Glossary of Insurance Terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z #
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Paid-Up Additions: Additional amounts of insurance protection purchased with the dividends from your policy.
Paid-Up Life Insurance: Insurance on which no further premiums are due.
Participating Insurance: Insurance that has the possibility of paying dividends to its policyholders. Also called a par policy.
Payout Method: Same as settlement option
Per Person Limit: This refers to the cap amount an insurance company will pay for any one person’s injuries arising from a single incident.
Permanent Life: A phrase that covers any form of life insurance with the exception of term.
Per Occurrence Limit: This refers to the cap amount an insurance company will pay for all claims arising from a single incident. In an automobile accident, it comprises bodily injuries sustained by all parties. When Bodily Injury coverage is purchased in split limits, the second limit is the “per occurrence” limit: e.g. $100,000(per person)/$300,000(per occurrence)
Personal Auto Policy: The most common auto insurance policy sold today. Often referred to as “PAP,” this policy is written in simple wording and provides coverage for liability, medical payments, uninsured/underinsured motorist coverage, and physical damage protection.
Personal Injury Protection: The name usually given to no-fault benefits in states that have enacted mandatory or optional no-fault auto insurance laws. Personal Injury Protection (PIP) usually includes benefits for medical expenses, loss of income from work, essential services, accidental death, funeral expenses, and survivor benefits.
Personal Property: Any property of an insured other than real property. Homeowner policies protect the personal property of family members, and commercial forms are used to protect many types of business personal property of an insured.
Physical Damage: Damage to your covered vehicle from perils including (but not limited to) collision or upset with another vehicle object, fire, vandalism and theft.
Physical Examination: Physical examination, as well as information about your medical history, may be required to qualify for health insurance. The requirements will vary for individual or group coverage, for different insurance companies, and for very large or very small groups.
PIP (Personal Injury Protection): Commonly referred to as “no-fault” insurance. This was designed to pay promptly — regardless of fault or negligence — for actual economic losses (e.g., medical expenses, lost earnings, and other reasonable and necessary expenses related to injuries sustained) to a driver or passenger injured in the car and to pedestrians injured by your car, because of its use or operation. It applies to personal injuries only, not for physical damages to the vehicle.
Point-of-Service (POS) Plans: These plans allow members the option of using services outside the HMO network without prior approval
Policy Dividend: A partial premium refund on a participating life insurance policy
Policy Loan: A loan made by a life insurance company to the policyholder on the cash value of the policy.
Policy Period: The period of time in which a policy is in effect.
Policy Reserves: Funds held by a life insurance company specifically to fulfill its policy obligations.
Policy: The written documents of a contract for insurance between the insurance company and the insured. Such documents include forms, endorsements, riders and attachments.
Policyholder: One who maintains ownership of an insurance policy. This may refer to the policy owner or those covered under the policy.
Policyholder: The person or party who owns an individual insurance policy. This person may be the insured, a relative, the beneficiary, a corporation, or another person.
Portability: Under HIPAA, workers with pre-existing medical conditions must receive credit for time in a previous health plan if they join an employer plan.
Pre-Certification: A requirement that you notify the insurance company for its approval before you check into a hospital, have elective surgery, visit specialists, have expensive tests (e.g., MRI). Pre-certification does not guarantee the insurance company will pay the medical bills. Also called “utilization review”.
Pre-existing Condition: Health problem/condition/illness you had prior to applying for insurance and for which you received medical advice, diagnosis, care or treatment. Policies can exclude coverage of any medical condition for a period of time.
Preferred Provider Organization (PPO): A network of doctors, hospitals, and suppliers (preferred providers) who agree to provide services to members of a health plan for discounted fees.
Preferred Risk: A person less likely than the average person, to experience risk. A preferred risk usually qualifies for a lower premium.
Preferred Risk: Any risk considered to be better than the standard risk on which the premium rate was calculated.
Premium Expense Charges: An amount deducted from each premium payment that reduces the amount credited to the policy.
Premium Waiver Provision: An optional provision that takes effect if the policy owner becomes disabled. The disabled person will not have to pay premiums for the duration of the disability, including lifetime disability.
Premium: The amount you pay for insurance.
Premium: The price of insurance an insured person pays for a specified risk for a specified period of time.
Pre-Need Contract: A contract with a funeral home that makes it possible to pay your funeral expenses in advance.
Primary Care Physician (Gatekeeper): The physician selected by HMO members who serves as a personal doctor and provides all medical treatments and any referrals to medical specialists.
Primary Plan: This is the plan that pays first when you are covered by more than one insurance plan
Prior Qualifying Coverage: Health plan coverage that was in effect before the effective date of the current or new coverage
Private Passenger Automobile: A four-wheeled motor vehicle that is subject to motor vehicle registration and used for private personal use.
Pro Rata Cancellation: Revocation of a policy by an insurance company that returns the unearned premium to the policyholder.
Pro Rata Cancellation: Termination of an insurance contract before the policy expiration date on which the premium returned to the insured person is adjusted in proportion to the amount of time the policy was in effect.
Proof of Loss: Documents that you give the insurer to support your request for payment of losses.
Property Damage Liability Insurance: Protection against liability for damage to another’s tangible property, including loss of use. Although this coverage is different than liability for bodily injury to another person, Bodily Injury and Property Damage Liability protection are generally written together.
Property Damage Liability: This coverage protects you from claims and lawsuits by people whose property is damaged as a result of an accident you caused.
Provider: A doctor, hospital, x-ray company, pharmacy, etc. that provides medical health care service.
