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Glossary
Table of Contents
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 | Package Policy: A combination of two or more
individual polices or coverages into a single policy. A homeowners policy,
for example, is a package combining property, liability and theft coverages
for the homeowner.
| Paid-up Insurance: Insurance on which all
required premiums have been paid. The term is frequently used to mean the
reduced paid-up insurance available as a nonforfeiture option.
| Paramedical Examination: Physical
examination of an applicant by a trained person other than a physician.
| Partial Disability: The result of an
illness or injury which prevents an insured from performing one or more of
the functions of his/her regular job.
| Partial Disability: A benefit sometimes
found in disability income policies providing for the payment of reduced
monthly income in the event the insured cannot work full time and/or is
prevented from performing one or more important daily duties pertaining to
his occupation.
| Participating Insurance: Insurance
issued by an insurance company providing participation in dividend
distribution.
| Participating Policy: A life insurance
policy under which the company agrees to distribute to policyholders the
part of its surplus which its Board of Directors determines is not needed at
the end of the business year. Such a distribution serves to reduce the
premium the policyholder had paid. (See also: Policy dividend;
Nonparticipating policy)
| Participating Policy: One under which
the policy owner is entitled to receive shares of the divisible surplus of
the insurer. Such shares are commonly called dividends.
| Pension Benefit
Guaranty Corporation (PBGC): The Federal body responsible for
administering the plan termination insurance program under ERISA.
| Pension Benefits: A series of payments to
be provided in accordance with the plan of benefits.
| Pension Plan: A plan established and maintained
by an employer, group of employers, union or any combination, primarily to
provide for the payment of definitely determinable benefits to participants
after retirement.
| Percentage Participation: A
provision in a health insurance contract that the insurer and insured will
share covered losses in agreed proportions. Also see Coinsurance.
| Peril: The cause of a loss insured against in a
policy.
| Peril: The cause of a possible loss, such as fire,
windstorm, theft, explosion, or riot.
| Permanent Life Insurance: A phrase
used to cover any form of life insurance except term; generally insurance
that accrues cash value, such as whole life or endowment.
| Persistency: A term used to refer to the length
of time insurance remains continuously in force.
| Persistency: The degree to which policies stay
in force through the continued payment of renewal premiums.
| Personal Articles Floater: A form
of coverage designed to meet the needs for insurance on property of a
moveable nature. The coverage usually protects against all physical loss,
subject to special exclusions and conditions. Examples of property covered
include jewelry, furs, silverware, fine arts.
| Personal Injury Protection
(PIP): First-party no-fault coverage in which an insurer pays, within
the specified limits, the wage loss, medical, hospital and funeral expenses
of the insured.
| Personal Lines: Those types of insurance,
such as auto or home insurance, for individuals or families rather than for
businesses or organizations.
| Personal representative:A person
appointed through the will of a deceased or by a court to settle the estate
of one who dies.
| Physical Damage: Damage to or loss of the
auto resulting from collision, fire, theft or other perils.
| Physician's Expense Insurance:
Coverage which provides benefits toward the cost of such services as
doctor's fees for nonsurgical care in the hospital, at home or in a
physician's office, and X-rays or laboratory tests performed outside the
hospital. (Also called Regular Medical expense Insurance.)
| Plan Administrator: The person or persons
controlling the money or property contributed to the plan, usually
designated in the plan agreement.
| Point-of-Service Plans: Often known
as open-ended HMOs or PPOs, these plans permit insureds to choose providers
outside the plan yet are designed to encourage the use of network providers.
| Policy: The printed legal document stating the terms
of the insurance contract that is issued to the policyholder by the company.
| Policy: A contract of insurance.
| 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 Dividend: A refund of part of the
premium on a participating life insurance policy reflecting the difference
between the premium charged and actual experience.
| 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 Reserves: The measure of the funds
that a life insurance company holds specifically for fulfillment of its
policy obligations. Reserves are required by law to be so calculated that,
together with future premium payments and anticipated interest earnings,
they will enable the company to pay all future claims.
| Policy Term: That period for which an insurance
policy provides coverage.
| Policyholder: The person who owns a life
insurance policy. This is usually the insured person, but it may also be a
relative of the insured, a partnership or a corporation.
| Policyholder: A person who pays a premium to an
insurance company in exchange for the insurance protection provided by a
policy of insurance.
| Policyholders' Surplus: Sum left
after liabilities are deducted from assets. Sums such as paid-in capital and
special voluntary reserves are also included in this term. This surplus is
an additional financial protection to policyholders in the event a company
suffers unexpected or catastrophic losses. In effect, it is the financial
base that permits a company to sell insurance.
| Pollution Liability: Exposure to
lawsuits for injury or cleanup costs that result from pollution damage
| Pool: An organization of insurers or reinsurers through
which particular types of risk are underwritten and premiums, losses and
expenses are shared in agreed-upon amounts.
| Pooling
arrangement: An agreement to divide any losses that might occur equally
among two or more people, typically with each paying the average loss.
| Portability: The transfer of pension rights and
credits when a worker changes jobs.
| Preadmission Certification:
Process in which a health care professional evaluates an attending
physician's request for a patient's admission to a hospital by using
established medical criteria.
| Preexisting Condition: A physical
and/or mental condition of an insured which first manifested itself prior to
the issuance of his/her policy or which existed prior to issuance and for
which treatment was received.
| Preexisting Condition: A physical
condition that existed before the effective date of coverage.
| Preferred Provider
Organization (PPO): An arrangement whereby a third-party payer contracts
with a group of medical care providers who furnish services at lower than
usual fees in return for prompt payment and a certain volume of patients.
| Preferred Stock: Evidence of ownership which
entitles the owners to receive dividends from the corporation before the
common stockholders and which usually also provides a prior claim to
corporate assets if the corporation is dissolved.
| Premium: The sum paid by a policyholder to keep an
insurance policy in force.
| Premium finance: allows the insured to pay part of the premium when
coverage takes effect and pay the rest during the policy period.
| Premium Loan: A policy loan made for the
purpose of paying premiums.
| Premium Tax: A tax, imposed by each state, on
the premium income of insurers doing business in the state.
| Prepaid Group Practice Plan: A
plan under which specified health services are rendered by participating
physicians to an enrolled group of persons, with a fixed periodic payment in
advance made by or on behalf of each person or family. If a health insurance
carrier is involved, a contract to pay in advance for the full range of
health services to which the insured is entitled under the terms of the
health insurance contract. Such a plan is one form of Health Maintenance
Organization (HMO).
| Primary Beneficiary: See Beneficiary.
| Primary Insurance: Insurance that pays
compensation for a loss ahead of any other insurance coverages the
policyholder may have.
| Principal Sum: The amount payable in one sum
in the event of accidental death and in, some cases, accidental
dismemberment. When a contract provides benefits for both accidental death
and accidental dismemberment, each dismemberment benefit is an amount equal
to the principal sum or some fraction thereof.
| Probate: The court-supervised process of validating
or establishing a distribution for assets of a deceased including the
payment of outstanding obligations.
| Probate estate That portion of the assets and
liabilities whose distribution is supervised by the courts in the probate
process.
| Probationary Period: A period from the
policy date to a specified time, usually 15 to 30 days, during which no
sickness coverage is effective. It is designed to eliminate a sickness
actually contracted before the policy went into effect.
| Product Liability: legal liability
incurred by a manufacturer, merchant, or distributor because of injury or
damage resulting from the use of its product.
| Product Liability Insurance:
Protection against financial loss arising out of the legal liability
incurred by a manufacturer, merchant, or distributor because of injury or
damage resulting from the use of a covered product.
| Professional Review
Organization (PRO): An organization in which practicing physicians
assume responsibility for reviewing the propriety and quality of health care
services provided under Medicare and Medicaid.
| Proof of Loss: Documentation presented to the
insurance company by the insured in support of a claim so that the insurer
can determine its liability under the policy.
| Proof of Loss: Documentary evidence required
by an insurer to prove a valid claim exists. It usually consists of a claim
form completed by the insured and the insured's attending physician. For
medical expense insurance itemized bills must also be included.
| Property Damage Coverage: An
agreement by an insurance carrier to protect an insured against legal
liability for damage by an insured automobile to the property of another.
| Property Insurance: Insurance providing
financial protection against the loss of, or damage to, real and personal
property caused by such perils as fire, theft, windstorm, hail, explosion,
riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and
civil commotion, and smoke.
| Property Insurance: Provides financial
protection against loss or damage to the insured's property caused by such
perils as fire, windstorm, hail, etc.
| Proration: The adjustment of benefits paid because
of a mistake in the amount of the premiums paid or the existence of other
insurance covering the same accident or disability.
| Proscription:
A claim not covered by an insurance policy because it is filed after the
time required in the language of the contract.
| Prospective Payment: An advancement of
payment for health care charges that are likely to occur.
| Prototype Plan: A standardized plan, approved
and qualified as to its concept by the Internal Revenue Service, which is
made available by life insurance companies, banks and mutual funds for
employers' use.
| Provision: A part (clause, sentence, paragraph,
etc.) of an insurance contract that describes or explains a feature,
benefit, condition, requirement, etc. of the insurance protection afforded
by the contract.
| Proximate Cause: The dominating cause of
loss or damage; an unbroken chain of events between the occurrence and
damage.
| Punitive Damages: a court-awarded amount
that exceeds the economic losses and general damages of a defendant and is
intended solely to punish the plaintiff |
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