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Accidental Death Insurance
This insurance provides for death due to accident and not illnesses. Your beneficiaries receive such death benefits. If you suffer bodily injuries, this insurance provides specified amount for your medical expenses. Premiums for such insurance are much lower than life insurance, as incidence of accidents is fewer. Accidents should be within specific clauses of insurance policy.
Accelerated Death Benefit Rider (ADB)
This special rider prevents any total financial loss due to your terminal illness. These benefits are equivalent to life insurance proceeds if your terminal illness could cause your death within a year from payment of proceeds, benefits are equal, or more than payable death benefits, or cash surrender values should be equal or more than death benefits.
Acceleration Clause
This clause allows lender to demand entire unpaid balance of loan amount inclusive of interest within a specified time limit. This clause becomes effective in specific circumstances like insolvency, default in loan repayments, deviating from loan agreements, and defaulting in tax repayments on mortgaged property. This clause is more common in mortgage and real estate agreements.
Accelerated Benefits
These life insurance policy benefits accrue to you during your lifetime because of presence of any terminal illness. Insurance companies assess severity of your illness and amount of benefits accruing to you because of your incurable illness. Your beneficiaries receive the remainder amount after your death after deduction of interest charges. These are popular as living benefits.
Accelerated Death Benefits
This is a special rider of life insurance policy that gives you monetary benefits if you develop any terminal illness. This policy becomes effective only if you need extensive and special medical care or hospitalization. It also pays for your living expenses in such cases. Your beneficiaries will receive the residue of the policy value after your death.
A-Share Variable Annuity
Through this contract, you pay sales charges of your insurance contract initially and therefore, do not have to pay any surrender charges later. Your initial payment consists of only a percentage of the premium charge. This system is fast gaining popularity due to extensive changes in the money market. This system is similar to mutual fund payments.
Accrued Benefit
You receive this benefit according to number of years of service at a specific company. Such benefits accrue as a percentage of your salary over your period of service. You receive this benefit at the time of your retirement from service. It could also be a specific dollar amount without being as a percentage of your salary.
Actual Cash Value
This clause is common in property insurance contracts. This clause determines payouts for your damaged or stolen goods and possessions. It is normally equal to the amount arrived at after deducting depreciation from replacement value of your article. Insurance premiums for actual value coverage are much lower than replacement value. Many prefer this type of coverage.
Actuary
An insurance professional specializing in mathematical calculations of your risks arising from insurance coverage like dividends, premiums, expectancy, annuity rates, relation of rates and rating methods, evaluating insurance company’s reserves, and various other types of business and financial risk calculations. Such professionals evaluate insurance statistics and judge your insurance applications according to possible risk to insurance companies.
Additional Living Expenses
Property insurance providers offer this coverage for your living expenses going beyond your normal living expenses. This occurrence should be specifically due to damage through various covered perils like fire, theft, explosions, vandalism, and others to your original accommodation, forcing you to shift to temporary premises. Some companies offer prescribed and restricted limits while others offer unlimited amounts.
Additions and Alterations
This provides for any new constructions within your house or changes to existing constructions. Normally, this clause provides ten percent of your total coverage. You can increase this coverage too. Such constructions and changes should cause a change in the value of your house, thereby necessitating changes in your property insurance too.
Adjuster
This is an insurance company employee with the specific job of settling claim amounts. Adjuster normally assesses and analyzes your claims and submits reports to insurance company for dealing with specific claims. Your payouts are according to suggestions of adjusters. These professionals need to represent their company in the best possible manner. They rely on claims experiences to analyze and decipher losses.
Adjusted Gross Estate
This amount refers to net value of estate after deduction of losses like debts of deceased and other expenses like administrative expenses. However, this amount is before payment of estate taxes. In computation of death taxes, insurance professionals treat only fifty percent of adjusted gross estate as the maximum value of marital deduction.
Adjusted Gross Income
This refers to your gross income after adjustments for health insurance deductions, IRA deductible contributions, and other standardized deductions and exemptions. Your income includes income from all sources. This amount gives you an idea of your total taxable income indicating your liability. This calculation is more prevalent in income calculations for federal tax purposes.
Adjustment Period
This period refers to time between changes in interest rates. This period starts from the first day of your adjustment rate mortgage. The period between two adjustment dates is popular as adjustable-rate mortgage or ARM. If ARM is of a year, it means that interest rate can change only once in a year.
Administrator
Normally, court appoints administrator to look after estate of deceased persons. Such appointment takes place if estate owner dies without nominating any executor or without making a will or if nominated executor refuses to serve. Such administrator needs to look after and manage affairs of deceased’s estate until court decides on all matters finally. Court sometimes also appoints banks as administrators.
Admitted Assets
State insurance laws mention and recognize specific assets for determining solvency of insurers. States do not include specific assets for calculating and assessing financial position of any company. Normally, assets included within admitted assets consist of those assets that have a high resale value, in the sense they are liquid and can bring in money when necessary.
Admitted Company
It is an insurance company having relevant license from state insurance department to conduct business within the state. Such admitted company is also popular as admitted insurer or admitted market. Such admitted companies must follow state insurance codes and conduct business within permitted limits of state insurance department. Admitted company cannot continue doing business if there is any termination of license.
Adverse Selection
Sometimes, insurance companies do not offer any coverage for serious risks like floods and earthquakes. Occasionally, they charge high interest rates, which are not in accordance to the risk involved. This is adverse selection. Insurance companies contemplate higher chances of losses than the applicable rates. Insurance companies increase premium amounts or limit coverage to combat adverse selection.
Agent
Insurance agent can either represent a single insurance company or sell insurance policies of different companies. Self-employed independent agent sells insurance policies of different companies and receives commissions. Captive agent sells insurance policies of specific company and receives salaries or commissions from insurance company. Agent does not have any financial risk while selling insurance policies.
Alien
Alien is a person who is a not a national or citizen of the United States. You can be a nonresident or a resident alien. Resident alien is a person with temporary or permanent residence in a foreign country. Nonresident alien is a visitor with legal right to visit the country. Legal alien is a person having legal permission for staying in the foreign country.
Alien Insurance Company
An insurance company with registration in a foreign country, conducting insurance or reinsurance business within the United States is alien insurance company. Such company should follow all rules and regulations of state insurance department and have necessary certificate of authority. Noncompliance to such regulations could spell trouble and lead to cancellation of insurance license too.
Alimony
The amount you need to pay for supporting your divorced spouse according to your legal separation agreement or divorce decree. You may have to pay this amount even in cases of legally separated people without any divorce. Although in practice husband pays alimony, courts can sometimes order wives to pay alimony to their separated husbands.
Allied Lines
This property insurance is normally available with your fire insurance. It pays for damages due to water, wind, or vandalism. Allied lines encompass other insurances like demolition insurance, data processing insurance, vandalism and malicious mischief insurance, radioactive contamination insurance, earthquake insurance, standing timber insurance, increased cost of construction clause, water damage insurance and similar others.
All-Risk Policy
All-Risk Policy is a type of property insurance policy, which provides coverage for damages due to all-perils. This is popular as open peril coverage too. There are very few exceptions within the list of possible perils in this type of insurance policy. You can benefit from sufficient coverage, as most possible perils are within such an insurance policy.
Alternate Payee
This person has the right to receive benefits accruing under any specific qualified retirement plan. Such a situation arises if you are unable to collect your benefits. Normally, such a beneficiary is your spouse, child or children, ex-spouse, or similar other dependent. You could receive all accrued benefits or any specific portion of the benefits.
Alternate Valuation Date
Normally, valuation date is six months or 180 days after the death of specific person. For all estate tax purposes, value of estate is normally as on the date of death or any other alternative date for valuation. However, tax and estate value on such alternative valuation date should be less than that on the date of death.
Alternative Dispute Resolution (ADR)
Insurance companies use several alternative methods to settle disputes instead of going to court. Such alternative methods could be simple negotiations or amicable settlements through third parties. Such settlements help do away with huge expenses incurred due to court litigations, related costs, and extensive time involved in arriving at a decision. These methods are becoming very popular.
Alternative Markets
These refer to sources offering self-insurance coverage other than the traditional insurance companies. Popular alternative markets include risk retention groups, insurance purchasing groups, and captive insurance companies. Risk retention groups refer to groups formed by people from similar businesses to receive liability coverage. Captives are insurers providing coverage from one or more insurance companies.
Alternative Minimum Tax (AMT)
This is a minimum tax amount you have to pay irrespective of any concessions, discounts, exemptions, or similar other tax benefits. This ensures that federal agencies will receive a specific amount of income from trusts, individuals, corporations, and estates. In a way, you cannot make full use of exemptions and be free of paying any income tax at all.
Amortization
This is a systematic way of paying off your debts over a specific period. This helps you be free of debts at end of the period. Such payments include payment towards principal and interest too. Often, repayments are towards any specific payments only like interest or principal. This method also helps in deducting capital expenses over a period.
Annual Annuity Contract Fee
This fee pays for all administrative costs of annuity contract. Annuities are insurance products similar to life insurance. Such products aim at providing for various contingencies in life. It accumulates over many different clients to spread effects of any specific contingency. Annuities and their respective fees differ from place to place according to regulations at various jurisdictions.
Annual Gift Tax Exclusion
This is a special provision in federal tax that allows exemption of specific amount of monetary gifts. You can claim exemption through estate tax or gift tax. You can give such gifts to your children, grandchildren, or any other members of your family or an entity too. Normally, wealthy people use this technique to reduce impact of federal estate taxes.
Annual Statement
This is a summarized presentation of your financial operations over a year. Such presentation includes present position of expenses, reserves, liabilities, total assets, and investments too. This statement can be of individuals or companies. Such statement apprises you of the financial worth of a person or company. In some states, you have to file this statement with the local jurisdiction before commencing your business in the particular state.
Annuitant
This refers to the person receiving benefit from an annuity contract. Normally, such a beneficiary is you, your spouse, or any specific person mentioned in your contract. Normally annuitant and annuity owner is the same person. Your spouse receives proceeds from your annuity contract after your death. This saves your spouse or beneficiary from suffering due to loss of income.
Annuitization
This payout option entitles you to distribute your income from annuity contracts over your lifetime. You thereby receive a decided amount of money at specified intervals. In some cases, you can choose to receive such payments for specific number of years and thereafter receive lump sum at the end. Such payments can be to individuals, companies, trusts, or estates too.
Annuity
This is a different type of life insurance product. You pay insurance company a specific lump sum amount and you receive regular payments from insurance company. Such payments can be monthly or at specified intervals as decided. Annuities can be immediate or deferred. Immediate starts paying you back with a year of purchase and deferred allows time for your assets to grow and thereafter pay.
Annuity Beneficiary
If annuitant or annuity owner dies while payments are still due from your annuity, annuity beneficiary receives such due payments. Normally, annuity contracts pay during the contract at decided intervals of time. Such annuity plans are popular retirement plans. In some cases, remaining portion of your annuity benefit can remain in a lump sum amount.
Annuity Contract
This is an agreement or contract similar to an insurance policy. Such a contract is between annuity contract owner and provider. Provider is the insurance company. Annuity contract owner is the person purchasing an annuity with all contract rights too. Such contract is according to written agreement detailing obligations of both parties in the contract.
Annuity Payments
These are payments to annuitant or beneficiaries according to terms of annuity contract. Payments can be quarterly, annual, half-yearly, monthly, or any specific period too. Sometimes, you receive certain lump sum amount at the end of the period and the rest in installments. Payments can be on variable dollar annuity basis or fixed dollar annuity basis.
Antitrust Laws
These laws ensure maintenance of competition in the insurance market. They therefore, disallow insurance companies to function in groups. This prevents deciding of prices or restricting supplies within the market. Nevertheless, insurance companies can share insurance forms and loss data to arrive at profitable pricing policies. These laws do away with corporate mergers, price-fixing conspiracies, and similar acts that define monopoly tendencies.
Appraisal
Appraisal is a professional evaluation to determine value of a property. Normally, appraisal is in a formal and written format. This is essential for arriving at the cost of specified property for selling, financing, insuring, or for arriving at applicable taxes on your property. Such assessment of property helps determine loss of property too.
Appreciation
Increase in the value of your asset over a specified period. Your asset could be bonds, stocks, real estate, commodities, or any other form of asset. Such appreciation occurs due to changes in market conditions or other favorable causes too. Appreciation is beneficial to all asset owners. However, if you short-sell, appreciation cannot prove beneficial to you.
Arbitration
A third party comes in to settle disputes and claims between insurer and insured. Procedure of arbitration is through mutual consent and acceptance of both the concerned parties. Normally, disputing parties do not appeal any further after a decision is arrived through arbitration. Arbitrators are normally impartial individuals. This does away with costly litigation processes and extensive time involved too.
Arrearage
This refers to due or unpaid amounts accruing as dividends on cumulative preferred stock, interest on bonds, or any other similar credit instrument. This is common as arrears. Rather, it is the amount accruable to you from past investments. Companies cannot pay common dividends as long as they do not clear off preferred dividend arrears.
Assets
Any property owned by individuals or companies in the form of investments, cash, real estate, ownership in a business, or anything that has a market value. Assets can also take the form of stocks and bonds. The main consideration for anything to qualify as an asset is its resale value, rather, ability to convert it into cash.
Asset Protection Allowance
This allowance helps you keep aside or exempt certain part of your total assets from including them in calculation of your total assets for determining federal taxes and other payments towards federal Student Aid application process. Such allowance is according to certain parameters like your age, marital status, your gross income, educational expenses, and similar more.
Assigned Risk Plan
These plans help you buy insurance coverage for your vehicle if you are unable to purchase it in the normal procedure. If you have poor driving records or a very low credit score, such plans help you buy necessary liability coverage. Every insurer has to offer coverage for such specified drivers according to the number of insurance policies insurers normally sell.
Assignee
Assignee is an individual or party receiving transfer of property rights. Assignor transfers his property rights or claim to title to assignee, thereby making assignee a deputy or agent. Such legal transfer of rights provides certain additional rights, responsibilities, and liabilities too. Assignee can receive benefits from a partnership too. Normally, such contracts are common in real estate dealings.
At-Risk
This clause details that actual return from investments may not be same as expected due to a possibility of a loss. At-Risk clause details danger of loss of assets or property. You could lose either a part of the investment or a major portion of it too. You can arrive at a possible sum by calculating average returns from an investment.
At-Risk Rules
The tax law that is carried out for income, through business or trade. Generally through such financial losses from such business are not subject for tax deductions. The extent of such losses is to the point where there is taxpayer’s actual risk of finance from the activity. The losses that cross ‘at-risk rules’ are not deductible.
The amounts at risks are as follows:
- Cash contribution to the activity
- Money borrowed where the investor is liable
- Property pledged under security and not under any such activity
- When a third party not related to the investor is the loan provider
Attach
It is the legal writ, which grants the right to seize the assets and/or property. This generally occurs when an individual is financially not capable of paying the outstanding debt in cash, whereas has the assets or property of enough worth to cover the outstanding debt. In other words, it is the confiscating the property of the debtor and placing the same under the control of the court.
Attained Age
In simple words, it means the age of the insured at the specific time.
It also means the age in which a person is eligible for certain benefits. For example, one may be eligible for major decisions through the rules of the land when they acquire the age of 21, the specific age for retirement, etc.
Attorney-in-Fact
There is a difference between attorney-in-fact and attorney-at-law, one should not confuse between the two. In United States, an attorney-at-law is a lawyer for a given jurisdiction. Whereas attorney-in-fact is the person named in the document of power of attorney, the name that is assigned to act on behalf of the person. The responsibilities and power solely depends on the powers granted to the attorney-in-fact’s, which has a specific mention in the document of power of attorney. In other words, the attorney-in-fact is the principal’s agent.
Auto Insurance Policy
Auto insurance policy provides you coverage for major critical circumstance.
They are as follows -
- Liability for bodily injury
- Protection against personal injury
- Property damage liability
- Collision coverage, for damage to the car of the policyholder
- Comprehensive coverage, for damage of the car from other external causes apart from collision
- Uninsured motorist coverage, this is for accidents resulting from hit-and-run and driver without insurance
Auto Insurance Premium
The insurance company’s charge for the coverage based on various criteria the price, which is auto insurance premium. This premium varies form state to state and company to company. The criteria with which the insurance company decides the premium are the chances of theft, the history of accidents, and other losses. The premium may also depend on the type and the amount of coverage you purchase. The other factors include, the driver’s age, driving record, gender, years of driving, etc.
Aviation Insurance
The commercial airlines hold this insurance on airplanes for any negligent act that may result in injury or loss and damage of property. This damage may be for the ground as well as air, however, the policy limits the individual pilots, and the geographical area covered.
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