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8 Cards in this Set
- Front
- Back
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Earned premium |
That portion of the premium for which policy protection has already been given. For example, if you buy a one year health policy for a premium of $1200 and the insurer cancels you exactly 6 months later, they are entitled to keep $600 (the earned premium), but they must also refund you $600, which is called the "unearned" premium. If they cover you for the entire year, all the premium would be earned. This concept also applies to P&C insurance, but not to life insurance, where all premiums are considered to be fully "earned" upon payment. |
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Effective date |
The date on which an insurance policy goes into effect and from which protection is furnished. |
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Eligibility period |
The period during which the employee is eligible to obtain coverage under a group life or health plan. Also known as the "open enrollment" period. |
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Endorsement |
A form attached to an insurance P&C policy changing the contract. Endorsements are called "riders" in a life and health insurance. No change to a policy may become effective until approved by a company officer. |
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Endowment policy |
A cash value life policy for which premiums are paid for a limited number of years, such as age 65. If the insured is alive at the end of this Premium-paying period, he/she receives the face amount of the policy. If the insured dies before maturity of the policy, the beneficiary receives the proceeds. Generally the most expensive type of cash value insurance, since the policy reaches maturity prior to age 100. Endowments are often purchased to supplement retirement or for children's educational purposes. |
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Exclusions |
Causes or conditions listed in the policy that are not covered and for which no benefits are payable. For example, in most states, suicide is excluded on a life policy for the first two years. On health insurance, intentional self infliction injury is never covered. |
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Experience |
The loss record of an insured, a classim coverage, or an insurance company. For example, most a large group life policies are rated based on the prior claims history of the group, which is called "experience rating." |
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Extended term option |
A life-insurance non-forfeiture option under which the insured uses the policy's cash-value to purchase a one-year term insurance in the in amount equal to the original policy face and mouth. Although the policyholder could select extended term option at anytime, if the policy lapsed his and no other non-forfeiture option has been selected, the policy will automatically go into extended term. Remember, there are three non-forfeiture options: cash surrender, reduced paid up, and extended term. |
