Insurance Glossary

A B C D E F G H I J K L M
N O P Q R S T U V W X Y Z

At Roger Menard Insurance, we are committed to helping you get the solutions that are right for you, your family, and your business. That means we want you to understand your insurance coverage and the terms used in your policy.

We put this Insurance Glossary together to take some of the jargon out of insurance and help you feel more confident about your insurance decisions.

So if there is any term you are unfamiliar with, please refer to the list below as your helpful guide to learning about insurance. You should keep in mind that terms are defined differently in various policies and are specific to a policy. Should there ever be a difference between the following terms and the insurance policy’s, the terms set out in the policy will govern.

A

Account Value
Under some insurance plans, part of the premium is invested. The account value is the total amount in each investment account.

Accidental death benefit
A benefit that is paid to the beneficiary named by the policy owner if the insured dies from an accident.

Additional insured
A person who is covered by the policy in addition to the named insured.

Adjuster
An insurance representative who determines the extent of damage and/or liability when a claim is submitted.

Agent
A person who is authorized to represent either an insured or an insurer when dealing with insurance matters.

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B

Beneficiary
A person or entity who is entitled to receive the benefits from an insurance policy.

Broker
An insurance broker is a sales representative who sells various types of insurance on behalf of several insurance companies.

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C

Cash Value
Money that accumulates in an insurance policy, which, depending on the plan selected, can be borrowed, used as collateral for a loan, or withdrawn.

Certificate of insurance
A document given to each person insured by a group insurance plan, which explains the insurance coverage.

Claim
A notification to the insurance company that details damages or losses which may be covered by an insurance policy.

Contract of insurance
A legal document confirming the insurance coverage and its term and conditions.

Coinsurance/CoPay
The percentage of each covered expense that a policyholder would pay. For example if the insurance company reimburses 80% of the covered expense, the policyholder would be responsible for paying the remaining 20%.

Convertible policy
A life insurance policy that can be converted, or exchanged, for another policy under certain circumstances.

Coverage
The scope of protection provided by an insurance policy.

Creditor insurance
Insurance that covers the financial responsibilities for a mortgage, loan, or line of credit, when the insured dies or becomes disabled.

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D

Deductible
A specified amount that a person pays before an insurance company pays a claim for loss or damage.

Disability
When a person is unable to work as a result of an accident, injury or sickness.

Dwelling
Premises where a person lives.

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E

Effective date
The date that an insurance policy or a change to a policy takes effect.

Endorsement
A legal document which indicates any changes made to an existing insurance policy.

Estate taxes
Government taxes which are collected from a person’s estate (real and personal property) when he/she dies.

Exclusions
Refers to losses or events that are not covered by the insurance policy.

Expiry date
The date that the insurance coverage ends.

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F

Face Amount
This is a term used frequently in a life insurance policy. It usually refers to the amount shown on the first page of an insurance contract that will be the maximum payable in the case of death.

Financial Underwriting
The process of assessing the client’s insurance needs based on his or her financial needs. Also see Underwriting.

Free Examination Period (Free Look Period)
This is the period of time that the policyholder has to review an insurance policy and return it to the insurer for a full refund of the paid premium (provided that no claim has been made).

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G

Grace Period
This is the period of time following the premium due date, during which an overdue premium may be paid without penalty and the insurance policy remains in force.

Group insurance
Insurance that provides coverage for several people under one contract called a group policy.

Guaranteed premiums
Premiums that remain the same for a specified period of time.

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H

Hazard
A danger or risk.

Health Questionnaire
A form requesting medical information to supplement the information on the application form. This information is required so that the insurer can accurately assess the individual’s application.

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I

Improvements
Additions or changes to a dwelling such as cabinets, carpets, finished basement, sheds, pool and other similar upgrades.

Insurance Charges
This is the amount a person pays for the insurance coverage purchased through a universal life insurance policy. Also see Premium Payment.

Insurability
An individual’s status as an acceptable or unacceptable insurance risk.

Insurer
A company that issues contracts of insurance.

Interest Index-Linked Account
This is an investment account available in some life insurance policies. It produces interest that reflects the increase or decrease for a stock market index or mutual fund.

Investment Account
With a universal life insurance plan, there are investment options available. These include fixed interest accounts with guaranteed returns and interest index-linked accounts with variable returns.

Investment Management Fees
These are the fees charged for the maintenance of investment accounts in a universal life insurance policy.

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L

Level Death Benefit
Under a life insurance policy, the total amount payable at the death of the insured (Face Amount) remains the same for the life of the policy.

Long term care
Provides personal care and some medical care to someone who is unable to carry out the activities of daily living. Long term care is provided either in a person’s home or in a long term care health facility.

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M

Medical Underwriting
The process of assessing wheter a person is insurable based on his/her medical history. Also see Underwriting and Financial Underwriting.

N

Named insured
The person whose life is insured.

Non-cancellable
Some policies cannot be cancelled by the insurer unless premiums are not paid or fraud has been committed.

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O

Occupant
A person who lives in a dwelling.

Occupational Classification
A person’s occupation may be a consideration when assessing an insurance application. Occupations are classified by type and certain occupations may represent additional risks.

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P

Peril
An event which may trigger a damage or loss due to earthquake, fire, lightning, vandalism, theft, and other similar risks.

Permanent insurance
Provides life insurance throughout a person’s lifetime.

Policy
A legal document confirming the insurance coverage and its terms and conditions.

Policy Loan
Under some life insurance policies, if a person has enough Cash Value, he/she can borrow money from his/her own policy.

Policyholder or policy owner
A person who owns the insurance policy.

Pre-existing health condition
An injury, a sickness or a condition that existed before the date that an insurance policy takes effect.

Premium
The amount that a person pays for the insurance.

Premium Payment
The total amount payable for the selected coverage. Also see Insurance Charges.

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R

Reinstatement
Restoring a policy after it has been cancelled.

Renewal
A statement in the policy indicating that the policy may be continued beyond its original term.

Risk
The possibility of damage or loss.

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T

Term insurance
Provides life insurance for a specified period of time.

Terms and Conditions
This refers to the rules, limitations, exclusions and features of an insurance policy, as well as the rights of both the insurance company and the policyholder.

Third party liability
An insurance coverage which insures against an accident that damages someone else’s property, or injures or kills someone else.

Total Investment Value
The sum of returns from individual investment accounts, including positive and negative adjustments.

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U

Underwriting
The process of reviewing, pricing, accepting or rejecting insurance risks.

Underwriters
The people at an insurance company who evaluate and classify the potential degree of risk represented by the proposed insured person.

Universal life insurance
A permanent life insurance plan that provides life insurance and includes a cash value with a wide range of investment options for tax-sheltered growth of the cash value.

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V

Vacant
The status of a dwelling, where no one is living in the dwelling.

W

Waiting period
The period of time between:

  • a submitted insurance application and the acceptance or rejection of that insurance application, or
  • the beginning of a disability and the payment of disability benefits.
Author: car health