WAIVER The surrender of a right or privilege. In life insurance, a provision that sets certain conditions, such as disablement, which allow coverage to remain in force without payment of premiums. WAR RISK Special coverage on cargo in overseas ships…

VALUED POLICY A policy under which the insurer pays a specified amount of money to or on behalf of the insured upon the occurrence of a defined loss. The money amount is not related to the extent of the loss….

UMBRELLA POLICY Coverage for losses above the limit of an underlying policy or policies such as homeowners and auto insurance. While it applies to losses over the dollar amount in the underlying policies, terms of coverage are sometimes broader than…

TERM CERTAIN ANNUITY An form of annuity that pays out over a fixed period rather than when the annuitant dies. TERM INSURANCE A form of life insurance that covers the insured person for a certain period of time, the “term”…

SALVAGE Damaged property an insurer takes over to reduce its loss after paying a claim. Insurers receive salvage rights over property on which they have paid claims, such as badly-damaged cars. Insurers that paid claims on cargoes lost at sea…

RATE The cost of a unit of insurance, usually per $1,000. Rates are based on historical loss experience for similar risks and may be regulated by state insurance offices. RATE REGULATION The process by which states monitor insurance companies’ rate…

QUALIFIED ANNUITY A form of annuity purchased with pretax dollars as part of a retirement plan that benefits from special tax treatment, such as a 401(k) plan.

PACKAGE POLICY A single insurance policy that combines several coverages previously sold separately. Examples include homeowners insurance and commercial multiple peril insurance. PAY-AT-THE-PUMP A system proposed in the 1990s in which auto insurance premiums would be paid to state governments…

OCCUPATIONAL DISEASE Abnormal condition or illness caused by factors associated with the workplace. Like occupational injuries, this is covered by workers compensation policies. OCCURRENCE POLICY Insurance that pays claims arising out of incidents that occur during the policy term, even…

NAMED PERIL Peril specifically mentioned as covered in an insurance policy. NATIONAL FLOOD INSURANCE PROGRAM Federal government-sponsored program under which flood insurance is sold to homeowners and businesses. NO-FAULT Auto insurance coverage that pays for each driver’s own injuries, regardless…