Insurance Terms Glossary – MNO

Major Medical Insurance: A type of Health insurance that provides benefits for most types of medical expenses incurred up to a high limit, subject to a deductible. Such contracts may contain a Percentage Participation clause (sometimes called the Coinsurance clause). A Major Medical policy pays expenses both in and out of the hospital.

Material Misrepresentation: A misrepresentation that would have been important or essential to the underwriter’s decision to issue the policy.

Maturity: A Life policy is mature when the face amount is payable. Whole Life matures at age 100.

Medicaid: A medical-benefits program administered by states and subsidized by the federal government. Under this plan, various medical expenses will be paid to those who qualify, regardless of age, subject to an income/asset test.

Medicare Benefits: Benefits provided by a federal program as part of the Social Security program. It applies to persons over 65 years of age and certain disabled beneficiaries under the Social Security program.

Medical Examination: Examination by a physician on behalf of an applicant for insurance or in substantiation of a claim.

Misrepresentation: The use of written or oral statements of the insured or insurance company misrepresenting the risk, terms, coverages, benefits, privileges or estimated future dividends of any policy.

Mode Premium: Premium paid according to the Mode of Payment selected by the policy owner, that is, monthly, quarterly, semi-annually, or annually.

Mortgage Insurance Policy: In Life and Health insurance, a policy from which the benefits are intended to pay off the balance due on a mortgage or meet the payments on a mortgage as they fall due upon or after the death or disability of the insured.

Mutual Insurance Company (Insurer): An incorporated insurance company whose governing body is elected by the policyholders. The policyholders share in the success of the company through possible receipt of dividends.

Non-cancelable: A contract of Health insurance that the insured has a right to continue in force by payment of premiums, as set forth in the contract, for a substantial period of time, and that the insurer has no right to change any provision’ of the contract.

Noncontributory: Any plan or program of insurance (usually Group) for which the employer pays the entire premium and the employee contributes no part of the premium. 100% participation is required.

Non-forfeiture Option: A legal provision whereby the policy owner may take the accumulated values in a policy as I) Paid-Up Permanent insurance for a lesser amount; 2) Extended Term insurance, or 3) LumpSum Payment of cash value, less any unpaid premiums or outstanding loans.

Non-medical: Insurance issued without a medical exam.

Nonparticipating: Insurance that does not pay policy dividends. Sometimes called a Non-Par policy.

Nonprofit Insurance Companies: Companies organized under special state laws to supply medicalexpense insurance, usually on a Service basis. “Blue plans” are a historical example.

Nonresident Producer: A producer licensed in a state in which he is not a resident.

Other Insurance: The existence of another contract covering the same interest and perils. Outpatient: A patient who is not a bed patient in the hospital in which she receives treatment.

Malpractice Insurance: A form of Professional Liability insurance used to insure professionals including physicians, dentists, and druggists against their Liability for professional misconduct or lack of ordinary skill.

Marine Insurance: A form of insurance primarily designed to cover property in transport over land or sea.

Material Fact: A fact that, had the company known it, would have caused it to decline the risk or include entirely different provisions than those currently included.

Misrepresentation: The use of written or oral statements of the insured or insurance company misrepresenting the risk, terms, coverages, benefits, privileges, or estimated future dividends of any policy.

Moral Hazard: The hazard that is created by a dishonest individual who would be willing to create a loss situation on purpose just to collect from the insurance company.

Mortgagee Rights: Rights granted to a mortgagee (lender), under a property contract issued to a mortgagor, by virtue of the mortgagee’s financial interest in the property.

Mutual Insurance Company (Insurer): An incorporated insurance company, without capital stock, whose governing body is elected by the policyholders. The policyholders own the company and they might share in the success of the company through dividends.

Mysterious Disappearance: Vanishing of property with no known explanation.

Named Insured: Any person, firm, or corporation, or any member thereof, designated by name as insured in a policy.

National Flood Insurance Program: The federal government’s program to provide Flood insurance at subsidized rates.

Negligence: Failure to use that degree of care that an ordinary person of-reasonable prudence would use under the same given circumstances. Negligence may be constituted by acts of either omission or commission or both.

No-Fault Insurance: A form of Automobile insurance mandated by law in many states whereby an insurance company reimburses its insured for auto losses, regardless of fault, and without resort to subrogation.

Non-owners Insurance: Protection for the policyholder against claims for bodily injury and property damage liability caused by his/her employees or others using autos not owned or hired by the insured while conducting business. A Named Nonowner policy protects an individual who drives only borrowed or rented cars.

Non-resident Agent: An agent licensed in a state in which she is not a resident.

Obligee: In bonds, the party to whom the principal makes the promise, and for whose protection the bond is being written.

Occupancy: Type and character of the use of property in question.

Other Insurance: The existence of another contract covering the same interest and Perils. Sometimes called Pro-Rata Liability, because the insurers pay claims according to the proportion of premiums paid to each. (Remember, you can’t collect in total more than you lost.)

Owners And Contractors Protective Liability: Part of a Commercial General Liability policy that protects an owner or general contractor against liability arising out of the acts of contractors or subcontractors. It is also known as Independent Contractors Liability coverage.