Personal Finance

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Insurance

Back 1

Protection against possible financial.

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Insurance Company

Back 2

A risk-sharing firm that assumes financial responsibility for losses that may result from an incurred risk.

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Insurer

Back 3

An insurance company

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Policy

Back 4

A written contract for insurance

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Premium

Back 5

The amount of money a policyholder is charged for an insurance policy.

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Insured

Back 6

A person covered by an insurance policy.

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Policyholder

Back 7

A person who owns an insurance policy

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Risk

Back 8

Chance or uncertainty of loss

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Peril

Back 9

THe cause of possible loss

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Hazard

Back 10

A factor that increases the likelihood of loss through some peril.

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Pure Risk

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A risk in which there is only a chance of loss; also called INSURABLE RISK

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Speculative Risk

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A risk in which there is a chance of either loss or gain

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Self-Insurance

Back 13

The process of establishing a monetary fund to cover the cost of loss

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Liability

Back 14

Legal responsibility for the financial cost of another persons losses or injuries

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Negligence

Back 15

Failure to take ordinary or reasonable care in a situation.

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Strict Liability

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A situation in which a person is held responsible for intentional or unintentional actions.

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Vicarious Liability

Back 17

A situation in which a person is held legally responsible for the actions of another person.

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Homeowner's Insurance

Back 18

Coverage for a place of residence and its associated financial risks.

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Personal Property Floater

Back 19

Additional property insurance to cover the damage or loss of specific item of high value.

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Household Inventory

Back 20

A list or other documentation of personal belongings, with purchase dates and cost information.

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Umbrella Policy

Back 21

Supplementary personal liability coverage.

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Medical Payments Coverage

Back 22

Home insurance that pays the cost of minor accidental injuries on one's property.

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Endorsement

Back 23

An addition of coverage to a standard insurance policy.

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Coinsurance Clause

Back 24

A policy provision that requires a homeowner to pay for part of the losses if the property is not insured for the specified percentage of the replacement value.

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Actual Cash Value (ACV)

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A claim settlement method in which the insured receives payment based on the current replacement cost of a damaged or lost item, less depreciation.

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Financial Responsibility Law

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State legislation that requires drivers to prove their ability to cover the cost of damage or injury caused by an automobile accident.

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Bodily Injury Liability

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coverage for the risk of financial loss due to legal expenses, medical costs, lost wages, and other expenses associated with injuries caused by an automobile accident for which the insured was responsibility

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Medical Payments Coverage

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Automobile insurance that covers medical expenses for people injured in one's car or as a pedestrian

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Uninsured Motorist's Protection

Back 29

Automobile insurance coverage for the cost of injuries to a person and members of his or her family caused by a driver with inadequate insurance or by a hit-and-run driver.

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No-fault system

Back 30

An automobile insurance program in which drivers involved in accidents collect medical expenses, lost wages, and related injury costs from their own insurance companies.

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Property damage liability

Back 31

Automobile insurance coverage that protects a person against financial loss when that person damages the property of others.

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Collision

Back 32

Automobile insurance that pays for damage to the insured's car when it is involved in an accident.

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Comprehensive Physical Damage

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Automobile insurance that covers financial loss from damage to a vehicle caused by a risk other than a collision, such as fire, theft, glass breakage, hail, or vandalism.

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Rating territory

Back 34

The place of residence used to determine a person's automobile insurance premium.

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Driver Classification

Back 35

A category based on the driver's age, sex, marital status, driving record, and driving habits; used to determine automobile insurance rates.

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Assigned Risk Pool

Back 36

Consists of people who are unable to obtain automobile insurance due to poor driving or accident records and must obtain coverage at high rates through a state program that requires insurance companies to accept some of them.

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Coordination of Benefits

Back 37

A method of integrating the benefits payable under more than one health insurance plan.

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Hospital Expense Insurance

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Pays part or all of hospital bills for room, board, and other charges.

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Surgical Expense Insurance

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Pays part or all of the surgeon's fees for an operation.

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Physician Expense Insurance

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Provides benefits for doctors' fees for non surgical care, x rays and lab tests.

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Basic Health Insurance Coverage

Back 41

Combination of hospital expense insurance, surgical expense insurance, and physician expense insurance.

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Major Medical Expense Insurance

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Pays most of the costs exceeding those covered by the hospital, surgical, and physician expense policies.

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Deductible

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An amount of insured must pay before benefits become payable by the insurance company.

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Coinsurance

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A provision under which both the insured and the insurer share the covered losses.

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Stop-loss

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A provision under which an insured pays a certain amount, after which the insurance company pays 100 percent of the remaining covered expenses.

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Comprehensive major medical Insurance

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A type of major medical insurance that has a very low deductible and is offered without a separate basic plan.

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Hospital Indemnity Policy

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Pays stipulated daily, weekly, or monthly cash benefits during hospital confinement.

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Long Term care Insurance (LTC)

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Provides day-in, day-out care for long-term illness or disability.

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Copayment

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A provision under which the insured pays a flat dollar amount each time a covered medical service is received after the deductible has been met.

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Blue Cross

Back 50

An independent, non profit corporation that provides protection against the cost of hospital care.

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Blue Shield

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An independent, nonprofit membership corporation that provides protection against the cost of surgical and medical care.

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Managed care

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Prepaid health plans that provide comprehensive health care to members.

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Health Maintenance Organization (HMO)

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A health insurance plan that provides a wide range of health care services for a fixed, prepaid monthly premium.

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Preferred Provider Organization (PPO)

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A group of doctors and hospitals that agree to provide health care at rates approved by the insurer.

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Exclusive Provider Organization (EPO)

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Renders medical care from affiliated health care providers.

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Point-of-service plan (POS)

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A network of selected contracted, participating providers.

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Medigap (MedSup) insurance

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Supplements Medicare by filing the gap between Medicare payments and medical costs not covered by Medicare.

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Disability Income Insurance

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Provides payments to replace income when an insured person is unable to work.

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Nonparticipating Policy

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Life insurance that does not provide policy dividends

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Participating Policy

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Life insurance that provides policy dividends.

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Term Insurance

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Life insurance protection for a specified period of time

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Whole life policy

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An insurance plan in which the policyholder pays a specified premium each year for as long as he or she lives

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Cash Value

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The amount received after giving up a life insurance policy

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Universal Life

Back 64

A whole life policy that combines term insurance and investment elements.

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Beneficiary

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A person designated to receive something, such as life insurance, from the insured.

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Nonforfeiture Clause

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A provision that allows the insured not to forfeit all accrued benefits.

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Incontestability Clause

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A provision stating that the insurer cannot dispute the validity of a policy after a specified period.

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Suicide Clause

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A provision stating that if the insured dies by suicide during the first 2 years the policy is in force, the death benefit will equal the amount of the premium paid.

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Rider

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A document attached to a policy that modifies its coverage.

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Double indemnity

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A benefit under which the company pays twice the face value of the policy if the insured's death results from an accident.

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Chartered Life Underwriter (CLU)

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A life insurance agent who has passed a series of college-level examinations on insurance and related subjects.

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Interest-adjusted index

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A method of evaluating the cost of life insurance by taking into account the time value of money.

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Annuity

Back 73

A contract that provides a regular income for as long as the person lives.