Insurance Terms Glossary – GHI

Grace Period: A period of time after premium. due date during which a policy remains in force without penalty, even though the premium due has not been paid.

Group Life Insurance: Life insurance that a person is eligible to purchase through membership in a group. The group may not be formed just to buy insurance.

Guaranteed Renewable: A contract that gives the insured the right to continue in force by the timely payment of premiums for a substantial period of time as set forth in the contract. During that period of time, the insurer has no right to make any change in any provision of the contract other than a change in the premium rate for all insureds in the same class.

Hazard: Any factor tending to make a policy owner a less-desirable risk for the insuring company. May be Physical or Moral (health, occupation, dangerous sports, criminality, immorality).

Health Insurance: Broadly, coverages to provide benefits upon the occurrence of disabling sickness or accident, or accidental death or dismemberment, or loss of income due to disability.

Health Maintenance Organization (HMO): An organization of health providers. Each member pays a premium for which he receives medical care when desired. The emphasis is on preventative medicine as an alternative to traditional employee benefit plans. Employers of more than 25 persons are required to offer this alternative to employees, if an HMO is located in the area, but not if the cost exceeds that of present employee health plans.

Hospital Expense or Income Policy: A policy that pays a stated amount per week or month while the insured is hospitalized, without reference to expenses actually incurred. It might be viewed as a Disability Income policy with disability defined as hospitalization. Pays in addition to other policies.

Hospitalization Expense Policy: A policy that covers daily hospital Room and Board charges and also covers Miscellaneous Hospital Expenses (such as X-rays). It also often covers Emergency Treatment charges and many times will also include a Surgical benefit. A basic plan.

Immediate Annuity: A lump-sum Annuity on which the income payments to the annuitant are to begin at once.

Incontestable Clause: Provides that after the policy has been in force a certain length of time, the company can no longer contest it or void it, except for nonpayment of premiums. The time period is usually two years.

Indemnify: To restore the victim of a loss, in whole or in part, by payment, repair, or replacement.

Indemnity: Insurance is designed to restore the policyholder to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only and to avoid paying amounts that allow an insured to profit from a loss situation.

Individual Contract: A contract of Health insurance made with an individual that covers her and, in certain instances, specified members of the household. In general, any insurance policy except Group or Blanket.

Insurability: Acceptability of an applicant for insurance to the insurance company.

Insurable Interest: An interest in the life of an individual by which there will be a loss if the insured dies. The interest may be based on either an emotional or economic factor. Must exist at the time of application, not necessarily at the time of loss.

Insurance: A contract or device for the transfer of pure risk to an insurer, who agrees, for a consideration, to indemnify or pay a specified amount for losses suffered by the insured.

Insurance Age: An age upon which current premium rates may be established. It is commonly based on age at last birthday, age next birthday, or age at nearest birthday.

Insurance Policy: A contract, a legal document, which establishes the terms of agreement between the insurer and insured.

Insured: The party to an insurance arrangement to whom, or on behalf of whom, the insurance company agrees to indemnify for losses, provide benefits, or render service. In Prepaid Hospital Service plans, the insured is called the subscriber.

Insurer: The insurance company assuming risk and agreeing to pay claims or provide services.

Insuring Clause: The clause in a policy that specifies in brief the contract’s intent and benefits.

Irrevocable Beneficiary: Cannot be changed without named beneficiary’s consent.

Garage Policy: A policy that provides coverage for garage businesses (dealers, service stations, garages, parking lots, etc.). Includes coverage for Liability, Physical Damage, and Garagekeepers Losses arising out of owned, non owned, and hired autos.

Garagekeepers Liability: A coverage that is part of the Garage policy. Covers a garage risk’s Legal Liability for customers’ autos in the care, custody, or control of the garage. At the insured’s option, can also apply without regard to fault, for an additional premium.

General Agent (GA): An individual appointed by an insurer to administer its business in a given territory. A GA is responsible for building the agency and service force. Compensation is on a commission basis, although there may be additional expense allowances.

Hired and Non-Owned Auto Liability: Provides coverage to an employer for liability arising out of an employee’s use of his own auto in the employer’s business. May be included under a Business Auto Policy of added to’ a Commercial General Liability.

Hazard: Anything that increases the seriousness of a loss or increases the likelihood that a loss will occur (risk) due to a Peril. (For example: improperly stored combustible materials, worn tires, intentional abuse to insured property, unsafe structural changes)

Hold-Harmless Agreement: A contractual arrangement whereby one party assumes the Liability inherent in a situation, thereby relieving the other party of responsibility. (For example, a typical lease may provide that the lessee must “hold harmless” the lessor for any liability from accidents arising out of the premises)

Hull Insurance: In Ocean Marine and Aviation insurance, insurance against physical damage to plane or ship.

Imports And Exports: A category of the Inland and Ocean Marine Nationwide Definition, which is made up of risks eligible for Marine insurance.

Improvements and Betterments: Additions or changes made by an insured to a building that may or may not be owned by him. Cost arising from these changes may enhance values and thereby require special insurance consideration.

Indemnity: Insurance is designed to restore the policyholder to the same financial condition enjoyed prior to a loss. The intent is to cover the amount of the actual loss only and to avoid paying amounts that allow someone to profit from a loss situation.

Indirect Loss: Loss that is a result or consequence of a Direct Loss.

Inherent Vice: A condition or defect that exists within property from the beginning. A tendency of the property itself. (An example of inherent vice is the tendency of milk to sour) Insurance policies usually exclude inherent vice.

Inland Marine Insurance: A form of insurance originally designed as an extension of Marine coverage to insure transportation of goods over land. Today, it covers, in addition to goods in transit, a variety of portable property.

Insurability: Acceptability of an applicant for insurance to the insurance company.

Insurance: A social device that protects people against certain types of financial losses by transferring cure risk from individuals to a group. Insurance involves the pooling of a large number of individual risks. Funds to cover individual losses are raised by collecting small amounts of money (premiums) from a broad base of buyers.

Insurance Policy: A contract, a legal document, which establishes the terms of agreement between the insurer and insured.

Insured: The party to an insurance arrangement to whom, or on behalf of whom, the insurance the company agrees to indemnify for losses, provide benefits, or render service.

Insurer: The insurance company assuming risk and agreeing to pay claims or provide services.

Insuring Agreement: The section of an insurance policy that states which losses will be indemnified, what property is covered, which perils are insured against.