East Granby Connecticut Auto Insurance

Insurance Information
Death and Dismemberment
An added benefit rider that can be attached to a life insurance policy that provides monetary payment for the loss of function of vital limbs or organs.

Death Benefit
A payment made to a designated beneficiary upon the death of the employee annuitant.

Debenture
A bond that is backed only by the general credit of the issuing corporation. No specific property is pledged as security behind the loan.

Declarations
Statements in an insurance contract that provide information about the property or life to be insured. Used for underwriting and rating purposes and for identification of the property or life to be insured.

Declination
The insurer's refusal to insure an individual after careful evaluation of the application for insurance and any other pertinent factors.

Deductible
An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss.

Deferred Annuity
An annuity providing for the income payments to begin at some specified future date.

Depreciation
A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss. (See Actual Cash Value)

Direct Loss
Financial loss in damages that results directly from an insured peril.

Disability
A physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total. (See Partial Disability; Total Disability.)

Dismemberment
Loss of body members (limbs), or use thereof, or loss of sight due to injury.

Disposable Personal Income
The personal income less personal tax and other financial obligations or payments. It is the income available to people for spending and saving.

Double Indemnity
A policy provision usually associated with death, which doubles payment of a designated benefit when certain kinds of accidents occur.

Down Payment
The premium deposit paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when billed.

Insurance Information (cont'd)
Salvage
Recovery made by an insurance company by the sale of property which has been taken over from the insured as a part of loss settlement.

Self- Administered (Trusteed or Directly Invested) Plan
A plan funded through a fiduciary, generally a bank, but sometimes a group of individuals, which directly invests the accumulated funds. Retirement payments are made from the fund as they fall due.

Self-Administration
The procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

Self-Insurance
A program for providing group insurance with benefits financed entirely through the internal means of the policyholder, in place of purchasing coverage from commercial carriers.

Senior Citizen Policies
Contracts insuring persons 65 years of age or more. In most cases, these policies supplement the coverage afforded by the government under the Medicare program.

Separate Account
An asset account established by a life insurance company separate from other funds, used primarily for pension plans and variable life products. This arrangement permits wider latitude in the choice of investments, particularly in equities.

Service-Type Plans
Plans that provide their benefits in the form of services rendered rather than cash (for example, Blue Cross and Blue Shield).

Settlement Options
The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid.

Short-Term Disability Income Insurance
The provision to pay benefits to a covered disabled person as long as he/she remains disabled up to a specified period not exceeding two years.

Sickness Insurance
A form of health insurance providing benefits for loss resulting from illness or disease.

Skip person
a beneficiary who is at least two generations younger than the person making the transfer.

Social Security Freeze
A long- term disability policy provision which establishes that the offset from benefits paid by Social Security will not be changed regardless of subsequent changes in the Social Security law.

Social Security Option
An option under which the employee may elect that monthly payments of an annuity before a specified age (62 or 65) be increased, and that payments thereafter be decreased to produce, as nearly as practical, a level total annual annuity to the employee, including Social Security benefits when they become due.

Soft Market
That part of the insurance sales cycle in which competition is at a maximum as insurance companies use their excess capacity to sell more policies at lower prices (see "Hard market").

Special Damages
Compensation awarded for actual economic losses, such as medical expenses and lost wages. (See general damages)

Special Risk Insurance
Coverage for risks or hazards of a special or unusual nature.

Split Funding
The use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to the pension plan are paid to a life insurance company and the remainder of the contributions invested through a corporate trustee, primarily in equities.

Spouse's Benefit
Payments to the surviving spouse of a deceased employee, usually in the form of a series of payments upon meeting certain requirements and usually terminating with the survivor's remarriage or death.

Standard Insurance
Insurance written on the basis of regular morbidity underwriting assumption used by an insurance company and issued at normal rates.

Standard Markets
insurance companies for which the vast majority of people qualify

Standard Provisions
A set of policy provisions prescribed by former laws setting forth certain rights and obligations of both the insured and the company under an individual policy of health insurance. These were originally introduced in 1912 and have now been replaced by the Uniform Provisions.

Standard Risk
A person who, according to a company's underwriting standards, is entitled to purchase insurance protection without extra rating or special restrictions.

State-of-the-Art Defense
An argument used in product liability cases that the technology needed to avoid the loss in a particular case did not exist at the time of the product's manufacture

State Disability Plan
A plan for accident and sickness, or disability insurance required by state legislation of those employers doing business in that particular state.

State Fund
A fund set up by a state government to provide a specific line or lines of insurance. Some state permit private insurers to compete with the state fund.

State Insurance Department
A department of a state government whose duty is to regulate the business of insurance and give the public information on insurance.

Statutory Accounting
Special accounting practices for insurance companies required by state law and designed to provide greater protection for the public against potential insolvency of these essential institutions.

Statutory Accounting Principles (SAP)
Principles required by statute which must be followed by an insurance company when submitting its financial statements to the various state insurance departments. Such principles differ from the Generally Accepted Accounting Principles (GAAP).

Statutory Underwriting Profit or Loss
Premiums earned less losses and expenses.

Step-Rate Premium
A rating structure in which the premiums increase periodically at pre-determined times such as policy years or attained ages.

Step-up in basis
An increase in the tax basis of property to the value claimed in the taxable estate of a decedent.

Stock Company
A company organized and owned by stockholders, as distinguished from the mutual form of company which is owned by its policyholders.

Stock Exchange
An organization that provides a facility for buyers and sellers of listed securities to come together to make grades in those securities.

Stockholder (or shareholder)
A person who owns shares of stock in a corporation.

Stock Insurance Company
A company in which the legal ownership and control is vested in the stockholders.

Stock Life Insurance Company
A life insurance company owned by stockholders who elect a board to direct the company's management. Stock companies, in general, issue nonparticipating insurance, but may also issue participating insurance.

Stock Redemption Plan
An entity purchase form of buy-sell agreement within a corporation that involves the corporation buying back shares from a departing owner.

Straight Life Insurance
Whole life insurance on which premiums are payable for life.

Strict Liability
Liability for damages even though fault or negligence cannot be proven.

Subrogation
Process by which one insurance company seeks reimbursement from another company or person for a claim it has already paid.

Substandard (Impaired Risk)
A risk that cannot meet the normal health requirements of a standard health insurance policy. Protection is provided in consideration of a waiver, a special policy form, or a higher premium charge. Substandard risks may include those persons who engage in certain sports and persons who are rated because of poor habits or morals.

Substandard Insurance
Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates.

Substandard Risk
An individual, who, because of health history or physical limitations, does not measure up to the qualification of a standard risk.

Supplementary Contract
An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

Surety Bond
An agreement providing for monetary compensation in the event of a failure to perform specified acts within a stated period. The surety company, for example, becomes responsible for fulfillment of a contract if the contractor defaults.

Surgical Expense Insurance
Health insurance policies, which provide benefits toward the physician's or surgeon's operating fees. Benefits may consist of scheduled amounts for each surgical procedure.

Surgical Schedule
A list of cash allowances attached to the policy, which are payable for various types of surgery, with a maximum amount based upon the severity of the operation.

Surplus
The net worth of a company, i.e. the amount by which assets exceed liabilities. Adequate net worth is necessary for the protection of policyholders against unforeseen losses.

Surplus Lines
(1) A risk or a part of a risk for which there is no normal insurance market available. (2) Insurance written by non-admitted insurance companies.