Life And Health Insurance Glossary (A)

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Accident

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Is said with an unforeseen and unintended

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Accident and sickness

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Insurance against bodily injury, disability, and death by accident, or against disability or expense resulting from sickness, and the insurance relating thereto

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Accidental Means

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The unexpected cause of an accidental bodily injury. under an Accidental Means definition, which is very restrictive, if you meant to do whatever cause your injury, there is no coverage. Most health insurance policies cover Accidental Bodily Injury, which is much broader, in that it covers accidents regardless of the cause.

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Absolute Assignment

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And transfer by the policyholder of all control and rights to a third party

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Accumulation at interest option

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A dividend or settlement option under which the policyholder allows his/her dividends or policy proceeds to accumulate interest with the company. Although the dividends or proceeds are not generally taxable, the interest earned is.

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Actuary

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One concerned with the application of probability and statistical theory to insurance, utilizing the laws of large numbers.

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ADB Accidentally Death and Dismemberment insurance

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accidental death benefit also known as double indemnity. A writer added to a life policy that will pay double the face amount if the insured dies as a result of accident , generally within 90 days of the accident.

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AD&D Accidental Death and Dismemberment

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Accidental index dismemberment insurance. A limited form of health insurance that covers accident only. It is the only type of health insurance that covers death. AD&D policies do not follow the principle of indemnity, in that they pay in addition to any other coverage the insured has.

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Adverse selection

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Selection not in favor of the company. The tendency of poorer risks to want insurance more often than standard risks. For example, a person who is already sick would like to buy health insurance

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Adverse underwriting decisions, consumer rights

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Under the Fair Credit Reporting Act, when an adverse underwriting decision is made, the insurance must provide that the applicant or policyholder with specific written reasons for the decision, or advise the individual that specific reasons are available upon request. Upon receipt of a written request, the insurer must furnish specific reasons for the adverse decision and the names and addresses of the sources that provided the information.

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Agent/Producer

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The individual appointed by an insurance company to solicit and negotiate insurance contracts on its behalf. Agents and Producers represent the company, not the client.

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Alien Company

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An insurer organized and domiciled in a country other than the United States.

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Annuitant

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The party receiving the benefits of an annuity, similar to the insured on an insurance policy. The annuitant usually also owns the annuity, although you can buy an annuity to benefit another party, who would then be the annuitant.

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Annuity

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An agreement by an insurer to make periodic payments that continue during the lifetime of assistant(s) or for a specified period. Annuities are considered to be the opposite of life insurance, since annuities pay while you're alive and life insurance pays when you die. Life insurance proceeds create an estate, while annuities are used to liquidate in an estate over a f time. All annuities are insurance products and a life insurance license is required.

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Applicant

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The party making application to the insurance company for the policy. Applicants must provide the ensure with the truth to the best of our knowledge, which is known as "representation."

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Application

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A form on which the prospective insured states facts requested by the insurer and on the basis of which (together with any information for medical examiners, attending physicals, hospitals, investigators, and the produceers) the insurer decides whether or not to accept the risk, modify their coverage offered, or decline the risk. With premium, the application is considered to be an offer to buy. If attached the policy at issue, it becomes part of the Entire Contract.

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Assignee

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The person to whom policy rights are assigned in whole or in part by the policyholder, who is known as the Assignor. On life insurance there are two types of assignments: Absolute and Collateral.

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Assignment

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Transfer of rights in a policy to another party by the policyholder. For example, if you bought a life insurance policy on minor child, you are the owner and the child is the insured. When the child reaches age 21, you should assign all rights of ownership in the policy to the child. This is an absolute assignment.

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Attained age

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The present or current age of the insured. Upon convention, premiums are based on the current age of the insured.

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Authorized company

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An insurer permitted to sell insurance within a state. Must obtain a certificate of authority from the Commissioner or Director of Insurance of every state they sell in.

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Automatic premium loan

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A rider in a life policy authorizing the insurance company to use the cash value to pay premiums not paid by the end of the grace period. May be present in whole life or endowment policies only, never term. This rider is free, but must be selected by the policyowner.

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Aviation clause

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Limits or excludes coverage when the insured is participating in specified types of air travel. Coverage is usually confined to regularly scheduled flights of commercial airlines. Often applies to student pilots.