Our Life Insurance Glossary Helps Clear up Confusion

A life insurance glossary can help you gain a better understanding of the subject.  I will be the first to admit that life insurance is not a sexy subject.  I don’t dare bring it up at parties, as the few times I did mention it at social functions, it was as if I told people I had the plague.  Look, I enjoy what I do for a living because I know I am helping people, but I know it’s not a subject many people enjoy discussing.
Part of the problem, I found, is in the terminology.  Insurance has a language not spoken by most folks and contains many specialized words that might as well be Martian to them.  In my experience, any subject can be learned by most people, but in order to do so, the specialized words of the subject need to be learned.  That is why we put together the Life Insurance Glossary on LifeInsure.com.  We know that an educated consumer makes the best decisions and purchasing life insurance is not a decision that should be made lightly.
I’m not suggesting that you become a life insurance expert..  However, I am suggesting that you learn enough of the language to understand the intricacies of a life insurance policy.  Our life insurance glossary is alphabet-tabbed to make searching for a word a simple process.  Find and clear most of the insurance terms on this website and you will be armed with ammunition to speak to a life insurance agent.
However, I must offer this disclaimer:  I am not responsible for the response you get at parties when you start showing off your knowledge about life insurance.  Don’t say I didn’t warn you.

This entry was posted in Life Insurance Blog, life insurance education and tagged life insurance, life insurance companies, life insurance policy. Bookmark the permalink.

Expenditures of insurers on agent's commission amounted to 11.5% of total premiums in 2011

In 2011, 7,704 insurance agents have been working on the insurance market of Uzbekistan. Of these, 6,078 or 78.9% were individuals, and 1626 (21.1%) were legal entities. Of all insurance agents 41.1% worked in rural areas of the country.

According to experts of IRA SAIPRO, insurance agents on the market provide almost all the proceeds of insurance premiums for the massive insurance. As is known, the payment of labor or services of an insurance agent is carried out in the form of commission by agreement with the insurance company from the proceeds of insurance premiums provided by an insurance agent. However, according to law the amount of agent's fee shall not exceed 25.0% of the amount of insurance premiums received.

In 2011 expenses of insurance companies for payment of agency fees amounted to 11.9% of total revenues. In the previous year this figure was 10.6%.

Insurance lobbyists were briefed by mandarins over legal reform

Documents reveal Ministry of Justice officials granted access to insurers when drawing up plans for civil litigation changes

Insurers were given extensive access to civil servants drafting the flagship legal aid bill that would benefit private industry to the tune of hundreds of millions of pounds, new documents reveal. The information helped the industry choreograph an appearance on Radio 4's Today programme.
Official papers show Robert Wright, the head of civil litigation funding and costs at the Ministry of Justice and the official in charge of the controversial reforms, and his team gave the Association of British Insurers, the industry lobbying body, regular information on their plans.
The documents, obtained under freedom of information, reveal:
• Policy officials were pressing Kenneth Clarke, the justice secretary, to attend insurance industry events with emails telling the ABI that they were "working on" getting ministers to attend events before the Tory party conference last year.
• In May 2011, the government was in talks with the insurance industry over controversial plans to force defendants to pay their costs even if they win a case – a change known as "qualified one-way cost shifting". The Civil Justice Council, the body tasked with investigating these proposals, was only informed by ministers in July.
• On 8 September 2011, Wright sent the ABI a press release outlining the proposed ban on referral fees – payments for finding victims of road accidents who could sue for compensation, which the industry had long advocated – the day before it became public.
Twenty minutes later, the ABI returned the favour, sending the MoJ its press release, adding it had briefed the BBC's Today programme and they would use the information "as a basis" for interviewing the minister.
The 118 pages of official papers, record discussions between insurers, their lawyers and government officials working under Jonathan Djanogly, the justice minister. Djanogly gave up regulating parts of the industry after a Cabinet Office investigation into his personal insurance holdings in October.
The legal aid bill is being debated in the Lords until Monday. Financial firms with insurance interests have given the Tories £5.4m in the last decade, £4.9m of that since David Cameron became leader in December 2005.
The prime minister has invited the chief executives from the insurance industry into Downing Street next month to discuss how to deal with the burgeoning costs of civil ligitation.
Lord McNally, the Lib Dem peer piloting the bill through the upper house, had insisted ministers "will not pander to or give special access to 'vested interests' such as the Law Society and the Bar Council".
Desmond Hudson, the Law Society's chief executive, said: "This looks like being legislation for the insurance industry, by the insurance industry.
"It is an unusual and unsatisfactory notion of democracy when insurers can write the laws of the land. The Law Society has campaigned and lobbied for changes in the interests of access to justice … the government must be even-handed with all interested parties of the bill."
But a spokesperson for the ABI said: "We have not said anything in private that we have not said in public and we have nothing to hide. We make no apology for providing evidence to policymakers to tackle the compensation culture and help reduce motor insurance premiums. The ABI, unlike the claimant lawyer lobby, has provided the evidence and analysis to support our public policy positions rather than rely on rhetoric and anecdote."
Labour claimed policy was being made to favour "Tory paymasters". Andy Slaughter, Labour's justice spokesman, said: "The justice system is meant to serve victims of harm, not the insurers of those that caused that harm. The Tory party seems obsessed with favouring financial services companies and their corporate donors over ordinary people.
"As with brutal cuts to legal aid, this shows the true colours of Ken Clarke's Ministry of Justice, reconfiguring the rules of the game to favour large public and private corporations over citizens."
An MoJ spokesman denied that the insurance industry had been given privileged access to the ministry. "Ongoing dialogue between government and stakeholders is an important part of policymaking. It is normal business to listen to a range of views."

Pet insurance claims may be rising, but vets are not to blame

Higher veterinary bills are due to more expensive treatments, not bigger profits

You report on the growth in pet insurance fraud, including cases where, you allege, "cats, dogs and horses are facing deliberate injury – or even paying the ultimate price – as owners seek payouts" (Conman's best friend? Pet insurance fraud rises fourfold, Money, 19 November). While, as president of the Royal College of Veterinary Surgeons, I am unable to comment on the figures from the Association of British Insurers, as a veterinary surgeon for some 41 years I can say most owners I have met care passionately about their animals.
You say that, alongside the pressures of recession, "rising vet bills are another factor behind soaring claims". Part of the reason for this, you say, is that "unlike GPs, vets are not required to choose the cheapest drug. A vet could choose more expensive drugs than necessary if they are aware that the animal is insured." In fact, vets are not free to choose the cheapest medicine available, as they operate under a cascade system laid down by the Veterinary Medicines Directorate. This states that the medicines tested and licensed for use in any particular species of animal, whether cat, dog, horse or cow, must be used in preference to a human generic equivalent to ensure safety and efficacy.
But there is a broader point here. Are annual vet bills increasing? Yes. Is it because vets are making bigger profits from doing the same thing, or charging more to insured clients? Probably not.
Pet insurance has been available since just after the second world war. It's not a new phenomenon, although more people are taking it out. The rising costs of vets' bills are a function of several key factors. Veterinary science, technology and novel medicines are advancing apace and this has extended the range of complex diagnostic techniques and treatments available to animal owners. The "veterinary inflation" quoted by insurers mostly reflects this price rise and not that veterinary surgeons are inexorably increasing fees or, worse still, acting fraudulently. I fully appreciate the role that companion animals play in the lives of their owners and that, with or without insurance, they are prepared to strive to do the very best for their animals. This, of course, comes at a price: there is no NHS for animals.
You say that "unlike human medical records, veterinary records do not follow the animal if the owner moves to a new practice" and that changing this would help reduce fraud. This is not the case. The RCVS Guide to Professional Conduct, which sets out veterinary standards, states: "A veterinary surgeon should not knowingly take over a colleague's case without informing the colleague in question and obtaining a clinical history" unless there is a genuine emergency.
The RCVS has a duty to investigate complaints about veterinary surgeons and registered veterinary nurses (RVNs). We also attend regular meetings with the ABI and work with the police in any complaint involving alleged fraud. If any member of the public has information about individual veterinary surgeons or RVNs being involved in alleged insurance fraud, we would be keen to look into it.

Voices of finance: insurance broker

'I have been in several incidents of physical and verbal harassment. The thing is, you can't go public with it, because people talk'

• This monologue is part of a series in which people across the financial sector speak to Joris Luyendijk about their working lives So blatant sexism is a thing of the past in finance? You might think so from this earlier series of 12 interviews with women in the City. None of them said they had experienced any sexual harassment beyond what they themselves considered innocent office banter. Shortly after the series went up, an email arrived at jlbankingblog@gmail.com, saying:

"My experiences are rather different from those of the women you have interviewed in the banking and fund management sectors."
We meet for lunch in the City. She is English, a woman in her mid-20s, well dressed and with two postgraduate degrees on her CV. For lunch she orders a glass of Peroni beer and crostinis with tuna.
"Maybe the insurance industry is simply more backward, and this is why my experiences in finance are so different. From your interviews the world of banking seemed almost enlightened. Insurance is very much an old boys' network, particularly so on the broking side, and women are not well-treated. I have become quite thick-skinned, but still I find the industry shocking at times. I have been in several incidents of physical and verbal harassment. The thing is, you can't go public with it, because people talk. They'll say, 'she's the girl who sued so-and-so' and it will affect your career. This is a male-dominated industry, and people will be wary of you if you rock the boat. There will be certain things you are no longer asked to do, you get shut out of the circle. So women tend to brush it off, move on. This is what I did. I mean, I don't want you to think that I'm hugely traumatised or anything like that. One incident was with a senior colleague, one with a director and one with a client. The internal ones were sorted out, internally, but that's where it ended. Our business is all about relationships, and these would be destroyed by a lawsuit. As a woman you don't get the same protection as you do in banking, and so there's less fear among men, they think they're untouchable. Now of course not everybody in insurance harasses women. But those who do are tolerated. One of the incidents was with a man who was 60 years old. You know, I am in my mid-20s. What sort of deluded self-perception must he have to think that I would be attracted to him?
"Coping mechanisms for women in insurance? Let me think. One way is to become one of the boys, put away any sensitivity, ignore the appalling language. You gotta ditch your girliness, basically become unshockable. Drink with the guys, even go to strip clubs together. In my first year on the job, I went with the guys a couple of times. I'm not particularly against strip clubs, though I don't necessarily think they're healthy for the women involved. But what happens to men, some men, in those clubs … they become animals. The language they use to these women, they touch them even when that's not allowed. The way they speak about these 'strippers' is so degrading. It's disturbing to sit there and listen to all that.
"It's just hard to draw the line. You must not be seen to be a prude, yet by becoming too involved with the drinking and socialising, the signal you send is that you're available. Which you must take very great care not to be. If one of the lads sleeps with a girl in the market, his reputation actually improves. Hers is destroyed – such a thing will just whizz through the firm. Everybody in the office will laugh about it. It's just like school, really.
"My job. I am an intermediary between clients and insurance underwriters. Perhaps a good example is to think of a real estate agent – we bring buyers and sellers together. There are many categories of business, for example marine and property. So on the one hand there may be a ship owner who wants to insure his ship against a range of risks. On the other there are insurance underwriters, who take on those risks in exchange for a premium. It's the same principle as any day-to-day insurance, except here the contract is not standard; it is negotiated between shipper and insurer to form a bespoke policy, with the broker as intermediary conducting the negotiation. When a deal is done and the client pays the insurance underwriter, via the broker, we take our commission from that, or in some cases a pre-arranged fee, and this pays for our salaries.
"What happens, you inherit clients from your predecessor, and then you try to grow your portfolio. You go out and talk to potential clients. Success comes from knowing the industry and its technicalities and dynamics well, and it's also relationships – people must like you. So you take clients and potential clients out for drinks, and this way you build a book of business for yourself. As for technicalities … as a broker you can simply take the easy route, and pass information back and forth between the insurance buyer and insurance underwriter. But if you know the industry and business well, you can add value by offering advice to specifically tailor the contract to a client's needs. Then you are effectively using legal contract analysis skills, pointing out alternative phrasings or clauses that may solve a particular problem. Finally your business can grow in the reciprocal way. For example, a law firm may appoint you to arrange their insurances, in exchange for which you will instruct them when you're in need of certain legal expertise.
"Typical working days are not long, that's great, as you retain a healthy work/life balance. We start around 9am, and we'll generally be out by 5. There may be client entertainment, but the actual work is over. It's very different from brokerage of stocks, for instance, as stocks are actually traded on a stock market. We don't have to watch trends or constantly follow a market. What I also like about my job; I am not sitting at a desk all day crunching numbers. I get to go out, meet people. And some of the people around are fantastic. It is really inspiring to be around professionals who are so passionate about the industry; I know that sounds weird, passionate about insurance, but they are and it's wonderful to learn from them.
"This job does alter your perception of men. God, that makes me sound horrible. But it's true. So many men who I have to spend time with just have no maturity, no decency. I have to stop myself from tarring all men with that brush. I find myself lowering my expectations of men. Listen to me, ah well. You should see them getting drunk around lunch, not returning to the office afterwards. This is how the worst incident I was in occurred, incidentally. You see, harassment happens when you least expect it. It didn't happen late at night in a bar. It happened during working hours when I was contacted by this person in the afternoon, to ask if I would meet with him and others. Seemed perfectly innocent, and not unusual as we have worked on several cases together. Turns out he had been drinking, and then it happened. It was a complete surprise. It did take me time to recover, and our human recourses department was very good about it. I stayed home for a couple of weeks, in which I took the time out to re-evaluate my career going forward. Since I decided not to go public with what happened, I had to invent reasons for my absence; holidays, that sort of thing.
"City workers are the new footballers. On Thursday nights there are these droves of women who flock to the bars where City workers go, to try to pick one up. It's a bizarre thing to look at. I suppose men will come away with a distorted sense of women too, going to these bars. I don't go to City bars very often, but when I do, I don't adapt my clothes in order to make sure people in the industry understand that I'm not a gold-digger – I have no reason to. You can tell the difference between the 'City girls' and the girls on the hunt for a 'suit'. I do dress in a feminine way, and my daily uniform does include high heels and makeup. Clients respond to a well-groomed or presented professional, so why not cash in on that? Now I can hear people thinking, if you are going to 'dress up', then don't moan when men come on to you. So what do I do? Be anti-feminine, and endure the lesbian jokes? You just can't win, can you?
"This job is not for life, ha-ha, no way. I have been studying so much in university, and then I never use my brain any more. I thought going to work in the City was all glamorous and exciting, and I would be making a fortune. Well, I make well under £40,000, and often I sit back and think: God, this is my job. I just had no idea it was like this, it sure wasn't in the graduate prospectus. I want to stay in the City but move to a different area in finance. The City life and its mystique is great, the iconic buildings and all. The pay is still comparatively good in my sector, and you can meet intelligent and dynamic people. When I get up and go to work there's this buzz, you feel this is where things are happening. I really, really like that."

Flood insurance argument could leave millions high and dry

200,000 homes in England and Wales could be left without cover as agreement between insurers and government ends Up to 200,000 homes in England and Wales have been warned they will struggle to obtain adequate flood insurance after June 2013, when the insurance industry's voluntary flood agreement with the government ends.

In 92 constituencies there are 1,000 or more homes at high flood risk, the Association of British Insurers (ABI) said after analysing the latest Environment Agency flood data.
Boston and Skegness in Lincolnshire is the constituency with the most homes at significant risk of flooding, with 7,550 properties under threat, followed by the Vale of Clwyd (7,339 homes), Folkestone and Hythe (7,196), and Windsor (7,125). A property is defined as being at risk if it has a one in 75 chance of flooding in any given year.
The risk of households being unable to obtain cover is heightened by an ongoing row over who pays for the flood defences needed to maintain protection for the 5m homes at risk across the UK.
Adrian Webb of esure said there had been a "gentlemen's agreement" between insurers and the government since 1961.
"The government of the time said government would be responsible for flood defences, and in turn the insurance industry would include flood cover as standard. At the end of the 1990s it was becoming clear that the government's side of the equation was not being met – and will not be met in future," he said.
The current flood insurance statement of principles agreement with the government, agreed in 2000 as a short-term measure, ends in June 2013. It states that insurers must include flood cover as standard for properties built before 1 January 2009, where the risk of flooding is low; and, crucially, insurers must allow at-risk households who already have flood cover to automatically renew cover with the same insurer, as long as flood defences are planned to be in place within five years.
The ABI's director general, Otto Thoresen, said this "grossly distorts the market" because people in lower risk flood areas pay more to subsidise those at higher risk. "Customers in high risk areas are tied to their existing insurer, and those insurers covered by it have ended up with a disproportionate number of high flood risk properties."
Webb said insurance in general "ensures a flow of money from the fortunate to the unfortunate. But the difficulty comes in areas where flooding isn't accidental or a peril anymore, but a certainty. Then it becomes a redistribution of wealth and not insurance."
The public accounts committee said the government "needs to reach an agreement with the insurance industry urgently and work more closely with it to ensure insurance cover is both available and affordable" – something echoed by Webb. He said the insurance industry needs to have "very strong words with government between now and June 2013."
He added: "The government can't force insurers to compensate consumers for its own failure to invest in flood protection. If an agreement can't be reached one of two things will happen: either cover will become unaffordable in areas where there is a strong likelihood, of flooding or costs will rise for everyone. The areas identified by the ABI would probably be hit first."
In a December 2011 article for the Town and Country Planning Association David Crichton, visiting professor at University College London and at Middlesex University Flood Hazard Research Centre, said an end to the current agreement on insurance would be a good move in the long run, "because flood insurance provides economic penalties to discourage building in flood hazard areas. [But] in the short term, withdrawal of insurance cover is likely to lead to blight and a fall in property values."
Simon Douglas, director of AA Insurance, said some households could soon encounter problems: "Some insurers are telling us that flood-prone homeowners might not be able to renew their cover later this year, because their new policy will extend beyond 1 July 2013: with all the implications for property value and mortgage availability that this implies. That does not augur well for the 5.2 million families estimated to be at risk from flooding."

Constituencies with most homes at significant flood risk

• Boston and Skegness, 7,550 homes
• Vale of Clwyd, 7,339
• Folkestone and Hythe, 7,196
• Windsor, 7,125
• Runnymede and Weybridge, 6,541
• Clwyd West, 6,160
• Aberconwy, 5,500
• Nottingham (south), 5,043
• Great Yarmouth, 4,965
• Sittingbourne and Sheppey, 4,295
• Leeds (central), 4,209
• Canterbury, 4,199
Source: ABI

What Are the Odds?

The whole insurance business is a numbers game, based on the odds of something happening... or not happening. Probabilities. Statistics. Tables. The average life expectancy for U.S. adults is currently 77.2 years. It's 74.4 for males and 79.8 for females. It also varies by race and other factors. In 1900, the average life expectancy was 47.3 years. Imagine having a mid-life crisis at 23.5!
In this article we're going to take a quick look at how well you know your odds, and more importantly, at what you can do right now to improve them.

Knowing Your Odds

Q. Let's start with an easy one, but one most of us would rather not answer: What are the odds that you're going to die?
A. 1 in 1. 100%. You know, that whole death and taxes thing... inevitable.
Q. How does this compare to winning the lottery?
A. Your chances of winning big in the lottery are somewhere between 1 in 7 million and 1 in 80 million, depending on the game and number of players. Translation: you are slightly more likely to win the lottery than you are to live forever. But only slightly.
Q. What are the odds that you'll die by accident or injury?
A. 1 in 23. That means that you're much more likely to die of natural causes. Listed below are the odds of just a few of the many possible ways someone can die:

Cause	Odds
Heart Disease	1 in 2.6
Cancer	1 in 4
Suicide	1 in 121
Homicide	1 in 182
Car Accident	1 in 247
Death by Fire/Smoke	1 in 1,116
Accidental Drowning	1 in 1,126
Motorcycle Accident	1 in 1,204
Airplane Accident	1 in 4,023
Drowning in Bathtub	1 in 11,469
Lightning Strike	1 in 83,930
Bee Sting	1 in 85,882
Bus Accident	1 in 99,809
Train Accident	1 in 142,036
Dog Bite	1 in 147,717
Snake Bite	1 in 527,561
Fireworks Accident	1 in 615,488

Q. Does this mean that motorcycles are safer than cars?
A. Absolutely not! It just means that fewer people ride on motorcycles than in cars. Per mile driven, motorcyclists are 35 times more likely to die in an accident than are people riding in cars.
Q. What are the leading causes of death among all people in the U.S.?
A.

Cause	Odds
Heart Disease	29.0%
Cancer	23.0%
Stroke	7.0%
Respiratory Disease	5.0%
Accident/Injury	4.0%
Diabetes	3.0%
Influenza	3.0%
Alzheimer's	2.0%
Kidney Disease	2.0%
Infection	1.0%
Suicide	1.0%
Liver Disease	1.0%
Homicide	0.8%
Hypertension	0.8%
Pneumonia	0.7%
All Others	17.0%

Q. How about for 15-24 year olds?
A.

Cause	Odds
Accident/Injury	52%
Homicide	21%
Suicide	16%
Cancer	7%
Heart Disease	4%

This final set of numbers is a bit disturbing, but keep in mind that most young people don't die. But those that do, are much more likely to die of non-natural causes.

Improving Your Odds

Enough with the numbers! Here are some of the main things you can do right now to improve your odds of living longer:

• If you smoke, stop smoking. Easier said than done, but consider this: 26% of smokers live to age 80 compared to 57% of non-smokers. Smokers are 50% more likely to die from a smoking-related illness than from an automobile accident. The average smoker lives 22.5 years less than the average non-smoker. You get the picture.
• Don't drink and drive. 50% of all motor vehicle accidents involve alcohol.
• Take simple precautions to prevent injury: seatbelts, helmets, air bags, etc.
• Adopt healthy lifestyle habits: eat right, exercise regularly, brush, floss, wash hands, get enough sleep-all the things your mother (and doctor) tell you.
• Seek professional primary care when needed.

Bottom line, you're going to die at some point, but taking steps like these will improve both the quantity—and quality—of your life. That'll give you a chance to see more sunrises, laugh at more jokes, spend more time with loved ones—and buy more lottery tickets. Gotta love those odds.
References:
Life Expectancy Rates