Glossary of terms used on this site
|Section 1035 Exchange|
Part of the Internal Revenue Code that defines the conditions a life policy must satisfy to qualify as a life insurance contract, which has tax advantages.
Having sufficient assets--capital, surplus, reserves--and being able to satisfy financial requirements--investments, annual reports, examinations--to be eligible to transact insurance business and meet liabilities.
Auto insurance for average drivers with relatively few accidents during lifetime.
|State of Domicile||
The state in which the company is incorporated or chartered. The company also is licensed (admitted) under the state's insurance statutes for those lines of business for which it qualifies.
A reserve, either specific or general, required by law.
|Stock Insurance Company||
An incorporated insurer with capital contributed by stockholders, to whom earnings are distributed as dividends on their shares.
Any provision in a policy designed to cut off an insurer's losses at a given point.
The right of an insurer who has taken over another's loss also to take over the other person's right to pursue remedies against a third party.
In hospital income protection, when confinements in a hospital are due to the same or related causes and are separated by less than a contractually stipulated period of time, they are considered part of the same period of confinement.
The amount by which assets exceed liabilities.
A set amount of time during which you have to keep the majority of your money in an annuity contract. Most surrender periods last from five to 10 years. Most contracts will allow you to take out at least 10% a year of the accumulated value of the account, even during the surrender period. If you take out more than that 10%, you will have to pay a surrender charge on the amount that you have withdrawn above that 10%.