership rights under the policy, pays premiums, and accepts the policy when delivered. |
| Portability | An employee's ability or right to retain certain benefits when switching employers. |
| Pre-Existing Condition | Any condition, physical or mental, regardless of the cause of the condition for which medical advice, diagnosis, care or treatment that was recommended or received prior to the enrollment date (pregnancy is no longer a pre-existing condition) |
| Premium | Recurring payment that covers the cost of insurance; paid by the policyholder to the insurer |
| Provisions | The characteristics, privileges, duties of all parties, and rights of a policy. |
| Proximate Cause | The cause that sets other causes in motion when multiple causes combine to produce loss or damage. |
| Riders | They are policy elements that "ride on" or add to the existing coverage by modifying provisions or coverage. |
| Risk | The uncertain possibility of a loss occurring. |
| Risk Avoidance | Method of handling risk in which a person intentionally steers clear of exposure to a risk. |
| Risk Pooling | The insurance practice of combining similar losses from many people so that the average loss over the entire group is relatively constant. |
| Risk Reduction | To mitigate; Taking precautionary measures to reduce the likelihood of a loss or to reduce the severity of a possible loss. Example, installing a security system. |
| Risk Sharing | Method of handling risk which entails distributing risk over a large number of people so that all members of the group carry a portion of the risk. |
| Risk Transfer | Method of handling risk in which risk is transferred from one party to another. This is the essence of insurance. |
| Schedule | Insure an item for a specific value of its own |
| Valuation | Condition in policy that stipulates how losses will be paid |
| Waiting Period | Period of time that you have to wait until you are eligible for benefits ; Also called the Elimination Period. |
| Workers Compensation | Provides payment for lost wages and medical related expenses due to workplace illness/injury |
