ACV
The value of insured property after subtracting depreciation from its replacement cost.
Fixed Annuity Payout
Annual payment from a fixed annuity given a starting balance, interest rate, and payout period.
Life Annuity Payout
Estimated annual income from a life annuity, assuming payments last until the expected end of life.
Annuity
A financial contract with an insurance company converting a lump sum into a stream of regular income payments.
Auto Insurance
Coverage protecting drivers against financial losses from accidents, theft, and liability.
Captive Insurance
A subsidiary insurer formed by a parent company to finance its own risks.
Claims Adjuster
An insurance professional who investigates claims and determines the amount the insurer will pay.
Claims Process
The sequence of steps a policyholder follows to request and receive payment for a covered loss.
Coinsurance
The percentage of covered medical or property costs a policyholder pays after meeting the deductible.
CGL Insurance
Business liability coverage for third-party bodily injury, property damage, and advertising injury claims.
Commercial Insurance
Insurance policies designed to protect businesses from financial losses due to property damage, liability, and operational risks.
COB
Rules that determine how two or more health insurance plans share payment for the same claim.
Death Benefit
The amount paid to designated beneficiaries upon the death of the insured person.
Declarations Page
The summary page of an insurance policy listing coverage details, premiums, and policyholder information.
Deductible
The amount a policyholder pays out of pocket before insurance coverage kicks in for a claim.
DIME Method
A life insurance needs formula covering Debt, Income, Mortgage, and Education.
D&O Insurance
Liability coverage protecting corporate directors and officers from personal financial loss arising from management decisions.
Disability Insurance
Insurance that replaces a portion of income if illness or injury prevents you from working.
Disability Need
Monthly income benefit required to replace a percentage of earnings if you become disabled.
Endorsement
A written amendment attached to an insurance policy that changes its terms or coverage.
E&O Insurance
Professional liability coverage protecting service providers from claims of negligence, mistakes, or inadequate work.
Excess Liability
Coverage that pays claims exceeding the limits of an underlying primary liability policy.
Exclusion
A policy provision that specifically removes certain risks, perils, or losses from coverage.
Extended Replacement Cost
A homeowners coverage feature that pays above the policy limit by a set percentage to fully rebuild after a major loss.
Fidelity Bond
Insurance that protects a business from financial loss caused by employee dishonesty, theft, or fraud.
Flood Insurance
A separate insurance policy covering property damage caused by flooding, which is excluded from standard homeowners policies.
Force-Placed Insurance
Coverage a lender purchases on a borrower's property when the borrower's own insurance lapses or is insufficient.
Group Health Insurance
Employer-sponsored health coverage provided to employees and their dependents under a single group policy.
Guaranteed Renewable
A policy provision that guarantees the insured's right to renew coverage regardless of health changes, though premiums may increase.
HMO
A managed care health plan requiring members to use a network of providers and obtain referrals for specialist care.
Homeowners Insurance
Insurance protecting a home and its contents against damage, theft, and liability.
Human Life Value
The present value of a person's future earning potential, used to estimate life insurance needs.
Indemnity
The insurance principle of restoring a policyholder to their financial position before a loss, without allowing profit from a claim.
Insurable Interest
A financial stake in an insured person or property such that the policyholder would suffer real loss if the insured event occurred.
Insurance Premium
The regular payment made to an insurance company to keep a policy active.
Rider
An optional add-on provision that modifies or extends the base coverage of an insurance policy.
Key Person Insurance
Life or disability coverage purchased by a business on a critical employee whose loss would cause significant financial harm.
Liability Coverage
Insurance that pays for bodily injury or property damage you cause to others, including legal defense costs.
Life Insurance
A contract paying a death benefit to named beneficiaries upon the insured's death in exchange for premiums.
LTC Insurance
Insurance covering nursing home, assisted living, or in-home care for those unable to manage daily activities.
Loss Ratio
The percentage of earned premiums that an insurer pays out in claims and claims-related expenses.
Mortality Table
A statistical table showing the probability of death at each age, used by actuaries to price life insurance and annuities.
No-Fault Insurance
An auto insurance system in which each driver's own insurer pays their medical expenses after an accident, regardless of fault.
Open Enrollment
The annual period during which individuals can enroll in or change their health insurance coverage.
Policy Limit
The maximum dollar amount an insurer will pay for a covered loss under a policy.
PPO
A health insurance plan that offers lower cost-sharing for in-network providers while still covering out-of-network care at higher cost.
Renters Insurance
Insurance coverage for tenants that protects personal property against theft, fire, and other perils, and provides liability protection within the rented dwelling.
Replacement Cost
The amount it would cost to replace damaged or destroyed property with a new equivalent, without deducting for depreciation.
Risk Pooling
The practice of combining many individual risks into a group so that losses of the few are covered by contributions of the many.
Self-Insurance
Retaining the financial risk of potential losses by setting aside funds rather than purchasing commercial insurance.
Subrogation
The legal right of an insurer to pursue the party responsible for a loss after paying a claim to the policyholder.
Surety Bond
A three-party guarantee in which a surety company promises to fulfill an obligation if the principal fails to do so.
Surrender Value
The cash amount a policyholder receives upon canceling a permanent life insurance policy before its maturity date.
Term Life
Life insurance providing a death benefit for a fixed period, typically 10–30 years, at lower cost than permanent policies.
Term Life Need
Estimates required life insurance coverage based on income, debts, existing coverage, and liquid assets.
Umbrella Policy
Excess liability coverage extending beyond the limits of auto and homeowners insurance policies.
Universal Life
Flexible permanent life insurance with adjustable premiums and a cash value account that earns interest.
Variable Life Insurance
A permanent life insurance policy whose cash value is invested in sub-accounts and fluctuates with market performance.
Waiting Period
A specified period after a policy's effective date during which certain benefits are not yet payable.
Whole Life
Permanent life insurance with a guaranteed death benefit and a cash value component that grows over time.