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Glossary of Insurance Terms
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- General Agency System: Type of life
insurance marketing system in which the
general agent is an independent businessperson
who represents only one insurer, is in charge
of a territory, and is responsible for hiring,
training, and motivating new agents.
- General Average: In ocean marine
insurance, a loss incurred for the common good
that is shared by all parties to the venture.
- General Damages: Damages awarded to
an injured person for intangible loss which
cannot be measured directly by dollars.
Frequently called pain and suffering. General
damages are distinguished from special damages
which are awarded for actual economic loss,
such as medical costs, loss of income, etc.
- General Liability Insurance:
Coverage that pertains, for the most part, to
claims arising out of the insured's liability
for injuries or damage caused by ownership of
property, manufacturing operations,
contracting operations, sale or distribution
of products, and the operation of machinery,
as well as professional services.
- General Partner Liability Insurance:
Coverage designed to protect against claims of
loss against a general partner, for failure to
properly exercise his fiduciary duty. Also
known as General Partners' Liability and
Limited Partnership Reimbursement coverage. A
general partner's management and fiduciary
responsibilities to a limited partnership
closely parallel the director's or officer's
to a corporation. Exposure occurs when general
partners become the financial managers of a
limited partnership. The directors and
officers of corporate general partners share
this type of exposure.
- Generally Accepted Accounting
Principles (GAAP): Principles of
accounting and reporting business results
developed by the American Institute of Public
Accountants.
- Generation skipping tax: A transfer
tax imposed on gift or inheritance to those at
least two generations younger than the person
making the transfer
- Glass Insurance: Protection for
loss of or damage to glass and its
appurtenances.
- Good Student Discount: Reduction of
automobile premium for a young driver at least
sixteen who ranks in the upper 20 percent of
his or her class, has a B or 3.0 average, or
is on the Dean's list or honor roll. It is
based on the premise that good students are
better drivers.
- Grace Period: A specified period
after a premium payment is due, in which the
policyholder may make such payment, and during
which the protection of the policy continues.
- Graded Commission Scale: A
commission scale providing for payment of a
high first-year commission and lower renewal
commissions.
- Gross estate: All of the assets and
liabilities owned at death.
- Gross Negligence: the intentional
failure to perform a manifest duty in reckless
disregard of the consequences as affecting the
life or property of another
- Gross Premium: The premium paid by
the policyholder.
- Gross Rate: The sum of the pure
premium and a loading element.
- Group Annuity: A pension plan
providing annuities at retirement to a group
of people under a master contract. It is
usually issued to an employer for the benefit
of employees. The individual members of the
group hold certificates as evidence of their
annuities.
- Group Annuity Contract: A contract
issued by a life insurance company that may be
used as the funding instrument for benefits to
be made in accordance with a pension plan. A
single master contract provides that the group
of persons participating in the plan will
receive annuities during retirement.
Individual certificates stating coverage may
be issued to members of the group.
- Group Contract: A contract of
insurance made with an employer or other
entity that covers a group of persons
identified as individuals by reference to
their relationship to the entity.
- Group Creditor Life Insurance: Life
insurance provided to debtors by a lending
institution to provide for the cancellation of
any outstanding debt should the borrower die.
Normally term insurance limited to the amount
of the loan.
- Group Insurance: Insurance written
on a number of people under a single master
policy, issued to their employer or to an
association with which they are affiliated.
- Group Life Insurance: Life
insurance usually without medical examination,
on a group of people under a master policy. It
is typically issued to an employer for the
benefit of employees, or to members of an
association, for example a professional
membership group. The individual members of
the group hold certificates as evidence of
their insurance.
- Group Ordinary Life Insurance:
Group insurance plan providing life insurance
for employees. Traditional whole life policy
is split into decreasing insurance protection
and increasing cash values.
- Group Paid-Up Life Insurance:
Accumulating units of single premium whole
life insurance and decreasing term insurance,
which together equal the face amount of the
policy. Provided through a group life
insurance plan.
- Group Permanent Plan: Type of
pension plan in which cash value life
insurance is issued on a group basis and cash
values in each policy are used to pay
retirement benefits when a worker retires.
- Group Term Life Insurance: Most
common form of group life insurance. Yearly
renewable term insurance on employees during
their working careers.
- Group Universal Life Products (GULP):
Universal life insurance plans sold to members
of a group, such as individual employees of an
employer. There are some differences between
GULP plans and individual universal life
plans; for instance, GULP expense charges
generally are lower than those assessed
against individual policies.
- Guaranteed Insurability Option: See
Future Increase Option.
- Guaranteed Investment Contract: An
investment contract with an insurer in which
the insurer guarantees both principal and
interest on a pension contribution.
- Guaranteed Purchase Option: Benefit
that can be added to a life insurance policy
permitting the insured to purchase additional
amounts of life insurance at specified times
in the future without requiring evidence of
insurability.
- Guaranteed Renewable Contract: A
provision in an insurance policy that gives
the insured the right to continue the policy
in force by the timely payment of premiums for
a substantial period of time, during which
period the insurer is prohibited from making
unilaterally any change in any provision of
the contract, while the contract is in force,
other than a change in the premium rate for
classes of policyholders.
- Guaranty Fund: A fund, derived from
assessments against solvent insurance
companies, to absorb losses of claimants
against insolvent insurance companies.
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