LIC AAO EXAM includes General Knowledge, Current Affairs Test ,I am giving hereunder Insurance Terms

A

ACCELERATED DEATH BENEFIT:

A percentage of the policy?s face amount, discounted for interest, that can be paid to the insured prior to death, under specified circumstances. This is in lieu of a traditional policy that pays beneficiaries after the insured?s death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries.

ACCIDENT AND HEALTH INSURANCE:

Coverage for acci-dental injury, accidental death, and related health expenses. Benefits will pay for preventative services, medical expenses, and catastrophic care, with limits.

ACCIDENTAL DEATH BENEFIT:

An endorsement that pays the beneficiary an additional benefit if the insured dies from an accident.

ACCOUNTS RECEIVABLE (DEBTORS) INSURANCE:

Indemnifies for losses that are due to an inability to collect from open commercial account debtors because records have been destroyed by an insured peril.

ACTS OF GOD:

Perils that cannot reasonably be guarded against, such as floods and earthquakes.

ACTUAL CASH VALUE:

A form of insurance that pays damages equal to the replacement value of damaged property minus depreciation.

ACTUAL LOSS RATIO:

The ratio of losses incurred to premiums earned actually experienced in a given line of insurance activity in a previous time period.

Actuarial COST ASSUMPTIONS:

Assumptions about rates of investment earnings, mortality, turnover, salpatterns, probable expenses, and distribution or actual ages at which employees are likely to retire.

ACTUARY :

An insurance professional skilled in the analysis, evaluation, and management of statistical information. Evaluates insurance firms? reserves, determines rates and rating methods, and determines other business and financial risks.

ADDITIONAL INSUREDS:

Persons who have an insurable interest in the property/person covered in a policy and who are covered against the losses outlined in the policy. They usually receive less coverage than the pri-mary named insured.

ADVERSE SELECTION:

The tendency of those exposed to a higher risk to seek more insurance coverage than those at a lower risk. Insurers react either by charging higher premiums or not insuring at all. In the case of natural disasters, such as earthquakes, adverse selection concentrates risk instead of spreading it. Insurance. works best when risk is shared among large numbers of policyholders.

AFFIRMATIVE WARRANTY:

An agreement between an insurance company and an agent, granting the agent authority to write insurance from that company. It specifies the duties, rights, and obligations of both parties.

AGENT:

Insurance is sold by two types of agents: inde-pendent agents, who are self-employed, represent several insurance companies and are paid on commission, and exclusive or captive agents, who represent only one insurance company and are either salaried or work on commission. Insurance companies that use exclusive or captive agents are called direct writers.

AGGREGATE DEDUCTIBLE:

A type of deductible that applies for an entire year in which the insured absorbs all losses until the deductible level is reached, at which point the insurer pays for all loses over the specified amount.

ANCILLARY CHARGES:

In hospital insurance, covered charges other than room and board.

ANNUAL STATEMENT:

Summary of an insurer?s or rein-surer?s financial operations for a particular year, including a balance sheet.

ANNUAL-PREMIUM ANNUITY:

An annuity whose purchase price is paid in annual installments.

ANNUITANT:

: An individual receiving benefits under an annuity.

ANNUITY:

A life insurance company contract that pays periodic income benefits for a specific period of time or over the course of the annuitant?s lifetime. These payments can be made annually, quarterly or monthly.

From a life insurer?s viewpoint, an annuity presents the opposite of mortality risk from a life insurance policy. Life insurance pays a benefit when the policyholder dies. An annuity pays benefits as long as the annuitant lives. With both products, the insurer?s profit or loss depends on whether it made correct assumptions about the policyholder?s life expectancy and the company?s future investment returns.

ANNUITY CERTAIN:

An annuity that is payable for a specified period of time, without regard to the life or death of the annuitant.

ANNUITY UNITS:

A measure used in valuing a variable annuity during the time it is being paid to the annui-tant. Each unit?s value fluctuates with the performance of an investment portfolio.

APPORTIONMENT:

The dividing of a loss proportion-ately among two or more insurers that cover the same loss.

APPRAISAL:

A survey to determine a property?s insura-ble value, or the amount of a loss.

ARBITRATION:

Procedure in which an insurance company and the insured or a vendor agree to settle a claim dispute by accepting a decision made by a third party.

Arson:

The deliberate setting of a fire

ASSESSABLE POLICY:

A policy subject to additional charges, or assessments, on all policyholders in the company.

ASSIGN:

To use life insurance policy benefits as collat-eral for a loan.

ASSIGNEE:

The party to whom the rights of the insured under a policy are transferred.

ASSIGNMENT:

A clause that allows the transfer of rights under a policy from one person to another, usually by means of a written document.

ASSIGNOR:

The party granting the transfer of the insured?s rights to the assignee

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