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Insurance Glossary Q - S
Q
Qualified Plan - A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
R
Reciprocal Exchange – An unincorporated group of individuals who mutually insure one another, each
separately assuming a share of each risk.
Recurrent Disability – A policy provision that specifies the period of time during which the recurrence of an
injury or illness will be considered a continuation of a prior period of disability.
Reduction – Lessening the possibility or severity of a loss.
Reinsurance – A form of insurance whereby one insurance company (the reinsurer) in consideration of a
premium paid to it, agrees to indemnify another insurance company (the ceding company) for part or all of its
liabilities from insurance policies it has issued.
Renewability Clause – A clause that defines the insurance company's and the insured’s right to cancel or
renew coverage.
Renewable Term – Insurance which can, at the election of the policyowner, be renewed at the end of a term
without evidence of insurability.
Representations – Statements made by the applicant on the insurance application that are believed to be
true, but are not guaranteed to be true.
Rescission – The termination of an insurance contract due either to material misrepresentation by the
insured or by fraud, misrepresentation, or duress on the part of the agent/insurer.
Reserve – An amount representing actual or potential liabilities kept by an insurer in a separate account to
cover debts to policyholders.
Residual Disability – Type of disability income policy that provides benefits for loss of income when a person
returns to work after a total disability, but is still not able to perform at the same level as before becoming
disabled.
Respite Care - A type of temporary health or medical care provided either by paid workers who come to the
home or by a nursing facility where a patient stays to give a caregiver a short rest.
Restorative Care – An area of dentistry that involves treatments that restore functional use to natural teeth
such as fillings or crowns.
Retention - A method of dealing with risk by intentionally or unintentionally keeping a portion of it for the
insured's account; the amount of responsibility assumed but not reinsured by the insurance company.
Rider – Any supplemental agreement attached to and made a part of the policy indicating the policy
expansion by additional coverage, or a waiver of a coverage or condition.
Right to Return (aka Free Look) – A period of time, usually required by law, during which a policyowner
may inspect a newly issued individual life or health insurance policy for a stated number of days and
surrender it in exchange for a full refund of premium if not satisfied for any reason.
Risk – Uncertainty as to the outcome of an event when two or more possibilities exist.
Risk, Pure – The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no
change.
Risk Retention Group – A liability insurance company owned by its members, which are exposed to similar
liability risks by virtue of being in the same business or industry.
Risk, Speculative – The uncertainty or chance of a loss occurring in a situation that involves the opportunity
for either loss or gain.
Risk, Standard - An applicant or insured who is considered to have an average probability of a loss based
on health, vocation and lifestyle.
Risk, Substandard - An applicant or insured who has a higher than normal probability of loss, and who may
be subject to an increased premium.
Rollover – Withdrawing the money from a qualified plan and placing it into another qualified plan.
S
Secondary Beneficiary – The person who is named to receive benefits upon the death of the insured if the
(primary) first-named beneficiary is no longer alive or does not collect all the benefits due to his/her own death.
Service Plans - Insurance plans where the health care services rendered are the benefits instead of
monetary benefits.
Settlement Options – Choices available to the insured/owner for distribution of insurance proceeds.
Sharing – A method of dealing with risk for a group of individual persons or businesses with the same or
similar exposure to loss who share the losses that occur within that group.
Short-Rate Cancellation – Canceling the policy with a less than proportionate return of premium.
Short-Term Disability Insurance – A group or individual policy that covers disabilities of 13 to 26 weeks,
and in some cases for a period of up to two years.
Sickness – A physical illness, disease, or pregnancy, but not a mental illness.
Single Premium Whole Life (SPWL) – A life insurance policy designed to provide a level death benefit to
the insured’s age 100 for a one-time, lump sum payment.
Skilled Nursing Care – Daily nursing care or skilled care, such as administration of medication, diagnosis, or
minor surgery that is performed by or under the supervision of a skilled professional.
Spendthrift Clause – A clause that prevents the debtors of a beneficiary from collecting the benefits before
he/she receives them.
Standard Provisions – Requirements approved by state law that must appear in all insurance policies.
Standard Risk – An applicant or insured who is considered to have an average probability of a loss based on
health, vocation and lifestyle.
Stock Companies – Companies owned by the stockholders whose investments provide the capital necessary
to establish and operate the insurance company.
Straight Life – A basic policy that charges a level annual premium for the lifetime of the insured and provides
a level, guaranteed death benefit.
Subrogation – The legal process by which an insurance company seeks recovery of the amount paid to the
insured from a third party who may have caused the loss.
Substandard Risk – An applicant or insured who has a higher than normal probability of loss, and who may
be subject to an increased premium.
Supplemental Illustration – An illustration furnished in addition to a basic illustration that may be presented
in a different format than the basic illustration, but may only depict a scale of nonguaranteed elements that is
permitted in a basic illustration.
Surrender – An act of giving up a life policy, in which the insurer will pay the insured the cash value the
policy has built up.
Q
Qualified Plan - A retirement plan that meets the IRS guidelines for receiving favorable tax treatment.
R
Reciprocal Exchange – An unincorporated group of individuals who mutually insure one another, each
separately assuming a share of each risk.
Recurrent Disability – A policy provision that specifies the period of time during which the recurrence of an
injury or illness will be considered a continuation of a prior period of disability.
Reduction – Lessening the possibility or severity of a loss.
Reinsurance – A form of insurance whereby one insurance company (the reinsurer) in consideration of a
premium paid to it, agrees to indemnify another insurance company (the ceding company) for part or all of its
liabilities from insurance policies it has issued.
Renewability Clause – A clause that defines the insurance company's and the insured’s right to cancel or
renew coverage.
Renewable Term – Insurance which can, at the election of the policyowner, be renewed at the end of a term
without evidence of insurability.
Representations – Statements made by the applicant on the insurance application that are believed to be
true, but are not guaranteed to be true.
Rescission – The termination of an insurance contract due either to material misrepresentation by the
insured or by fraud, misrepresentation, or duress on the part of the agent/insurer.
Reserve – An amount representing actual or potential liabilities kept by an insurer in a separate account to
cover debts to policyholders.
Residual Disability – Type of disability income policy that provides benefits for loss of income when a person
returns to work after a total disability, but is still not able to perform at the same level as before becoming
disabled.
Respite Care - A type of temporary health or medical care provided either by paid workers who come to the
home or by a nursing facility where a patient stays to give a caregiver a short rest.
Restorative Care – An area of dentistry that involves treatments that restore functional use to natural teeth
such as fillings or crowns.
Retention - A method of dealing with risk by intentionally or unintentionally keeping a portion of it for the
insured's account; the amount of responsibility assumed but not reinsured by the insurance company.
Rider – Any supplemental agreement attached to and made a part of the policy indicating the policy
expansion by additional coverage, or a waiver of a coverage or condition.
Right to Return (aka Free Look) – A period of time, usually required by law, during which a policyowner
may inspect a newly issued individual life or health insurance policy for a stated number of days and
surrender it in exchange for a full refund of premium if not satisfied for any reason.
Risk – Uncertainty as to the outcome of an event when two or more possibilities exist.
Risk, Pure – The uncertainty or chance of a loss occurring in a situation that can only result in a loss or no
change.
Risk Retention Group – A liability insurance company owned by its members, which are exposed to similar
liability risks by virtue of being in the same business or industry.
Risk, Speculative – The uncertainty or chance of a loss occurring in a situation that involves the opportunity
for either loss or gain.
Risk, Standard - An applicant or insured who is considered to have an average probability of a loss based
on health, vocation and lifestyle.
Risk, Substandard - An applicant or insured who has a higher than normal probability of loss, and who may
be subject to an increased premium.
Rollover – Withdrawing the money from a qualified plan and placing it into another qualified plan.
S
Secondary Beneficiary – The person who is named to receive benefits upon the death of the insured if the
(primary) first-named beneficiary is no longer alive or does not collect all the benefits due to his/her own death.
Service Plans - Insurance plans where the health care services rendered are the benefits instead of
monetary benefits.
Settlement Options – Choices available to the insured/owner for distribution of insurance proceeds.
Sharing – A method of dealing with risk for a group of individual persons or businesses with the same or
similar exposure to loss who share the losses that occur within that group.
Short-Rate Cancellation – Canceling the policy with a less than proportionate return of premium.
Short-Term Disability Insurance – A group or individual policy that covers disabilities of 13 to 26 weeks,
and in some cases for a period of up to two years.
Sickness – A physical illness, disease, or pregnancy, but not a mental illness.
Single Premium Whole Life (SPWL) – A life insurance policy designed to provide a level death benefit to
the insured’s age 100 for a one-time, lump sum payment.
Skilled Nursing Care – Daily nursing care or skilled care, such as administration of medication, diagnosis, or
minor surgery that is performed by or under the supervision of a skilled professional.
Spendthrift Clause – A clause that prevents the debtors of a beneficiary from collecting the benefits before
he/she receives them.
Standard Provisions – Requirements approved by state law that must appear in all insurance policies.
Standard Risk – An applicant or insured who is considered to have an average probability of a loss based on
health, vocation and lifestyle.
Stock Companies – Companies owned by the stockholders whose investments provide the capital necessary
to establish and operate the insurance company.
Straight Life – A basic policy that charges a level annual premium for the lifetime of the insured and provides
a level, guaranteed death benefit.
Subrogation – The legal process by which an insurance company seeks recovery of the amount paid to the
insured from a third party who may have caused the loss.
Substandard Risk – An applicant or insured who has a higher than normal probability of loss, and who may
be subject to an increased premium.
Supplemental Illustration – An illustration furnished in addition to a basic illustration that may be presented
in a different format than the basic illustration, but may only depict a scale of nonguaranteed elements that is
permitted in a basic illustration.
Surrender – An act of giving up a life policy, in which the insurer will pay the insured the cash value the
policy has built up.
| Trout Insurance is a full line insurance agency located in Asheville, NC. Trout Insurance offers life, health, disability, Medicare supplement, long term care insurance home and auto insurance for individuals as well as college funding and retirement planning. Christopher Smith, Dave Trout, Jan Trout and Ralph Redpath are independent insurance agents with Trout Insurance. Christopher Smith specializes in group health insurance, employee benefits, insurance needs for business owners, key person disability insurance, disability buy out insurance, individual life insurance, short term health insurance, disability insurance, long term care insurance, group long term care insurance and critical illness insurance. Dave Trout specializes in life and disability insurance, Medicare supplement insurance, retirement planning for individuals and businesses, commercial business insurance and college funding. Jan Trout specializes in individual health insurance. Ralph Redpath specializes in home and auto coverage. Web site design by Christopher Smith. Agency photo by Jason Sanford. |
