Insurance Glossary

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Accident Insurance Accident insurance is an insurance policy in the event of accidental bodily injury or death.
Accident Only Accident Only is a type of insurance policy or rider that only pays the death benefit in case of accidental death.
Accidental Death & Dismemberment (AD&D) Accidental Death & Dismemberment (AD&D) is an insurance policy or rider that only pays the death benefit in case of accidental death or dismemberment (loss of limbs, sight, hearing, etc.).
Accumulation Period The accumulation period is a time period when investment contributions are made or paid in an annuity or toward eligible medical expenses towards deductibles.
Actual Cash Value Actual cash value is the net amount of money accumulated from the growth of an investment (usually life insurance) after fees and surrender changes have been deducted.
Actuary An actuary is a person who calculates and analyzes statistics and uses them to assess risks and set premiums.
Affordable Care Act (ACA) The Affordable Care Act is a federal law passed in 2010 also known as Obamacare. The law provides consumers with tax credit subsidies to lower healthcare costs, expanded health care coverage and preventative care. It also expanded Medicaid.
Annual Statement An annual statement is the overview of the previous year’s debits and credits for an insurance policy.
Annuitant An annuitant is an individual who is the beneficiary of an annuity contract.
Annuity An annuity is a tax-deferred vehicle used to grow funds over time for consistent income and wealth accumulation.
Assisted Living Care Assisted Living Care is a setting where either elderly or impaired persons can be given the care needed while still living as independently as possible.


Beneficiary A beneficiary is the person or entity designated by the insurance policy owner to receive the benefit upon the filing of a claim.
Broker A broker is the person who facilitates a sale between the insured and the carrier.
Broker Dealer (BD) A broker dealer (BD) is a firm or individual who buys and sells securities for clients.
Brokerage General Agency (BGA) A Brokerage General Agency is an independent firm or contractor working for an insurance company. A BGA’s main role is to sell/market one or more insurance products to select insurance brokers. (read more)
Business Owner’s Policy (BOP) A Business Owner’s Policy (BOP) combines protection for all major property and liability risks into one insurance package.
Buy-Sell Agreement Buy-sell agreements are legal contracts defining how to handle a partner’s shares in a company should said partner pass away or leave the company.


Captive Agent Captive Agents are insurance agents who work for one firm exclusively and cannot promote other carrier products..
Chartered Life Underwriter (CLU) A Chartered Life Underwriter® (CLU®) is a financial professional designation from the American College. Anyone who holds this designation has passed an 8-week course program and has in-depth knowledge of life insurance.
Claim A claim is a request from an insurance policyholder for coverage for a policy event.
Commission .Commission is the compensation paid to insurance brokers for selling carrier products to a client.
Copay Copay is the amount of money a patient is responsible for at the time of service when receiving medical attention or purchasing prescriptions.
Credit Risk Credit risk is the risk a lender takes on in such a case where a borrower might fail to pay back a loan.
Critical Illness Insurance Critical illnesses insurance products relieve the financial burden by paying a lump sum benefit if the insured person is diagnosed with an illness or undergoes certain procedures. (read more)


Date of Issue Date of Issue is the date a policy is issued by the carrier.
Deductible A deductible is the insured’s portion of the claim that is his/her responsibility to pay.
Deferred Annuity In a deferred annuity, the client defers making the ultimate decision on payouts until some later date.
Dental Insurance Dental insurance is an insurance policy that will cover specified dental work.
Dental Maintenance Organization (DMO) A dental maintenance organization (DMO) is a low-cost dental plan that features no deductibles or annual maximums.
Disability Income Disability Income is Insurance that provides income for those who cannot work due to disability, either from accident or sickness.
Disability Insurance Disability insurance provides income in the event of a loss of income due to disability, from sickness or accident. (read more)


Earned Premium Earned premium is the premium collected for part of the policy which has expired.
Effective Date The effective date is the date a policy becomes effective and coverage begins.
Employers Liability Employers liability is an insurance policy for injuries or illness not covered by worker’s compensation.
ERISA (Employee Retirement Income Security Act of 1974) ERISA (Employee Retirement Income Security Act of 1974) is the federal law that sets minimum standards for private industry retirement and health plans to protect individuals enrolled in them.
Errors and Omissions Liability (E&O) Errors and Omissions Liability (E&O) insurance is liability protection against losses not covered by traditional liability insurance. It protects businesses and individuals from claims if a client sues for an error or omission committed resulting in a financial loss to the client.


Fidelity Bond A fidelity bond is a form of business insurance that protects employers from employees who commit fraudulent or dishonest actions
Field Marketing Organization (FMO) A Field Marketing Organization (FMO) provides support, product choices, and services to independent insurance agents and agencies.
Final Expense Coverage Final expense coverage is a smaller permanent life insurance policy typically intended to help older adults cover funeral costs and other end of life expenses.
Financial Advisor A financial advisor is a financial professional who provides expert advice regarding investments and money management.
Financial Planner A financial planner is a professional who helps clients with their financial goals and makes recommendations.
Financial Statement A rendering of a person or firm’s revenue, expenses, assets, and liabilities.
Fixed Annuity A type of annuity policy that pays a guaranteed interest rate for a fixed period of time.


Group Annuity An annuity with multiple annuitants. Typically created as an employer benefit.
Group Benefits Group Benefits are package group insurance plans offered by a company to provide different types of coverage i.e. Medical, Dental, Vision and Life to become more competitive in the job market in terms of attracting and retaining talent.
Group Dental Insurance Group dental insurance is an employer-sponsored dental policy that is optional for employees to enroll in. In other words, a business or other employer purchases a dental insurance policy and offers coverage under the policy to employees. (read more)
Group Disability Insurance Group disability insurance is a type of insurance policy offered by an employer as a benefit to employees. As with individual disability insurance, group disability insurance supplements income should an employee be deemed unable to work due to injury or illness. (read more)
Group Health Group health is an employer plan insurance policy written to cover multiple employees.
Group Insurance A group insurance policy is a plan offered by a company to provide different types of coverage i.e. Medical, Dental, Vision and Life. These plans allow employees and owners to sign up for a group policy, as long as they are working full-time. (read more)
Group Life Insurance Group life insurance is a type of life insurance product offered by an employer to employees. In other words, a business or other employer purchases a life insurance policy and extends coverage to its employees.
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Group Vision Insurance Group vision serves as a supplement to a group medical policy and can help employees offset expenses related to eye care that they would typically pay out-of-pocket. (read more)
Guaranteed Issue Guaranteed issue is a requirement that insurance plans must permit you to enroll regardless of health status, age, gender or other factors.


Health Insurance Health insurance is insurance that covers a portion of medical costs for a policyholder.
Health Insurance Portability and Accountability Act (HIPAA) The Health Insurance Portability and Accountability Act (HIPPA) law provides a uniform, basic level of security and privacy for individual personal health information.
Health Maintenance Organization (HMO) A Health Maintenance Organization (HMO) is a health insurance plan in which the insured individual must choose a designated physician and get referrals before visiting specialists.


Immediate Annuity An immediate annuity is an immediate guaranteed stream of monthly income for a specified period. Buyers can choose monthly, quarterly, or annual income. An immediate annuity is also known as a single-premium immediate annuity (SPIA) or an income annuity.
Independent Agent An independent agent is an insurance agent who represents more than one company and can compare options for their clients thereby providing them an independent analysis.
Index Annuity An index annuity is an annuity that tracks various indices, as a way to establish the performance of the annuity.
Individual Health Individual health is medical insurance purchased on an individual basis rather than an employer.
Individual Retirement Account (IRA) An Individual Retirement Account (IRA) is a retirement savings account with tax advantages.
Individual Retirement Annuity An individual retirement annuity is an insurance contract that works like an IRA with limits on annual contributions.
Insurability Insurability is the status of being acceptable to be insured by a carrier.
Insurance Agent An insurance agent is a person or organization who/that solicits, negotiates or instigates insurance contracts on behalf of an insurer and can be independent or an employee of the insurer.
Insurance Broker An insurance broker is a person who is licensed to sell insurance may work with several insurance carriers to offer a variety of insurance products often at better rates.
Insurance Insurance is a contract for financial protection against losses purchased as a contract by a person or entity.
Insured The insured is specific individual assessed for risks in the underwriting process when purchasing an insurance policy to which coverage applies.
Insurer An insurer is the company/carrier that underwrites the insurance risk..
Investment Advisor An investment advisor is a person or firm who makes financial recommendations for a fee.
Investment Advisory Representative (IAR) An Investment Advisory Representative (IAR) is a person who works for an investment advisory company (RIA or BD) and provides investment related advice for a fee.



Key Persons Insurance Key persons insurance is insurance coverage that protects a business against potential financial loss caused by the death of an owner or employee who is critical to the success & profitability of the business. (read more)
Keyman Insurance Keyman insurance is insurance coverage that protects a business against potential financial loss caused by the death of an owner or employee who is critical to the success & profitability of the business.


Lapse A lapse is the status of a policy that has become inactive due to non-payment of premiums.
Liability A liability is a legal responsibility, usually involving financial obligation.
Life Insurance Life insurance is the most cost-effective option to guard against the repercussions of an unexpected death of a loved one or business partner. (read more)
Life Insurance Premium Financing Life Insurance Premium Financing is a process when a high net worth individual takes out a loan from a third party to pay the premiums for a life insurance policy.
Life Settlements Life settlements are a process whereby a third party purchases the value of a life insurance policy from the policy owner and the third party is paid the death benefit upon the death of the insured.
Living Benefits Rider A living benefits rider is an option on a life insurance policy or annuity which allows for advanced payment of death benefits during the policy owner’s lifetime.
Long Term Care (LTC) Long term care (LTC) is Insurance coverage for individuals who need assisted living, nursing home care, home health care, or adult daycare for those individuals with chronic conditions as defined by the policy.


Mandated benefits Mandated benefits are benefits health care plans are legally required to provide.
Medicaid Medicaid is the federal and state-administered program that helps provide healthcare coverage to low-income Americans, including eligible adults, children, pregnant women, elderly adults, and those with disabilities.
Medicare Advantage Plan Medicare Advantage Plan is a health insurance plan which provides Medicare benefits through a private-sector health insurance carrier.
Medicare Part D Medicare Part D is the portion of Medicare that encompasses prescription drug plans.
Medicare Supplement Medicare Supplement is private insurance that covers the out-of-pocket expenses that Medicare Parts A & B do not cover.
Medicare Medicare is the federal health insurance program for people over 65, certain younger people with qualifying disabilities, and those with End Stage Renal Disease.
Minimum Premium Plan Minimum Premium Plan is an insurance plan where the employer and employee agrees the employer will pay all claims up to a specific amount and the employee (insured) will pay anything above and beyond the agreed-upon amount.
Morbidity Risk Morbidity risk is the statistical likelihood that an individual will develop a disease depending on factors like gender or age.
Morbidity Table A morbidity table is a statistical table that shows the pool of individuals that will become ill or injured at various ages.
Multi-Year Guaranteed Annuity (MYGA) A MYGA (Multi-Year Guaranteed Annuity) is a type of fixed annuity with a guaranteed fixed interest rate for a period of time typically from three to 10 years.


Named Insured The person or entity designated as the insured on an insurance policy. See Insured.
National Association of Insurance Commissioners (NAIC) The National Association of Insurance Commissioners is the U.S. support organization dedicated to serving the nation’s state insurance regulators regarding standard-setting and regulations.
Non-Participating Whole Life Non-participating whole life insurance policies have all the same guarantees but forgo the non-guaranteed dividends of participating whole life plans. These plans are structured with a cash value accumulation rate determined when the policy is issued.



Participating Whole Life Participating whole life policies have additional non-guaranteed cash value in addition to the premiums paid into the policy via dividends. Participating whole life plans include a dividend at a crediting rate set by the carrier issuing the policy. Dividends can have a variety of uses within the policy and are not guaranteed.
Permanent Life Insurance Life insurance plans that provide coverage throughout a person’s lifetime.
Policy Period The period of time for which an insurance policy provides the contracted coverage.
Policy An individual insurance plan purchased to cover the risks of the named insured.
Preferred Provider Organization (PPO) Health insurance plans that provide coverage nationwide and allow you to visit specialists without needing a referral.
Premium A premium is the amount of money paid by the insured to the carrier to maintain the active status of coverage.



Registered Investment Advisor (RIA) A registered investment advisor (RIA) is an individual or firm registered with the SEC who advises clients on securities investments. They may also manage investment portfolios.
Rider A rider is optional additional benefits added to an insurance policy. Rates for insurance coverage are adjusted per rider added to a plan. Examples include child term riders, guaranteed insurability, own occupation, etc.
Risk Assessments Risk assessment is the process of identifying risk for losses on investments.
Roth IRA A Roth IRA is a type of individual retirement account that allows tax-free qualified withdrawals as they are funded with after tax dollars.


Short Term Disability Short term disability are periods of disability that typically last six months or less and may extend up to 2 years.
Short Term Medical Short term medical is temporary emergency medical coverage for when someone is between health care plans.
Short Term Health Insurance (STM) Short Term Health Insurance (STM) is insurance that covers essential health benefits at an affordable cost when a person has a temporary gap in group coverage.
Single Premium Immediate Annuity (SPIA) A Single Premium Immediate Annuity (SPIA) is an immediate guaranteed stream of monthly income for a specified period. Buyers can choose monthly, quarterly, or annual income. An immediate annuity is also known as a single-premium immediate annuity (SPIA) or an income annuity.
Surrender Charge A surrender charge is a fee assessed when a life insurance policyholder cancels their policy.


Term A term is the length of time a plan is in force. Term insurance generally runs on 5-year or 10-year intervals. However, some carriers write plans based on a one-year length of time. Terms can be anywhere from 1 to 40 years depending on the carrier and the age of the client.
Term Insurance Term insurance are life insurance plans that provide coverage for a specific, designated time period.
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Travel Coverage Travel coverage insurance is insurance coverage for losses while traveling.
Travel Insurance Travel insurance is insurance designed to cover losses associated with travel domestic and abroad.


Underwriter The underwriter is an individual responsible for overseeing the underwriting process.
Underwriting Risk Underwriting Risk is the risk of inaccurate assessments when writing an insurance policy.
Underwriting Underwriting is the process in which an underwriter reviews various factors to evaluate risks and determine a reasonable cost for specific coverage.
Universal Life Insurance Universal life insurance policies are permanent life insurance products that include a cash value savings component. The cash values savings component is an additional premium above the cost of the insurance.


Variable Annuity A variable annuity is an annuity with underlying subaccounts whereby value is based on the performance of the subaccounts.
Variable Life Insurance Variable Life Insurance is permanent life insurance policy securities contract with separate accounts made up of various investment vehicles.
Variable Universal Life (VUL) Variable Universal Life is type of permanent life insurance policy with a cash values subaccount for investment with the goal to produce greater returns.
Viatical Settlement A viatical settlement is the process for terminally ill policy holder to sell their life insurance policy at a discount from its face value for cash in lieu of a beneficiary payment.
Vision Insurance Insurance coverage with benefits including preventative eye exams, ophthalmologist visits, glasses, and contacts.


Whole Life Insurance Whole life insurance offers the strongest guarantees of any life insurance product. There is both a guaranteed death benefit and guaranteed cash value offered. Whole life comes in two basic forms: participating and non-participating.