Travel Insurance Terms
Accidental Death Benefit (ADB): A benefit in addition to the face amount of a life insurance policy, payable if the insured dies as the result of an accident. Sometimes referred to as “double indemnity.”
Agent: An insurance company representative licensed by the state who solicits, negotiates or effects contracts of insurance, and provides service to the policyholder for the insurer.
Annuitant: The person during whose life an annuity is payable, usually the person to receive the annuity.
Annuity: A contract that provides an income for a specified period of time, such as a number of years or for life.
Application: A signed statement of facts made by a person applying for life insurance and then used by the insurance company to decide whether or not to issue a policy. The application becomes part of the insurance contract when the policy is issued.
Beneficiary: The person or persons designated to receive the benefits of a policy or plan when the insured dies.
Benefits: The amount payable by the insurance company to a claimant, assignee or beneficiary under each coverage.
Cancellation: The discontinuance of an insurance policy before its normal expiration date, either by the insured or the company.
Claim: A request for payment of a loss which may come under the terms of an insurance contract.
Contract: A binding agreement between two or more parties for the doing or not doing of certain things. A contract of insurance is embodied in a written document called the policy.
Conversion Privilege: A privilege granted in an insurance policy to convert to a different plan of insurance without providing evidence of insurability.
Coverage: The scope of protection provided under a contract of insurance; any of several risks covered by a policy.
Death Benefit: A payment made to a designated beneficiary upon the death of the insured.
Effective Date: The date on which the insurance under a policy begins.
Evidence of Insurability: Any statement of proof of a person’s physical condition and/or other factual information affecting his/her acceptance for insurance.
Face Amount: The amount stated on the face of the policy that will be paid in case of death or at the maturity of the policy. It does not include additional amounts payable under accidental death or other special provisions, or acquired through the application of policy dividends.
Fixed Annuity: Annuity whose periodic payment is a guaranteed fixed amount.
Insurance: Protection by written contract against the financial hazards (in whole or in part) of the happenings of specified fortuitous events.
Insurance Company: Any corporation primarily engaged in the business of furnishing insurance protection to the public.
Insured: A person covered by an insurance policy.
Insurer: The party to the insurance contract who promises to pay losses or benefits. Also, any corporation engaged primarily in the business of furnishing insurance to the public.
Lapse: The termination or discontinuance of an insurance policy due to non-payment of a premium.
Level Premium: A premium which remains unchanged throughout the life of a policy.
Mode of Premium Payment: The frequency with which premiums are paid monthly, quarterly, semiannually, or annually.
National Association of Insurance Commissioners (NAIC): The association of insurance commissioners of various states formed to promote national uniformity in the regulation of insurance.
Paid-up Insurance: Insurance on which all required premiums have been paid.
Policy: The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract.
Policy Loan: A loan made by a life insurance company from its general funds to a policyholder on the security of the cash value of a policy.
Policy Term: That period for which an insurance policy provides coverage.
Policy owner: The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured.
Premium: The sum paid by a policyholder to keep an insurance policy in force.
Qualified Plan: A plan which the Internal Revenue Service approves as meeting the requirements of Section 401(a) of the 1954 Internal Revenue Code. Such plans receive tax advantages.
Reinstatement: The resumption of coverage under a policy which has lapsed.
Reinsurance: The acceptance by one or more insurers, called reinsurers, of a portion of the risk underwritten by another insurer who has contracted for the entire coverage.
Renewable Term Insurance: Term insurance which can be renewed at the end of the term, at the option of the policyholder and without evidence of insurability, for a limited number of successive terms. The rates increase at each renewal as the age of the insured increases.
Rider: A document which amends the policy or certificate. It may increase or decrease benefits, waive the condition of coverage or in any other way amend the original contract.
Surrender Charge: An amount retained by the issuer of a life insurance policy when a policy is canceled, typically assessed only during the first five to ten years of a policy.
Term Insurance: Life insurance payable to a beneficiary only when an insured dies within a specified period.
Underwriting: The process of selecting risks for insurance and determining in what amounts and on what terms the insurance company will accept the risk.
Waiver of Premium (WP): A provision in some policies to relieve the insured of premium payments falling due during a period of continuous total disability that has lasted for a specified length of time, such as three or six months.
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