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Glossary
Table of Contents
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 | Damage to Property of Others:
Damage covered up to $500 per occurrence for an insured who damages
another's property. Payment is made despite the lack of legal liability.
Coverage is included in Section II of the homeowners policy.
| Death Benefit: A payment made to a designated
beneficiary upon the death of the employee annuitant.
| Debenture: A bond that is backed only by the
general credit of the issuing corporation. No specific property is pledged
as security behind the loan.
| Declarations: Statements in an insurance
contract that provide information about the property or life to be insured
and used for underwriting and rating purposes and identification of the
property or life to be insured.
| Declination: The insurer's refusal to insure an
individual after careful evaluation of the application for insurance and any
other pertinent factors.
| Deductible: An amount which a policyholder agrees
to pay, per claim or per accident, toward the total amount of an insured
loss.
| Deferred Annuity: An annuity providing for
the income payments to begin at some specified future date.
| Deferred Compensation: Arrangements by
which compensation to employees for past or current services is postponed
until some future date.
| Deferred Group Annuity: A type of
group annuity providing for the purchase each year of a paid-up deferred
annuity for each member of the group, the total amount received by the
member at retirement being the sum of these deferred annuities.
| Defined Benefit Plan: A pension plan
stating either (1) the benefits to be received by employees after retirement
or (2) the method of determining such benefits. The employer's contributions
under such a plan are actuarially determined.
| Defined Contribution Plan: A plan
under which the contribution rate is fixed and benefits to be received by
employees after retirement depend to some extent upon the contributions and
their earnings.
| Dental Insurance: Individual or group plan
that helps pay costs of normal dental care as well as damage to teeth from
an accident.
| Demutualization:
the process of changing the legal structure of an insurance company from a
mutual form of ownership to a stock form of ownership.
| Dependency Period: Period of time
following the readjustment period during which the surviving spouse's
children are under eighteen and therefore dependent of the parent.
| Dependent Benefits: Social Security
benefits available to the spouse or children of a Social Security
beneficiary.
| Deposit Administration
Group Annuity: A type of group annuity providing for the accumulation of
contributions in an undivided fund out of which annuities are purchased as
the individual members of the group retire.
| Deposit Premium: The premium deposit paid by
a prospective policy holder when an application is made for an insurance
policy. It is usually equal, at least, to the first month's estimate premium
and is applied toward the actual premium when billed.
| Deposit Term Insurance: A form of
term insurance, not really involving a "deposit," in which the
first-year premium is larger than subsequent premiums. Typically, a partial
endowment is paid at the end of the term period. In many cases the partial
endowment can be applied toward the purchase of a new term policy, or,
perhaps, a whole life policy.
| Depreciation: A decrease in the value of
property over a period of time due to wear and tear or obsolescence.
Depreciation is used to determine the actual cash value of property at time
of loss. (See Actual Cash Value)
| Diagnosis-Related Groups (DRGs):
System that reimburses health cared providers fixed amounts for all care
given in connection with standard diagnostic categories.
| Difference in
Conditions Insurance (DIC): "All-risks" policy that covers
other perils not insured by basic property insurance contracts, supplemental
to and excluding the coverage provided by underlying contracts.
| Direct Loss: Financial loss that results
directly from an insured peril.
| Direct Placement: Sale of an entire issue
of bonds or stock by the issuer to one or a few large institution customers
such as an insurance company without trying to market the issue publicly.
| Direct Premiums Written: Property
and casualty insurance premiums written (less return premiums), without any
allowance for premiums for assumed or ceded reinsurance.
| Direct Response System: A marketing
method where insurance is sold without the services of an agent. Potential
customers are solicited by advertising in the mail, newspapers, magazines,
television, radio, and other media.
| Direct Writer: The industry term for a company
which uses its own sales employees to write its policies. Sometimes refers
to companies which contract with exclusive agents.
| Direct Written Premiums: see Direct
Premiums Written
| Directors' and Officers' Liability:
the exposure of corporate managers to claims from shareholders, government
agencies, and employees, and others alleging mismanagement.
| Disability: a physical or a mental impairment
that substantially limits one or more major life activities of an
individual. It may be partial or total. (See Partial Disability; Total
Disability.)
| Disability Benefit: Periodic payments,
usually monthly, payable to participants under some retirement plans, if
such participants are eligible for the benefits and become totally and
permanently disabled prior to the normal retirement date.
| Disability Benefit: A feature added to
some life insurance policies providing for waiver of premium, and sometimes
payment of monthly income, if the policy holder becomes totally and
permanently disabled.
| Disability Income Insurance: A
form of health insurance that provides periodic payments to replace income
when an insured person is unable to work as a result of illness, injury, or
disease.
| Disability Insured: Status of an
individual who is insured for disability benefits under the Old-Age,
Survivors, and Disability Insurance (OASDI) program. The covered person must
be fully insured and have at least twenty quarters of coverage out of the
last forty, ending with the quarter in which the disability occurs. Fewer
quarters are required for persons under age thirty.
| Disappearing Deductible: Deductible
in an insurance contract that provides for a decreasing deductible amount as
the size of the loss increases, so that small claims are not paid but large
losses are paid in full.
| Dismemberment: Loss of body members (limbs),
or use thereof, or loss of sight due to injury.
| Dismemberment Insurance: A form of
health insurance that provides payment in case of loss by bodily injury of
one or more body members (such as hands or feet) or the sight of one or both
eyes.
| Disposable Personal Income: The
personal income less personal tax and nontax payments. It is the income
available to people for spending and saving.
| Diversifiable risk: risk that can be eliminated by investors by holding
diversified portfolios
| Dividend: A return of part of the premium on
participating insurance to reflect he difference between the premium charged
and the combination of actual mortality, expense and investment experience.
Such premiums are calculated to provide some margin over the anticipated
cost of the insurance protection.
| Dividend: (1) An amount returned to a policyholder
by an insurance company out of its earnings. (2) In capital stock companies,
a share of the profits distributed to stockholders.
| Dividend: Portion of the premium which is returned
to the insured because of favorable experience by the company.
| Dividend: A policy holder's share in the insurer's
divisible surplus fund apportioned for distribution, which may take the form
of a refund of part of the premium on a participating policy. The term is
also used for a stockholder's share of the portion of a corporation's
earnings that is distributed in cash or additional stock.
| Dividend Addition: An amount of paid-up
insurance purchased with a policy dividend and added to the face amount of
the policy.
| Doctrine of reasonable expectations: a legal doctrine that holds policies
will be interpreted according to how a reasonable person who is not trained
in the law would expect
| Dollar Threshold: In no-fault auto
insurance states with the dollar threshold, it prevents individuals from
suing in tort to recover for pain and suffering unless their medical
expenses exceed a certain dollar amount.
| Domestic Insurer: An insurance company is a
domestic company in the state in which it is incorporated.
| Donor: The person making a gift.
| Double Indemnity: A policy provision
usually associated with death, which doubles payment of a designated benefit
when certain kinds of accidents occur.
| Double Indemnity: Payment of twice the
policy's normal benefit in case of loss resulting from specified causes or
under specified circumstances.
| Dramshop Law: Law that imputes negligence to
the owner of a business that sells liquor in the case that an intoxicated
customer causes injury or property damage to another person. Usually
excluded from general liability policies.
| Dread Disease Insurance: Insurance
providing an unallocated benefit, subject to a maximum amount, for expenses
incurred in connection with the treatment of specified diseases, such as
cancer, poliomyelitis, encephalitis and spinal meningitis.
| Driver Education Credit: Student
discount or reduction in premium amount for which young drivers become
eligible on completion of a driver education course.
| Duplication of Benefits: Overlapping
or identical coverage of the same, insured under two or more health plans,
usually the result of contracts of different insurance companies, service
organizations, or pre-payment plans; also known as multiple coverage.
| Dwelling Property 1: Property insurance
policy that insures the dwelling at actual cash value, other structures,
personal property, fair rental value, and certain other coverages. Covers a
limited number of perils.
| Dwelling Property 2: Property insurance
policy that insures the dwelling and other structures at replacement cost.
It adds additional coverages and has a greater list of covered perils than
the Dwelling Property 1 policy.
| Dwelling Property 3: Property insurance
policy that covers the dwelling and other structures against direct physical
loss from any peril except for those perils otherwise excluded. However,
personal property is covered on a named-perils basis. |
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