The dollar limit for how much of a home's value can be used to determine the amount of money you can get from a federally insured Home Equity Conversion Mortgage reverse mortgage; the name comes from Section 203-b of the National Housing Act.
The part of a contract that says when a loan may be declared due and payable.
In a life insurance policy, benefit in addition to the death benefit paid to the beneficiary, should death occur due to an accident. There can be certain exclusions, as well as time and age limits.
Person whose absence from a planned event would trigger a benefit if the event needs to be canceled or postponed.
Bathing, preparing and eating meals, moving from room to room, getting into and out of beds or chairs, dressing, using a toilet.
Cost of replacing damaged or destroyed property with comparable new property, minus depreciation and obsolescence. For example, a 10-year-old sofa will not be replaced at current full value because of a decade of depreciation.
An interest rate that changes, based on a published market-rate index.
Charge for expenses associated with administering a group employee benefit plan.
The maximum rate that the equity-indexed annuity can be credited in a year. If a contract has an upper limit, or cap, of 7% and the index linked to the annuity gained 7.2%, only 7% would be credited to the annuity.
Process by which you convert part or all of the money in a qualified retirement plan or non-qualified annuity contract into a stream of regular income payments, either for your lifetime or the lifetimes of you and your joint annuitant. Once you choose to annuitize, the payment schedule and the amount is generally fixed and can't be altered.
Choices in the way to annuitize. For example, life with a 10-year period certain means payouts will last a lifetime, but should the annuitant die during the first 10 years, the payments will continue to beneficiaries through the 10th year. Selection of such an option reduces the amount of the periodic payment.
Insured's age at a particular time. For example, many term life insurance policies allow an insured to convert to permanent insurance without a physical examination at the insured's then attained age. Upon conversion, the premium usually rises substantially to reflect the insured's age and diminished life expectancy.
Coverage if an insured is legally liable for bodily injury or property damage caused by an automobile.
In health insurance, the number of days for which benefits are paid to the named insured and his or her dependents. For example, the number of days that benefits are calculated for a calendar year consist of the days beginning on Jan. 1 and ending on Dec. 31 of each year.
A system of coordinating medical services to treat a patient, improve care and reduce cost. A case manager coordinates health care delivery for patients.
Additional money you can contribute to a Health Savings Account if you have reached the age of 55 before the end of a taxable year.
In property insurance, requires the policyholder to carry insurance equal to a specified percentage of the value of property to receive full payment on a loss. For health insurance, it is a percentage of each claim above the deductible paid by the policyholder. For a 20% health insurance coinsurance clause, the policyholder pays for the deductible plus 20% of his covered losses. After paying 80% of losses up to a specified ceiling, the insurer starts paying 100% of losses.
Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance) resulting from contact with another inanimate object.
Fee paid to an agent or insurance salesperson as a percentage of the policy premium. The percentage varies widely depending on coverage, the insurer and the marketing methods.
A business or agency that is available to the public for transportation of persons, goods or messages. Common carriers include trucking companies, bus lines and airlines.
Auto insurance coverage providing protection in the event of physical damage (other than collision) or theft of the insured car. For example, fire damage or a cracked windshield would be covered under the comprehensive section.
In hospital income protection, when a patient is confined to a hospital due to more than one injury and/or illness at the same time, benefits are paid as if the total disability resulted from only one cause.
Disorders present at birth (congenital) or passed on from parent to offspring (hereditary). Some pet insurance covers these disorders, which are likely to be first noticed when the pet is young.
Term life insurance coverage that can be converted into permanent insurance regardless of an insured's physical condition and without a medical examination. The individual cannot be denied coverage or charged an additional premium for any health problems.
A predetermined, flat fee an individual pays for health-care services, in addition to what insurance covers. For example, some HMOs require a $10 copayment for each office visit, regardless of the type or level of services provided during the visit. Copayments are not usually specified by percentages.
Automatic adjustment applied to Social Security retirement payments when the consumer price index increases at a rate of at least 3%, the first quarter of one year to the first quarter of the next year.
The geographic region covered by travel insurance.
Term means that benefits provided by other drug plans are at least as good as those provided by the new Medicare Part D program. This may be important to people eligible for Medicare Part D but who do not sign up at their first opportunity because if the other plans provide creditable coverage, plan members can later convert to Medicare Part D without paying higher premiums than those in effect during their open enrollment period.
The limit of insurance or the amount of benefit that will be paid in the event of the death of the covered person.
Amount of loss that the insured pays before the insurance kicks in.
A system of coordinated health-care interventions and communications for patients with certain illnesses.
The time which must pass after filing a claim before policyholder can collect insurance benefits. Also known as "waiting period."
Items or conditions that are not covered by the general insurance contract.
This option extends replacement cost loss settlement to personal property and to outdoor antennas, carpeting, domestic appliances, cloth awnings, and outdoor equipment, subject to limitations on certain kinds of personal property; includes inflation protection coverage.
Provides money for purchases.
A separate policy available to cover the value of goods beyond the coverage of a standard renters insurance policy including movable property such as jewelry or sports equipment.
Life and health insurance provisions that guarantee the insured the right to buy additional coverage without proving insurability. Also known as "guaranteed insurability option."
All premiums are paid into an insurer's general account. Thus, buyers are subject to credit-risk exposure to the insurance company, which is low but not zero.
The length of time (usually 31 days) after a premium is due and unpaid during which the policy, including all riders, remains in force. If a premium is paid during the grace period, the premium is considered to have been paid on time. In Universal Life policies, it typically provides for coverage to remain in force for 60 days following the date cash value becomes insufficient to support the payment of monthly insurance costs.
See "Future Purchase Option."
The right to purchase insurance without physical examination; the present and past physical condition of the applicant are not considered.
A policy provision in many products which guarantees the policyowner the right to renew coverage at every policy anniversary date. The company does not have the right to cancel coverage except for non-payment of premiums by the policyowner; however, the company can raise rates if they choose.
An organization of life insurance companies within a state responsible for covering the financial obligations of a member company that becomes insolvent.
Bungee jumping, scuba diving, horse riding and other activities not generally covered by standard insurance policies. For insurers that do provide cover for such activities, it is unlikely they will cover liability and personal accident, which should be provided by the company hosting the activity.
Managed health-care plan that provides medical care to its members through a network of participating health-care providers.
An IRS-approved tax-advantaged benefit that reimburses employees for medical care expenses not covered by the employer-sponsored health plan. It is funded exclusively by the employer. Unused balances may be rolled over to the next coverage period based on the employer's plan design. Qualified expenses are paid tax-free. Owners of high-deductible health plans who are not qualified for a Health Savings Account can use an HRA, but they do not own the money in an HRA, and HRAs are not portable.
Plan that allows you to contribute pre-tax money to be used for qualified medical expenses. HSAs, which are portable, must be linked to a high-deductible health insurance policy.
Amount you must pay out-of-pocket before hurricane insurance will kick in. Many insurers in hurricane-prone states are selling homeowners insurance policies with percentage deductibles for storm damage, instead of the traditional dollar deductibles used for claims such as fire and theft. Percentage deductibles vary from one percent of a home's insured value to 15%, depending on many factors that differ by state and insurer.
Restoration to the victim of a loss by payment, repair or replacement.
An optional property coverage endorsement offered by some insurers that increases the policy's limits of insurance during the policy term to keep pace with inflation.
Interest in property such that loss or destruction of the property could cause a financial loss.
There are at least 35 interest-crediting methods that insurers use. They usually involve some combination of point-to-point, annual reset, yield spread, averaging, or high water mark.
Purchasing bond investments that mature at different time intervals.
The amount an insurance company will pay based on its determination of cost for a particular procedure.
Sixty additional days Medicare pays for when you are hospitalized for more than 90 days in a benefit period. These days can only be used once during your lifetime. For each lifetime reserve day, Medicare pays all covered costs except for a daily coinsurance amount.
This feature allows you, under certain circumstances, to receive the proceeds of your life insurance policy before you die. Such circumstances include terminal or catastrophic illness, the need for long-term care, or confinement to a nursing home. Also known as "accelerated death benefits."
A charge that covers such annuity contract guarantees as death benefits.
A home loan in which the borrower can never owe more than the home's value at the time the loan is repaid.
Contract terms including costs can never be changed.
A predetermined amount of money that an individual must pay before insurance will pay 100% for an individual's health-care expenses.
Insurance contract provision that allows policyholders to collect benefits if they can no longer work in their own occupation.
An option that allows the policyholder to use policy dividends and/or additional premiums to buy additional insurance on the same plan as the basic policy and at a face amount determined by the insured's attained age.
In equity-indexed annuities, a participation rate determines how much of the gain in the index will be credited to the annuity. For example, the insurance company may set the participation rate at 80%, which means the annuity would only be credited with 80% of the gain experienced by the index.
When annuitizing a deferred annuity, or when buying an immediate annuity, it is one of several options that define how you want to take your stream of income payments. Period certain means you choose to take them for a special time rather than over your lifetime.
Pays basic expenses for an insured and his or her family in states with no-fault auto insurance. No-fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured, such as medical expenses, in the event of an accident.
Health insurance policy that allows the employee to choose between in-network and out-of-network care each time medical treatment is needed.
Material used by an agent and insurer to show how a policy may perform under a variety of conditions and over a number of years.
A coverage limitation included in many health policies which states that certain physical or mental conditions, either previously diagnosed or which would normally be expected to require treatment prior to issue, will not be covered under the new policy for a specified period of time.
Network of medical providers which charge on a fee-for-service basis, but are paid on a negotiated, discounted fee schedule.
A health plan with lower premiums that covers health-care expenses only after the insured has paid each year a large amount out of pocket or from another source. To qualify as a health plan coupled with a Health Savings Account, the Internal Revenue Code requires the deductible to be at least $1,000 for an individual and $2,000 for a family. High-deductible plans are also known as catastrophic plans.
Expenses for which money in 529 plans may be used tax-free. Generally, these are tuition, room and board, mandatory fees, and books and computers, if required. Pre-paid plans cover tuition and mandatory fees only, though some provide options.
Qualified plans are those employee benefit plans that meet Internal Revenue Service requirements as stated in IRS Code Section 401a. When a plan is approved, contributions made by the employer are tax deductible expenses.
Re-entry, which is the allowance for level-premium term policyowners to qualify for another level-premium period, generally with new evidence of insurability.
A type of travel insurance that will pay to prepare and return a person's remains to their home country if they die on a trip.
The dollar amount needed to replace damaged personal property or dwelling property without deducting for depreciation but limited by the maximum dollar amount shown on the declarations page of the policy.
In disability insurance, a benefit paid when you suffer a loss of income due to a covered disability or if loss of income persists. This benefit is based on a formula specified in your policy and it is generally a percentage of the full benefit. It may be paid up to the maximum benefit period.
Risk class, in insurance underwriting, is a grouping of insureds with a similar level of risk. Typical underwriting classifications are preferred, standard and substandard, smoking and non-smoking, male and female.
The secondary market is populated by buyers willing to pay what they determine to be fair market value.
This refers to a part of the Internal Revenue Code that allows owners to replace a life insurance or annuity policy without creating a taxable event.
Part of the Internal Revenue Code that defines the conditions a life policy must satisfy to qualify as a life insurance contract, which has tax advantages.
A separate account is an investment option that is maintained separately from an insurer's general account. Investment risk associated with separate-account investments is borne by the contract owner.
The fee to manage a subaccount, which is an investment option in variable products that is separate from the general account.
In hospital income protection, when confinements in a hospital are due to the same or related causes and are separated by less than a contractually stipulated period of time, they are considered part of the same period of confinement.
Fee charged to a policyholder when a life insurance policy or annuity is surrendered for its cash value. This fee reflects expenses the insurance company incurs by placing the policy on its books, and subsequent administrative expenses.
A set amount of time during which you have to keep the majority of your money in an annuity contract. Most surrender periods last from five to 10 years. Most contracts will allow you to take out at least 10% a year of the accumulated value of the account, even during the surrender period. If you take out more than that 10%, you will have to pay a surrender charge on the amount that you have withdrawn above that 10%.
The projected annual average cost of a reverse mortgage including all itemized costs.
Coverage for losses above the limit of an underlying policy or policies, such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than those of underlying policies.
Act in which an irrevocable gift is made by the parent to the child. For children younger than 14, the first $800 of annual investment earnings is tax-free and the next $800 is taxed at the child's rate. Once the child reaches the age of majority (in most states this is 18 or 21), the child can use the money in that account as desired.
Endorsement to a personal automobile policy that covers an insured involved in a collision with a driver who does not have liability insurance.
An amount customarily charged for or covered for similar services and supplies which are medically necessary, recommended by a doctor or required for treatment.
The act of converting a variable annuity from the accumulation phase to the payout phase.
Someone who serves as a sales agent, but does not actually purchase policies.
The terminally ill person who sells his or her life insurance policy.
See "elimination period."
A provision in some insurance contracts which enables an insurance company to waive the collection of premiums while keeping the policy in force if the policyholder becomes unable to work because of an accident or injury. The waiver of premium for disability remains in effect as long as the insured is disabled.<!###CONTENT:END###>