Life Insurance and Life Settlement Terms - C
Carrier
An insurance concern or issuer of insurance products.
Cash Settlement
Cash Settlement is also known as life settlement.
Cash Back Life Insurance
When a policy is surrendered to an insurance firm, the owner gets cash back in the amount of the surrender value. This is also called return of premium life insurance.
Cash Call Insurance
This happens when an insurance company requires cash in order to maintain the required cash reserves. This relief may come from a multiple sources, most frequently the government.
Cash Value
This word refers to the earnings within a cash accumulation policy.
Cash Value Loans From whole Life Policy
This word refers to the earnings within a cash accumulation policy.
Cash Surrender Value
This is the sum the insurance company agrees to pay the policy holder if they surrender or terminate the coverage. This sum is always net of any surrender charges or outstanding policy loans.
Cafeteria Plan
An employee benefit plan that gives every employee several choices as to the kinds and/or amounts of group benefits.
Capacity
The biggest amount of insurance an insurer or a reinsurer is ready or able to underwrite. The term may refer to an insurer’s capacity on one individual or to the insurer’s capacity for all its business.
Carry-Over Provision
A provision ascertined in most medical expense policies stating that expenses incurred in the last three months of a benefit period that are used to please the current benefit period’s deductible may be used to please any or all of the following benefit period’s deductible.
Case Management
A utilization management technique that addresses the medical necessity of care plus alternative treatments or solutions, particularly when the patient is likely to need very expensive treatment.
Cash Payment Option
A life insurance policy dividend option under which policy dividends are remunerated to the policyowner in cash.
Cash Refund Option
A type of the life income option with refund which specifies that any proceeds remaining when the beneficiary dies will be paid in a lump sum to the contingent payee.
Catastrophe
Word used for statistical recording purposes to refer to a lone incident or a series of closely related incidents causing severe insured property losses adding up more than a given amount, currently $25 million.
Catastrophe Bonds
Risk-based securities that pay high interest rates and give insurance companies with a form of reinsurance to disburse losses from a catastrophe such as those caused by a main hurricane. They let insurance risk to be sold to institutional investors in the form of bonds, therefore spreading the risk.
Catastrophe Deductable
A percentage or dollar amount that a homeowner has to pay before the insurance policy kicks in when a main natural disaster occurs. These big deductibles limit an insurer’s potential losses in such cases, letting it to insure more property. A property insurer might not be able to purchase reinsurance to protect its own bottom line unless it keeps its potential maximum losses under a certain level.
Catastrophe Factor
Probability of catastrophic loss, based on the whole number of catastrophes in a state over a 40-year period.
Catastrophe Model
Using computers, a process to mesh long-term disaster information with present demographic, building and other data to resolve the potential cost of natural disasters and other catastrophic losses for a known geographic area.
Catastrophe Re-insurance
Reinsurance for catastrophic losses.
Cell Phone Insurance
Separate insurance given to cover cell phones for damage or theft. Policies are frequently sold with the cell phones themselves.
Ceding Company
In a reinsurance transaction, the insurer that buys reinsurance to cover all or fraction of those risks that it does not wish to retain in full. Also known as the direct insurer, direct writer, or direct-writing concern.
Certain Payment
A payment that, not being contingent upon any predesignated condition will certainly be made under any situations.
Certificate of Assumption
In assumption reinsurance, a certificate sent to every policyholder whose policy has been ceded to present the policyowner (1) notice of the assumption and (2) information concerning the new insurer.
Certificate of Indebtedness
A certificate issued by an insurer to the beneficiary of a life insurance policy that states a guaranteed minimum interest rate and the incidence with which the insurer will make interest payments under the interest settlement option.
Certificate of Insurance
A document that describes the coverage provided by a cluster insurance policy and that is distributed by the group policyholder to every group insured.
Certificates of Coverage
It is a statement of coverage, also called a Certificate of Insurance, that an individual gets when insured under a group contract. The certificate serves as evidence of insurance, and outlines benefits and provisions.
ChronicallyIII
This means (1) being not capable to perform at least two activities of daily living, or (2) requiring substantial supervision to protect the individual from threats to health and safety because of severe cognitive impairment, or (3) having a level of disability alike to that described in (1) as found by the Secretary of Health and Human Services.
Chartered Life Underwriter
A professional designation by The American College for those who pass business examinations on insurance, investments and taxation, and contain life insurance planning experience.
Chartered Property/Casualty Underwriter/CPCU
A professional designation offered by the American Institute for Chartered Property Casualty Underwriters. National examinations and three years of work experience are needed.
Claim
A request for payment under the conditions of an insurance policy.
Claim investigation
The process of getting essential claim information in order to decide whether or not to disburse a claim.
Claimant
The person or party making an official request for imbursement of benefits due under the terms of an insurance contract.
Claims Made Policy
A type of insurance that pays claims presented to the insurer during the term of the policy or within a specific term after its expiration. It confines liability insurers’ exposure to unknown future liabilities.
Cobra
Short for Consolidated Omnibus Budget Reconciliation Act. A federal law under which set health plans sponsored by employers with 20 or more employees ought to offer continuation of coverage to employees who leave their jobs and their dependents.
Co-Insurance
In property insurance, needs the policyholder to carry insurance equal to a specified percentage of the value of property to receive complete payment on a loss.
Collateral
Property that is given to secure a loan or other credit and that becomes subject to seizure on default. This is also called security.
Collateral Assignment
A temporary transfer of a few of the ownership rights in a finicky property, like a life insurance policy or an annuity contract, as collateral for a loan. The transfer is made on the condition that upon payment of the debt for which the contract is collateral, all transferred rights shall regress back to the original owner. Contrast with complete assignment.
Collateral Source Rule
Bars the introduction of information that points out a person has been compensated or reimbursed by a source other than the defendant in civil actions connected to negligence or other liability.
Collision Coverage
A part of an auto insurance policy that covers the damage to the policyholder’s car from a collision.
Combined Ratio
Percentage of every premium dollar a property/casualty insurer spends on claims and expenses. A decrease in the combined ratio means financial results are enhancing; an increase means they are deteriorating.
Commercial General Liability Insurance
A broad commercial policy that covers all liability exposures of a business that are not particularly excluded. Coverage includes product liability, finished operations, premises and operations, and independent contractors.
Commercial Lines
Products designed for and purchased by businesses. Amid the major coverages are boiler and machinery, business income, commercial auto, comprehensive general liability, directors and officers liability, fire and allied lines, inland marine, medical malpractice liability, product liability, professional liability, guarantee and fidelity, and workers compensation.
Commercial Multiple Peril Policy
Package policy that comprises property, boiler and machinery, crime and general liability coverages.
Commercial Paper
Short-term, unsecured, and normally discounted promissory note issued by commercial firms and financial companies frequently to finance current business. Commercial paper, which is rated by debt rating agencies, is sold via dealers or directly placed with an investor.
Commission
Fee remunerated to an agent or insurance salesperson as a percentage of the policy premium. The percentage differs broadly depending on coverage, the insurer, and the marketing methods.
Community Rating Laws
Enacted in more than a few states on health insurance policies. Insurers are needed to accept all applicants for coverage and charge all applicants the same premium for the same coverage regardless of age or health. Premiums are based on the rate found by the geographic region’s health and demographic profile.
Commutative Contract
An agreement under which the contracting parties state the values that they will exchange; moreover, the parties normally exchange items or services that they think are of comparatively equal value.
Competitive State Parts
A facility started by a state to sell workers compensation in competition with private insurers.
Complaint Ratio
A measure used by a few state insurance departments to track consumer complaints against insurance companies. Normally, it is specified as the number of complaints upheld against an insurance concern, as a percentage of premiums written. In a few states, complaints from medical providers over the promptness of payments may also be included.
Completed Operations Coverage
Pays for bodily injury or property damage caused by a finished project or job. Protects a business that vends a service against liability claims.
Comprehensive Coverage
A part of an auto insurance policy that covers damage to the policyholder’s car not entailing a collision with another car, and theft.
Compulsory Auto Insurance
The least amount of auto liability insurance that meets a state law. Financial responsibility laws in each state require all automobile drivers to show evidence, after an accident, of their ability to pay damages up to the state minimum. In compulsory liability states this proof, which is normally in the form of an insurance policy, is needed before you can legally drive a car.
Contestable Period
The time in which an insurer has the right to cancel or rescind an insurance policy if the application contained a material misrepresentation.
Contingent Liability
Liability of individuals, corporations, or partnerships for accidents caused by people other than employees for whose acts or omissions the corporations or partnerships are liable.
Coverage
Coverage is a synonym for insurance.
Cost-of-living adjustment (COLA)
An augment in a pension benefit, disability income benefit or life income benefit to compensate for an increase in the cost of living.
Conditional Premium Receipt
A kind of premium receipt that specifies certain conditions that ought to be met prior to temporary life insurance coverage will become effective.
Conservation
An agent’s or an insurer’s efforts to avert a policy from lapsing.
Contestable Period
The period of time (normally two years) in which an insurer may challenge the validity of a life insurance policy.
Contingent Payee
The party who will get any life insurance or annuity proceeds that are still payable during the primary payee’s death.
Contract of Adhesion
A lawfully binding agreement that is prepared by one party and that ought to be accepted or rejected as a whole by the other party, without any bargaining among the parties to the agreement. Insurance contracts are contracts of adhesion.
Contributory Group Insurance
Any group insurance plan that calls for the insured to disburse a portion of the cost of the group insurance coverage.
Conversion Privilege
(1) A group life insurance policy provision that lets a group insured whose coverage terminates for specified reasons to convert his cluster coverage to an individual policy of insurance without presenting evidence of his insurability. (2) The right to change insurance coverage in certain agreed situations from one type of policy to another without presenting evidence of insurability.
Corridor
(1) In the United States, the required difference among a universal life insurance policy’s face amount and the policy’s cash value. This dissimilarity is a specified percentage that depends on the insured’s age. If a policy’s cash value goes beyond the required percentage of the face amount, the policy will be considered an investment contract rather than an insurance contract. This is also known as the TEFRA corridor.
Convertible Term Insurance
Term insurance that may be exchanged, at the option of the policyowner and without proof of insurability, for a enduring insurance policy.
Covered Life
The individual on whose life a life insurance policy is based. The age, gender, smoking and other private habits, income and medical history of the insured can all be considered in the decision made by the life insurance concern as to whether or not to issue a policy.
Consumer/Policy holder
The customer is an individual who has bought a policy and now wants to vend it. Unlike most markets, consumers in the life settlement industry are vendors.
Contingent Beneficiary
A person(s) named to receive policy benefits if the main beneficiary is deceased at the time the benefits become payable.
Cost of Insurance
The sum a policy owner pays to an insurer, minus what he or she receives back from the insurer. This expression is used when finding the true cost of permanent forms of Life Insurance to a policy owner.
Contestability Period
Period of time, normally two years, during which an insurance concern may declare a life insurance contract void as of misrepresentation or concealment by the insured in obtaining the policy. Once this period has gone, the concern may not cancel the policy or decline to pay claims for any reason other than nonpayment of premiums.
Credit
The promise to disburse in the future in order to buy or borrow in the present. The right to put off payment of debt.
Credit Enhancement
A method to lower the interest payments on a bond by raising the issue’s credit rating, frequently through insurance in the form of a financial guarantee or with standby letters of credit issued by a bank.
Credit Insurance
Commercial coverage against losses resulting from the failure of business debtors to disburse their obligation to the insured, usually due to insolvency. The coverage is geared to manufacturers, wholesalers and service providers who may be dependent on some accounts and therefore could lose significant income in the event of insolvency.
Credit Life Insurance
Life insurance coverage on a borrower designed to pay back the balance of a loan in the event the borrower dies before the loan is repaid. It can also comprise disablement and can be offered as an option in connection with credit cards and auto loans.
Credit Rating
An evaluation of a bond’s financial strength, conducted by such chief ratings agencies like Standard & Poor’s and Moody’s Investors Service.
Crime Insurance
Term referring to property coverages for the perils of robbery, theft and robbery.
Critical illness (CI) Insurance
A kind of individual health insurance that pays a lump-sum benefit when the insured is diagnosed with a particular illness. This is also called critical diagnosis insurance.
Crop hail Insurance
Protection against damage to growing crops from sleet, fire or lightning provided by the private market.
Current assumption Whole Life Insurance
A common category of insurance products in which the face amount and/or the cash value differ according to the insurer’s investment earnings.
