Glossary Terms

failure to act within the legally required degree of care for others, resulting in harm to them.

a measure of risk due to excessive rates of growth, contingent liabilities or other items not reflected on the balance sheet.

A conversion of a term life insurance policy to a permanent plan of insurance at a premium rate, based on the insured’s age when the original term policy was purchased.

Life insurance that provides coverage throughout the insured’s lifetime and also provides a savings element.

Life insurance that provides coverage throughout the insured’s lifetime and also provides a savings element.

An amendment to an insurance policy that becomes part of the insurance contract and either expands or limits the benefits payable under the contract.

excess of an insurance company’s assets above its legal obligations to meet the benefits (liabilities) payable to its policyholders. Also, the net worth in an insurance company adjusted for the overstatement of liabilities.

method by which each member of an insurance pool shares in each and every risk written by the other members of the pool.

A proposed insured who presents a significantly less than average likelihood of loss and who is charged a lower than standard premium rate.

The dollar amount paid for an insurance policy.