Our insurance terms glossary is divided alphabetically by insurance terms in a quick reference guide to assist understanding the language commonly used by insurance companies. Policy documents contain a number of insurance terms because they typically define the limitations of risk and liability on the insured and any exclusions of coverage.
If you plan to start a new policy or renew your current policy with a carrier or agency, it is important to review and understand the policy differences behind individual quotes from multiple carriers. Lower policy premiums may be the result of decreased payout benefits, higher deductibles, or maximum damages allowed. It is important to identify these unique features in any policy comparison, otherwise a lower price may come at a much higher cost when you have to file a claim for loss or damages in the future.
Retirement of a participant prior to the normal retirement date, usually with a reduced amount of annuity. Early retirement is generally allowed at any time during a period of 5 to 10 years preceding the normal retirement date.
Early And Periodic Screening, Diagnostic, And Treatment (EPSDT)
EPSDT benefits provide comprehensive and preventive healthcare services for children who are enrolled in Medicaid.
Employment income derived from salary, wages, commissions, or fees.
The portion of a premium that is the property of an insurance company, based on the expired portion of the policy period. For example, an insurance company is considered to have earned 75 percent of an annual premium after a period of nine months of an annual policy has elapsed.
Determination of the amount of Social Security benefits payable to a beneficiary after adjusting for earnings.
The estimated total cost, both insured and uninsured, of mishaps (such as motor vehicle accidents, work accidents, and fires); includes such factors as property damage, funeral expenses, wage loss, insurance administration costs, and medical, hospital and legal costs.
Special type of participating whole life insurance in which the dividends are used to buy term insurance or paid-up additions equal to the difference between the face amount of the policy and some guaranteed amount.
The date on which the insurance under a policy begins.
Elements Of A Negligent Act
Four elements an injured person must show to prove negligence: existence of a legal duty to use reasonable care, failure to perform that duty, damages or injury to the claimant, and proximate cause relationship between the negligent act and the infliction of damages.
The date on which an individual member of a specified group becomes eligible to apply for insurance under a group life or health insurance plan.
A specified length of time, such as one month, following the eligibility date, during which an individual member of a particular group will remain eligible to apply for insurance under a group life or health insurance policy without evidence of insurability.
For retirement plans, (1) the conditions which an employee must satisfy to participate in a retirement plan, for instance completion of 1 to 3 years of service with the employer, the attainment of a specified age, such as 25, or (2) conditions which an employee must satisfy to obtain a retirement benefit, such as the completion of 15 years of service and the attainment of age 65.
Those members of a group who have met the eligibility requirements under a group life or health insurance plan.
A period of time between the period of disability and the start of disability income insurance benefits, during which no benefits are payable. The elimination period may be as short as a few days or as long as one year or more. See Waiting Period.
Fraudulent use or taking off another’s property or money which has been entrusted to one’s care.
Emergency Medical Condition
Medical Condition that involves symptoms of such severity, that if immediate medical attention isn’t provided, it could be reasonably assumed the individual will lose bodily functions or organs.
Emergency Medical Transportation
Ambulance services for an Emergency Medical Condition.
Employee Benefit Plan Insurance
Coverage designed to protect the employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the insured‘s employee benefit programs. Coverage is intended to extend to the administration of these plans, including counseling employees, interpreting employee benefit programs, handling records, enrolling, terminating or canceling employees in specified plans on a timely basis, etc.
Employee Benefit Programs
Programs designed to benefit employees, arranged by the employer, which are not paid for primarily or directly by the employee, including for instance group life insurance and group accident and/or health insurance; profit sharing plans; employee stock subscription plans; workers’ compensation; unemployment insurance; social security benefits; disability benefits, etc..
Employee Dishonesty Coverage Form
Commercial crime insurance form drafted by the Insurance Services Office that covers the loss of money, securities, and other covered property because of any dishonest act of a covered employee or employees.
Employee Dishonesty Insurance
See Fidelity Bond.
Employee Retirement Income Security Act
Legislation passed in 1974 applying to most private pension and welfare plans that requires certain minimum standards to protect participating employees.
Employer Shared Responsibility Payment (ESRP)
Healthcare law that requires applicable large employers to offer health care coverage to full-time employees and their dependents.
Employment Practices Liability Insurance
Coverage designed to protect the corporation, directors, officers and employees for claims resulting from wrongful termination, discrimination, sexual harassment, wrongful discipline and failure to employ or promote.
Employment Stock Ownership Plan
A defined contribution pension plan which is designed to invest primarily in securities of the employer, such as common stock and debentures.
An additional piece of paper, not a part of the original contract, that cites certain terms and that, when attached to the original contract, becomes a legal part of that contract. See Rider.
Life insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the insured dies prior to that date.
A person who performs actuarial service for a plan and who is enrolled with the Federal Joint Board for the Enrollment of Actuaries.
A document signed by an employee as notice of his/her desire to participate in the benefits of a group insurance plan.
Entire Contract Clause
Provision in life insurance policies stating that the policy and attached application constitute the entire contract between the parties.
Entity Purchase Agreement
The terms for the business to buy back a deceased’s share of the business’s ownership.
The injurious presence in or on land, the atmosphere, or any water course or body of water of solid, liquid, gaseous, or thermal contaminants, irritants, or pollutants.
Environmental Impairment Liability Insurance
Coverage designed to cover losses and liabilities arising from damage to property by pollution.
See Employment Practices Liability Insurance.
See Exclusive Provider Organization.
Investments in the form of ownership of property, usually common stocks, as distinguished from fixed income bearing securities, such as bonds or mortgages.
Equity In The Unearned Premium Reserve
Amount by which an unearned premium reserve is overstated because it is established on the basis of gross premium rather than net premium.
See Employee Retirement Income Security Act.
Errors And Omissions Insurance
Also called Professional Liability Insurance. Coverage designed to protect an insured against loss due to a claim of some negligent act, error, or omission by the insured.
See Employment Stock Ownership Plan.
Essential Health Benefits (EHB)
EHB require that everyone in the small group and individual health insurance market have access to comprehensive coverage that falls into 10 designated categories (Ambulatory patient services, Emergency services, Hospitalization, Maternity and newborn care, Mental health and substance use disorder services, Prescription drugs, Rehabilitative services, Laboratory services, Preventive and wellness services and chronic disease management and Pediatric services, including oral and vision care)
The assets and liabilities of a person left at death.
The process of developing a plan to transfer property from one generation to the next, or within a generation (eg., from husband to wife).
Legal doctrine that prevents a person from denying the truth of a previous representation of fact, especially when such representation has been relied on by the one to whom the statement was made.
Evidence Of Insurability
Any statement of proof of a person’s physical condition and/or other factual information affecting his/her acceptance for insurance.
Excess And Surplus Insurance
(1) Coverage designed to protect against losses above a certain amount, with losses below that amount usually covered by a regular policy.
(2) Insurance for a risk for which coverage is unavailable in the normal market. Such risks are frequently unusual, e.g., damage to a musician’s hands or the multiple perils of a convention. See also Umbrella Liability and Surplus Lines.
Specific condition or circumstance listed in the policy for which the policy will not provide benefit payments.
The portion of an annuity payment, considered by tax law to be a return of your initial investment, that is not subject to income tax when received.
An agent who is employed by one and only one insurance company and who solicits business exclusively for that company.
Exclusive Provider Organization
People who belong to an Exclusive Provider Organization must receive their care from affiliated providers; services rendered by unaffiliated providers are not reimbursed. See also Health Maintenance Organization.
Exclusive Remedy Doctrine
Doctrine in workers’ compensation insurance which states that workers’ compensation benefits should be the exclusive or sole source of recovery for workers who have a job-related accident or disease. The doctrine has been eroded by legal decisions.
Exemption Certificate Number (ECN)
A unique number sent to you after you have applied in the Marketplace, to be exempt from the requirement of have qualifying health coverage, and they have granted you a coverage exemption.
The ratio of an insurance company‘s operating expenses including acquisition costs to premiums written or earned.
A term used to describe the relationship, usually expressed as a percent or ratio, of premium to claims for a plan, coverage, or benefits for a stated time period.
Experience Modification Factor
Used in workers’ compensation rating to reflect the degree to which a particular employer has experience that is better or worse that expected for that industry. Weighted by employer’s credibility factor.
The process of determining the premium rate for a group risk, wholly or partially on the basis of that group’s experience.
A provision in most group policies for the return of premium to the policyholder because of lower than anticipated claims.
Date on which your insurance contract ceases to be effective.
A violent expansion, with force and noise, generally due to rapid chemical change; term covered under various property/casualty insurance policies.
The risk or loss potential an insurance company assumes from its policyholder in exchange for premium.
Unit of measurement used in insurance pricing.
Extended Coverage Insurance
Protection for the insured against property damage caused by windstorm, hail, smoke, explosion, riot, riot attending a strike, civil commotion, vehicle and aircraft. This is provided in conjunction with the fire insurance policy and the various package policies.
Extended Non-owned Coverage
Endorsement that can be added to an automobile liability insurance policy that covers the insured while driving any non-owned automobile on a regular basis.
Extended Reporting Period
An additional period of time after policy expiration during which valid claims will be paid under a claims-made policy of liability insurance
Extended Reporting Period Endorsement
Added to a claims-made policy of liability insurance to provide an additional period of time during which valid claims will be paid.
Extended Term Insurance
A form of insurance available as a non-forfeiture option. It provides the original amount of insurance for a limited period of time. The policy cash value is used to purchase term life insurance for the amount of coverage (or death benefit) under the original life insurance policy, less outstanding loans. The duration of the extended term insurance is based on the cash surrender value at the time of termination and the extended term insurance table provided in the life insurance contract.
Extended Unemployment Insurance Benefits
Additional cash benefits paid by federal-state unemployment insurance programs to workers who are involuntarily unemployed and who have exhausted their regular weekly cash benefits during periods oh high unemployment.
The process whereby an Independent Review Organization reviews an insurance company’s decision to deny a benefit or pay for service.
Extra Expense Insurance
Type of business interruption insurance that covers the extra expenses incurred to continue operations after a loss has occurred.
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