Insurance Term Glossary

An insurance policy with an accelerated death benefits provision will pay - under certain conditions - all or part of the policy death benefits while the policyholder is still alive. These conditions include proof that the policyholder is terminally ill with a life expectancy of less than 12 months, has a specified life-threatening disease or is in a long-term care facility such as a nursing home. For group term life policies or certificates, the amount of accelerated benefit is limited by law to the greatest of $25,000 or 50 percent of the death benefit. By accepting an accelerated benefit payment, a person could be ruled ineligible for Medicaid or other government benefits. The proceeds may also be taxable.

An unforeseen, unintended event.

If a life insurance policy includes an accidental death benefit, the cause of death will be examined to determine whether the insured´s death meets the policy´s definition of accidental.

Policies that pay only in cases arising from an accident or injury.

An amount equivalent to the fair market value of the stolen or damaged property immediately preceding the loss. For real property, this amount can be based on a determination of the fair market value of the property before and after the loss. For vehicles, this amount can be determined by local area private party sales and dealer quotations for comparable vehicles.

An individual employed by an insurer to evaluate losses and settle policyholder claims. Also see "public insurance adjuster."

An amount deducted, usually monthly, from the policy.

A licensed person or organization authorized to sell insurance by or on behalf of an insurance company.

Coverage for the insured in the event that the insured's negligent acts and/or omissions result in losses in connection with the use, ownership, or maintenance of aircraft.

Coverage on the risks associated with driving or owning an automobile. It can include collision, liability, comprehensive, medical, and uninsured motorist coverages.

person who receives the payments from an annuity during his or her lifetime.

A contract in which the buyer deposits money with a life insurance company for investment. The contract provides for specific payments to be made at regular intervals for a fixed period or for life.

An annuity that provides a benefit amount payable for a specified period of time regardless of whether the annuitant lives or dies.

The time span between the benefit payments made under an annuity contract.

A form to be filled out with personal information that an insurance company will use to decide whether to issue a policy and how much to charge.

The transfer of all or part of a policy owner´s legal title and rights to a policy to another person. It is possible to change this type of transfer at a later date.

The person, people, or entity designated to receive the death benefits from a life insurance policy or annuity contract.

A temporary or preliminary agreement which provides coverage until a policy can be written or delivered.

Any physical injury to a person. The purpose of liability insurance is to cover bodily injury to a third party resulting from the negligent or unintentional acts of an insured.

Covers losses resulting from the malfunction of boilers and machinery. This coverage is usually excluded from property insurance creating the need for this separate product.

A licensed person or organization paid by you to look for insurance on your behalf.

Coverage against loss as a result of forced entry into premises.

The termination of insurance coverage during the policy period. Flat cancellation is the cancellation of a policy as of its effective date, without any premium charge.

A system where an HMO pays a doctor or hospital a flat monthly fee for the care of each health plan member whether or not any services are delivered.

A company or HMO that provides health care coverage.

Nonforfeiture option that specifies the policy owner can cancel the coverage and receive the entire net cash value in a lump sum.

The amount of money the life insurance policy owner will receive as a refund if the policy owner cancels the coverage and returns the policy to the company. Also called "cash surrender value."

Printed material showing members of a group health benefit plan the benefits provided by the group master policy.

This can occur when an agent persuades a consumer to borrow against an existing life insurance policy to pay the premium on a new one.

Notice to an insurer that under the terms of a policy, a loss maybe covered.

The first or third party. That is any person who asserts right of recovery.

The percentage of each health care bill a person must pay out of their own pocket. Non-covered charges and deductibles are in addition to this amount.

The most you will have to pay in coinsurance during a policy period (usually a year) before your health plan begins paying 100 percent of the cost of your covered health services. The coinsurance maximum generally does not apply to copayments or other expenses you might be required to pay.

Pays for damage to a car without regard to who caused an accident. The company must pay for the repair or up to the actual cash value of the vehicle, minus the deductible.

This coverage waves your collision deductible if you are hit by a negligent uninsured motorist.

A written communication primarily expressing a grievance against an insurance company or agent.

Information collected or maintained by the Tennessee Department of Commerce and Insurance (TDCI) relating to the number of complaints received against a particular insurer, agent, or premium finance company and the disposition of the complaints.

Pays for damage to or loss of your automobile from causes other than accidents. These include hail, vandalism, flood, fire, and theft.

A premium receipt given to an applicant that makes a life and health insurance policy effective only if or when a specified condition is met.

A period of up to two years during which a life insurance company may deny payment of a claim because of suicide or a material misrepresentation on an application.

Another party or parties who will receive the life insurance proceeds if the primary beneficiary should predecease the person whose life is insured.

In most cases, an insurance policy. A policy is considered to be a contract between the insurance company and the policyholder.

The right to change (convert) insurance coverage from one type of policy to another. For example, the right to change from an individual term insurance policy to an individual whole life insurance policy.

The amount you must pay out of your own pocket when you receive medical care or a prescription drug. Copayments usually refer to set fees that insurance companies charge to access health care services.

A group plan provision that stipulates the primary carrier when you have more than one health plan. This ensures that payments made by the carriers do no exceed the cost of the services provided.

This is a special type of coverage usually designed to pay off a loan or charge account balance if the policyholder dies. Some lenders or sellers may require credit life insurance before they will approve a loan. If credit life is required, the lender or seller cannot require the policyholder to purchase it from them or a particular insurance company. If the policyholder has an existing life policy, the creditor has to accept an assignment of benefits under their existing policy instead of requiring them to purchase a credit life policy. Credit life insurance premium rates for loans of 10 years or less are regulated by TDCI, but premium rates for loans that are more than 10 years old are unregulated.

Coverage for transportation firms that must carry any customer's goods so long as the customer is willing to pay. Examples include trucking companies, bus lines, and airlines.

Coverage on an "all risks" basis for glass breakage, subject to exclusions of war and fire.

Insurance issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan.

Amount paid to the beneficiary upon the death of the insured.

The page in a policy that shows the name and address of the insurer, the period of time a policy is in force, the amount of the premium, and the amount of coverage.

The company refuses to accept the request for insurance coverage.

An annuity under which the annuity payment period is scheduled to begin at some future date.

The amount of the loss which the insured is responsible to pay before benefits from the insurance company are payable. You may choose a higher deductible to lower your premium.

The real or perceived reduction in market value of a vehicle as a result of damage sustained due to involvement in an accident.

A decrease in value due to age, wear and tear, etc.

Health insurance that provides income payments to the insured wage earner when income is interrupted or terminated because of illness, sickness, or accident.

Policies that pay only if you contract the illness specified in the policy. (Also called specified disease policies.)

The portion of a policy premium that has been used to actually buy coverage, or that the insurance company has "earned." For instance, if a policyholder has a six-month policy that was paid for in advance, two months into the policy, there would be two months of earned premium. The remaining four months of premium is "unearned premium."

The date on which an insurance policy becomes effective.

An employee who meets the eligibility requirements for coverage in a group plan. To be eligible to join a small group plan, you usually must work full-time for at least 30 hours a week. Some group plans may require employees to be a certain pay grade or job classification to be eligible for coverage.

Health care services provided in a hospital emergency facility or comparable facility to evaluate and stabilize sudden and severe medical conditions.

Amendment to the policy used to add or delete coverage. Also referred to as a "rider."

Health plans created under the Employee Retirement and Income Security Act (ERISA) of 1974. These plans are self-funded, which means that claims are paid strictly from employer contributions and employee premiums. ERISA plans are administered by the U.S. Department of Labor. (Also known as a self-funded plan.)

Money placed in the hands of a third party until specified conditions are met.

To qualify for a particular policy at a particular price, companies have the right to ask for information about health and lifestyle. An insurance company will use this information - the evidence of insurability - in deciding if your application for insurance is acceptable and at what premium rate.

Provisions that exclude or limit coverage of certain named diseases, medical conditions, or services, as well as some sicknesses or accidents that occur under specified circumstances.

similar to an HMO, but with network only benefits

Certain causes and conditions, listed in the policy, which are not covered.

The date on which the policy ends.

A policy provision that provides the option of continuing the existing amount of insurance as term insurance for as long a period of time as the contract's cash value will purchase.

The dollar amount to be paid to the beneficiary when the insured dies. It does not include other amounts that may be paid from insurance purchased with dividends or any policy riders.

A surety bond, insurance policy or, when issued by an insurer, an indemnity contract and any guaranty similar to the foregoing types, under which loss is payable upon proof of occurrence of financial loss to an insured claimant, obligee, or indemnitee.

Coverage for loss of or damage to a building and/or contents due to fire.

A claim filed by an insured against his or her own insurance policy.

Also known as "10-day free look" or "free look," it is the time period after a life insurance policy, annuity policy or health insurance policy is delivered during which the policy owner may review it and return it to the company for a full refund of the initial premium.

Insurance that pays the difference between the actual cash value of a vehicle and the amount still to be paid on the loan. Some gap policies may also cover the amount of the deductible.

A specified period immediately following the premium due date during which a payment can be made to continue a policy in force without interruption. This applies only to Life and Health policies. Check your policy to be sure that a grace period is offered and how many days, if any, are allowed.

The appeal process an HMO or health insurance company provides for you to protest a decision regarding medical necessity or claim payment.

This type of life insurance provides coverage to a group of people under one contract. Most group contracts are sold to businesses that want to provide life insurance for their employees. Group life insurance can also be sold to associations to cover their members and to lending institutions to cover the amounts of their debtor loans. Most group policies are for term insurance. Generally, the business will be issued a master policy and each person in the group will receive a certificate of insurance.

Several insurance companies under common ownership and often common management.

Policies that may not be non-renewed or canceled, except in certain cases. An insurer may cancel a guaranteed renewable policy for failure to pay premiums, fraud, or intentional material misrepresentation. It also may cancel your policy if the company formally leaves the individual or group health market.

An option that permits the policy holder to buy additional stated amounts of life insurance at stated times in the future without evidence of insurability.

In most cases, health care services provided to employees by an employer. It can be an indemnity plan or an HMO plan.

Although not an insurance benefit, these accounts allow you to set aside pre-tax dollars to pay for medical care or medical costs not covered by your regular health benefit plan.

A policy that will pay specifies sums for medical expenses or treatments. Health policies can offer many options and vary in their approaches to coverage.

Managed care plans that provide health care services to their members through networks of doctors, hospitals, and other health care providers. HMOs are popular alternatives to traditional health care plans offered by insurance companies because they cover a wide variety of services, usually at a lower cost.

An elective combination of coverages for the risks of owning a home. Can include losses due to fire, burglary, vandalism, earthquake, and other perils.

Policies that pay a fixed amount each day you are in the hospital.

A provision that places a time limit - up to two years - on a life insurance company´s right to deny payment of a claim because of suicide or a material misrepresentation on your application.

A person who charges a fee to an insurance company to adjust the company´s claim.

If your health insurer or HMO declines to pay for health care you believe is medically necessary or appropriate, you may request that it contact TDI and request that an independent group (IRO) review the decision. An IRO review is not required for self-funded ERISA plans. Unless your condition is life-threatening, you must complete the standard appeal process before requesting an IRO review. IROs are not affiliated with your health plan. The health plan must pay for treatment the IRO determines is necessary.

Automatically adjusts home insurance policy limits to account for increases in the costs to repair or rebuild a property.

Medical and surgical care usually received in a hospital or skilled nursing home environment.

Any financial interest a person has in the property or person insured. In life insurance, a person´s or party´s interest - financial or emotional - in the continuing life of the insured.

The policyholder - the person(s) protected in case of a loss or claim.

The insurance company.

This is a procedure when conflicting claims are made on a life insurance policy by two or more people. Using this procedure the insurance company pays the policy proceeds to a court, stating the company cannot determine the correct party to whom the proceeds should be paid.

A named beneficiary whose rights to life insurance policy proceeds are vested and whose rights cannot be canceled by the policy owner unless the beneficiary consents.

A complaint that exposes an apparent violation of a policy provision, contract provision, rule, or statute; or which indicates a practice or service that a prudent layperson would regard as below customary business or medical standards.

The termination of an insurance policy because a renewal premium is not paid by the end of the grace period.

Prepaid legal insurance coverage plan sold on a group basis.

Responsibility to another for one´s negligence that results in injury or damage.

Coverage for a policyholder's legal liability resulting from injuries to other persons or damage to their property as a result of an auto accident.

An auto insurance coverage that pays for injuries to the other party and damages to the other vehicle resulting from an accident the policyholder caused. It also pays if the accident was caused by someone covered by the policyholder's policy, including a driver operating the car with their permission.

Covers losses that an insured is legally liable. For homeowners insurance, for example, liability coverage protects the policyholder against financial loss if they are sued and found legally responsible for someone else's injury or property damage.

A policy that will pay a specified sum to beneficiaries upon the death of the insured.

Maximum amount a policy will pay either overall or under a particular coverage.

The amount which can be borrowed at a specified rate of interest from the issuing company by the policyholder, using the value of the policy as collateral. In the event the policyholder dies with the debt partially or fully unpaid, then the amount borrowed plus any interest is deducted from the amount payable.

Coverage that provides help for people when they are unable to care for themselves because of prolonged illness or disability. Benefits are triggered by specific findings of "cognitive impairment" or inability to perform certain actions known as "Activities of Daily Living." Benefits can range from help with daily activities while recuperating at home to skilled nursing care provided in a nursing home.

The amount an insurance company pays on a claim.

A provision in homeowners and renters insurance policies that reimburses policyholders for the additional costs (housing, food, and other essentials) of having to live elsewhere while the home is being restored following a disaster.

Refers to the number of insurance claims previously filed by a policyholder. A company will consider loss history when underwriting a new policy or considering a renewal of an existing policy. Companies view loss history as an indication of the likelihood that an insured will file a claim in the future.

Health care policies that usually cover both hospital stays and physicians´ services in and out of the hospital.

A system that organizes physicians, hospitals, and other health care providers into networks with the goal of lowering costs while still providing appropriate medical services. Many managed care systems focus on preventive care and case management to avoid treating more costly illnesses.

Health care benefits that state or federal law says must be included in health care plans.

Health care benefits that must be offered to the employer or organization sponsoring a group policy. The sponsor is not required to include the benefits in its group plan.

Coverage for goods in transit and the vehicles of transportation on waterways, land, and air.

The current value of an item. The market value of a home includes the price of land.

A significant misstatement on an application form. If a company had access to the correct information at the time of application, the company might not have agreed to accept the application.

The maximum amount someone covered under a health care plan must pay during a certain period for expenses covered by the plan. Until the maximum is reached, the person covered is required to pay a copayment or a percentage on each claim.

Both auto insurance coverages pay limited medical and funeral expenses if the policyholder, a family member, or a passenger in the car is injured or killed in a motor vehicle accident. PIP also pays lost-income benefits.

Health care that results from illness or injury or is otherwise authorized by the health care plan. This term can be defined differently from one health care plan to another.

An incorrect estimate of the insurance premium.

The cost of the insurance protection element of a universal life policy. This cost is based on the net amount at risk under the policy, the insured´s risk classification at the time of policy purchase, and the insured´s current age.

he cost of the insurance protection based upon actuarial tables which are based upon the incidence of death, by age, among given groups of people. This cost is based on the amount at risk under the policy, the insured´s risk classification at the time of policy purchase, and the insured´s current age.

Life insurance that pays the balance of a mortgage if the mortgagor (insured) dies.

Benefit plans that serve employees of more than one employer and are set up under terms of a collective bargaining agreement.

In general, employee association plans (not set up under a collective bargaining agreement) that provide benefits to employees of more than one employer. If the MEWA assumes all or part of the plan´s insurance risk, it must be licensed by TDCI.

An endorsement to an auto insurance policy that provides that a policy does not cover losses when a specifically named person is the party involved in the loss.

An auto insurance policy that doesn't provide coverage for an individual residing in a named insured 's household specifically unless the individual is named on the policy. The term includes an auto insurance policy that has been endorsed to provide coverage only for drivers specifically named on the policy.

All physicians, specialists, hospitals, and other providers who have agreed to provide medical care to insured under terms of the contract with an HMO or insurance company.

Health care providers and treatment facilities not under contract with the HMO or insurance company.

Auto insurance coverage that offers liability, uninsured motorist, and medical payments to a named insured who does not own a vehicle.

A life insurance policy that does not grant the policy owner the right to policy dividends.

A decision by an insurance company not to renew a policy.

Health care services from providers not in an HMO´s or a PPO´s network. Except in certain situations, HMOs will only pay for care received from within its network. If you´re in a PPO plan, you will have to pay more to receive services outside the PPO´s network.

The most you will have to pay during a policy period (usually a year) before you no longer have to pay your share of coinsurance for covered health services. Once you've reached your out-of-pocket maximum, your health plan generally pays 100 percent of your health care costs. You are still responsible for paying your premium.

Services usually provided in clinics, physician or provider offices, hospital-based outpatient departments, home health services, ambulatory surgical centers, hospices, and kidney dialysis centers.

This event occurs when a life insurance policy will not require any further premiums to keep the coverage in force.

Additional amounts of life insurance purchased using dividends; these insurance amounts require no further premium payments.

The cause of a possible loss. For example, fire, theft, or hail.

All tangible property (other than land) that is either temporary or movable in some way, such as furniture, jewelry, electronics, etc.

Insurance on family dwellings of not more than four units, household goods, farm premises, buildings, machinery, equipment or livestock, private passenger vehicles, and watercraft.

The written contract of insurance.

The maximum amount a policy will pay, either overall or under a particular coverage.

An advance made by a life insurance company to a policy owner. The advance is secured by the cash value of the policy.

The person or party who owns an individual insurance policy. This person may be the insured, the beneficiary, or another person. The policy owner usually is the one who pays the premium and is the only person who may make changes to a policy.

The period a policy is in force, from the beginning or effective date to the expiration date.

A requirement that the health care plan must approve, in advance, certain medical procedures. Precertification means the procedure is approved as medically necessary, not approved for payment.

A medical problem or illness you had before applying for health care coverage.

A type of plan in which physicians, hospitals, and other providers agree to discount rates for an insurance company. These providers are part of the PPO´s network. Insurance contracts with PPO provisions reimburse at a higher percentage if you use providers in the network. If you go to providers outside the PPO´s network, you will have to pay more for your care.

The amount of money an insurance company charges for insurance coverage.

A policyholder contracts with a lender to pay the insurance premium on his/her behalf. The policyholder agrees to repay the lender for the cost of the premium, plus interest and fees.

An amount deducted from each life insurance premium payment, which reduces the amount credited to the policy.

Health care services such as routine physical examinations and immunizations that are intended to prevent illnesses before they occur.

When the policy is terminated midterm by the insurance company, the earned premium is calculated only for the period coverage was provided. For example: an annual policy with premium of $1,000 is canceled after 40 days of coverage at the company's election. The earned premium would be calculated as follows: 40/365 days X $1,000=.110 X $1,000=$110.

Damage to another person's property. The purpose of liability insurance is to cover property damage to a third party resulting from the negligent or intentional acts of an insured.

A hospital, pharmacist, registered nurse, organization, institution, or person licensed to provide health care services in Tennessee. A physician also may be referred to as a provider. The term provider is often used collectively to refer to individual or facilities who provide health services.

All the doctors, specialists, hospitals, and other providers who agree to provide medical care to members under terms of a contract with the HMO or insurance company.

An individual employed by a policyholder to negotiate a claim with the insurance company in exchange for a percentage of the claim settlement. Public insurance adjusters must be licensed by TDCI.

An estimate of the cost of insurance, based on information supplied to the insurance company by the applicant.

A policy issued at a higher premium to cover a person classified as a greater-than-average risk, usually due to impaired health or a dangerous occupation.

An amount of money returned to the policyholder for overpayment of premium or if the policyholder is due unearned premium.

The process by which a life insurance company puts a policy back in force after it lapsed because of nonpayment of renewal premiums.

Continuation of a policy after its expiration date.

Auto insurance coverage that pays a set daily amount for a rental car if the policyholder's car is being repaired because of damage covered by the auto policy.

A form of property insurance that covers a policyholder's belongings against perils. It also provides personal liability coverage and additional living expenses. Possessions can be covered for their replacement cost or the actual cash value, which includes depreciation.

The cost to repair or replace an insured item. Some insurance only pays the actual cash or market value of the item at the time of the loss, not what it would cost to fix or replace it. If you have personal property replacement cost coverage, your insurance will pay the full cost to repair an item or buy a new one once the repairs or purchases have been made.

The full cost to repair or replace the damaged property with no deduction for depreciation, subject to policy limits and contract provisions.

The restoring of a lapsed policy to full force and effect. The reinstatement may be effective after the cancellation date, creating a lapse of coverage. Some companies require evidence of insurability and payment of past due premiums plus interest.

The termination of an insurance contract by the insurer when material misrepresentation has occurred.

A portion of the premium returned to a policy owner as a result of cancelation, rate adjustment, or a calculation that an advance premium was in excess of the actual premium.

Usually known as an endorsement, a rider is an amendment to the policy used to add or delete coverage.

This is a method for calculating the amount of unused premium that takes into account the fact that more insurance coverage is required in the early months of the loan, since the payoff of the loan is greater. As the loan is paid off, less coverage is being paid for, so the refund percentage decreases.

Plans funded strictly from employer contributions and employee premiums. These plans are authorized by the federal Employee Retirement and Income Security Act (ERISA) of 1974 and are regulated by the U.S. Department of Labor. State regulation of these plans is limited. Although an insurance company may be hired to administer the plan, the insurance company assumes no risk. (Also known as ERISA plans.)

The counties, or portions of counties, where an HMO or PPO provides coverage.

When the policy is terminated prior to the expiration date at the policyholder's request. Earned premium charged would be more than the pro-rata earned premium. Generally, the return premium would be approximately 90 percent of the pro-rata return premium. However, the company may also establish its own short-rate schedule.

A type of limited-payment policy that requires only one premium payment.

Care needed after a serious illness. It is available 24 hours a day from skilled medical personnel such as registered nurses or professional therapists. A doctor orders skilled nursing care as part of a treatment plan.

A licensed employee of a fire and casualty agent or broker who may act for the agent or broker in some circumstances.

Policies that pay only if you contract the illness specified in the policy. (Also called dread disease policies.)

Coverage for property damage caused by untimely discharge from an automatic sprinkler system.

Life insurance policy wording which specifies that the proceeds of the policy will not be paid if the insured takes his or her own life within a specified period of time after the policy´s date of issue.

Assignment of rights of recovery from insured.

An extra charge applied by the insurer. For automobile insurance, a surcharge is usually for accidents or moving violations.

Coverage from out-of-state companies not licensed in Texas but legally eligible to sell insurance on a "surplus lines" basis. Surplus lines companies generally charge more than licensed companies and often offer less coverage.

Charges that are deducted if a life insurance policy or annuity is cashed in (surrendered). These charges also are deducted if the policyholder borrows money on the policy or if the policy lapses for non-payment.

Includes insurance against loss through damage or legal liability for damage, to property caused by the use of teams or vehicles other than ships, boats, or railroad rolling stock, whether by accident or collision or by explosion of engine, tank, boiler, pipe, or tire of the vehicle, and insurance against the theft of the whole or part of such vehicle (California Insurance Code, Section 115).

A devices installed on a vehicle that records and transmits data to the insurance company how the vehicle is driven. Data captured includes rapid acceleration, hard braking, etc. This data is used in the rate making process.

An insurance plan created to provide automobile insurance to individuals or companies unable to obtain coverage through the voluntary market.

An organization that performs managerial and clerical functions related to an employee benefit insurance plan by an individual or committee that is not an original party to the benefit plan.

A claim filed against another person's insurance policy.

A form of insurance which insures against a financial loss from defect in title to real property and from invalid mortgage loans.

Auto insurance coverage that pays for towing charges when a car can´t be driven. Also pays labor charges, such as changing a flat tire, at the place where the car broke down.

The person who reviews an application for insurance and decides if the applicant is acceptable and at what premium rate.

The process an insurance company uses to decide whether to accept or reject an application for a policy.

The amount of a pre-paid premium that has not yet been used to buy coverage. For instance, if a policyholder paid in advance for a six-month premium, but then cancel the policy after two months, the company must refund the remaining four months of "unearned" premium.

Insurance typically purchased in connection with a consumer credit transaction to provide payment of a specified monthly amount in the event of involuntary unemployment.

Auto insurance coverage that pays for the policyholder's injuries and property damage caused by a hit-and-run driver or a motorist without liability insurance. It will also pay when medical and car repair bills are higher than the other driver´s liability coverage.

The key characteristic of universal life insurance is flexibility. Within limits, a policyholder can choose the amount of insurance and the premium they want to pay. The policy will stay in force as long as the policy value is sufficient to pay the costs and expenses of the policy. The policy value is "interest-sensitive," which means that it varies in accordance with the general financial climate. Lowering the death benefit and raising the premium will increase the growth rate of your policy. The opposite also is true. Raising the death benefit and lowering the premium will slow the growth of your policy. If insufficient premiums are paid, the policy could lapse without value before the maturity date is reached. (The maturity date is the time your policy ceases and cash surrender value would be payable if the policyholder is still living.) Therefore, it is the policyholder's responsibility to consistently pay a premium that is high enough to ensure that the policy´s value will be adequate to pay the monthly cost of the policy. The company is required to send an annual report and also to notify the policyholder if they are in danger of losing their policy due to insufficient value.

The charge for medical services that refers to the amount approved by the carrier for payment. These charges may be based on rates usually charged by physicians and providers in your area; rate averages compiled by independent rating services; or rate averages compiled by the insurance company.

The review process aimed at helping HMOs and insurance companies reduce health care costs by avoiding unnecessary care. The review includes evaluating requests for medical treatment and determining, on a case-by-case basis, whether that treatment is necessary.

A form of annuity policy under which the amount of each benefit payment is not guaranteed and specified in the policy, but which instead fluctuates according to the earnings of a separate account fund.

A type of whole life policy in which the death benefit and the cash value fluctuate according to the investment performance of a separate account fund that the policyholder selects. Because the investment account is regulated by the Securities and Exchange Commission, the policyholder must be presented with a prospectus before they purchase a variable life policy.

Viatical settlements involve the sale of an existing life insurance policy by a viator (person with a life threatening or terminal illness) to a viatical settlement company in return for a cash payment that is a percentage of the policy´s death benefit.

Whole life insurance policies are one type of cash value insurance. Whole life policies offer protection through a lifetime - that is, for a person´s "whole life." From the day a person buys the policy, they pay a scheduled premium. The scheduled premium may be level or may increase after a fixed time period, but it will not change from the amount(s) shown in the policy schedule. It is important to look at the policy schedule to understand what the premium payments will be and that they are affordable over time. This premium is based on age at the time of purchase. Initially, it will be higher than the premium paid for a term policy, but they are likely to decrease over time if the policy is kept for a long time. Part of each premium payment will go to cash value growth, part for the death benefit and part for expenses (such as commissions and administrative costs). There is no need to renew whole life policies. As long as the premium is paid when due, coverage will continue in force.