Insurance Glossary: F-H

Question: What is a 401(k) Plan?

Answer: A 401(k) Plan is a retirement plan in which employees and employers can make contributions. The employee’s contributions are done on a pretax basis. Also known as a qualified savings plan.

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Question: What is a 403(b) Plan?

Answer: A 403(b) Plan is a retirement plan designed for public employees of the state, local government, and school system. Employees and employers can make contributions. The employee’s contributions are done on a pretax basis.

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Question: What is Face Amount?

Answer: A face amount is the amount paid upon the maturity date of a life insurance policy, death of the insured, or end of the endowment period.

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Question: What is a Fair Plan?

Answer: A fair plan is a state insurance programs provided to property owners who live in high-risk areas. Policies are contingent upon the homeowner maintaining the property and making any necessary improvements.

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Question: What is Family Income Life Insurance?

Answer: Family income life insurance policies (whole and term) pay a monthly income to the beneficiaries of the deceased insured and then a flat amount after a specified length of time.

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Question: What is a Farm-Ranch Policy?

Answer: A farm-ranch policy combines homeowners insurance and business insurance for the activities conducted on the property.

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Question: What is Farmers Comprehensive Personal Liability Insurance?

Answer: Farmers comprehensive personal liability insurance is a legal liability insurance policy protecting the farmer against bodily injury or property damage claims from others. Provides coverage for such things as employees’ actions, dog bites and wandering livestock.

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Question: What is a Faulty Workmanship Exclusion?

Answer: Faulty workmanship exclusion is a property damage exclusion in a liability policy designed to ensure that the insured is maintaining proper standards of performance.

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Question: What is a Fidelity Bond?

Answer: A fidelity bond is an insurance policy for losses that result from dishonest acts of employees.

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Question: What is a Financial Planner?

Answer: A financial planner is a person or business that offers guidance for investments, retirement savings, and overall finances.

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Question: What is a Financial Responsibility Law?

Answer: Financial responsibility law requires motorists to provide of evidence financial ability (usually in the form of an insurance policy) to pay in instances of negligence.

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Question: What is Fine Arts Insurance?

Answer: Fine arts insurance is separate from homeowners insurance and is specifically designed to protect expensive pieces of art.

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Question: What is a Fire?

Answer: A fire is combustion or burning, in which substances combine chemically with oxygen from the air and typically give out bright light, heat, and smoke. Insurance covers loss only from loss due to “hostile” fire.

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Question: What is a Fire Department Service Clause?

Answer: A fire department service clause extends the fire policy to pay the charges a fire department makes in the event of covered loss.

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Question: What is Fire Insurance?

Answer: A fire insurance policy covers losses caused by fire, lightning and removal of insured property from the premises to avoid further loss.

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Question: What is Fire Protection Class?

Answer: A fire protection class is the ranking of fire protection for towns and cities; a ranking of 1 for the best and 10 for the least.

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Question: What is a First Named Insured?

Answer: A first named insured is the party named first in the insurance policy. Many of the duties and obligations to the contract must be performed by, or are the responsibility of, the first named insured.

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Question: What is a Fixed Annuity?

Answer: In life insurance, a fixed annuity has fixed payments for the length of the contract.

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Question: What is a Fixed Benefit?

Answer: A life insurance fixed benefit is one that is paid on a regular basis. It is not variable.

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Question: What is a Fixed Period Option?

Answer: In a life insurance fixed period option, the beneficiary may choose to receive regular payments for a set period of time instead of a lump sum.

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Question: What is a Flat Benefit?

Answer: A life insurance flat benefit is when the amount does not change over time.

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Question: What is Flat Cancellation?

Answer: The flat cancellation of a policy as of the effective date and time. All premium is refunded.

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Question: What is a Fleet Policy?

Answer: A fleet policy is insurance that provides coverage for a number of vehicles.

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Question: What is a Flexible Benefit Plan?

Answer: A health care flexible benefit plan is offered by employers that provide the employees with a choice of benefits and deductible rates.

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Question: What is Flexible Premium Life Insurance?

Answer: A flexible premium life insurance plan provides the insured with the option of when they’d like to pay their premiums and the amount paid.

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Question: What are Flexible Spending Accounts?

Answer: Optional flexible spending accounts are set up by the employer in which pre-taxed earning are set aside to be spent on health care related costs.

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Question: What is a Floater?

Answer: A floater is a policy that covers property at non-specified locations.

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Question: What is Flood Insurance?

Answer: Flood insurance is coverage against damage done by the rising or overflowing of bodies of water onto normally dry land.

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Question: What is Following Form Excess Liability Insurance?

Answer: Following form excess liability insurance provides additional limits above the primary policy with the same coverage as the primary liability coverage named in its policy provisions.

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Question: What is Forfeiture?

Answer: In a pension plan, forfeiture happens if the employee leaves the company before certain benefits have become vested. The employee must forfeit those benefits.

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Question: What are Fortuitous Events?

Answer: Fortuitous Events – An event that happened by chance, accidental.

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Question: What is a Front-Loaded Policy?

Answer: In a universal or variable universal life insurance front-loaded policy, the insurance company takes charged expenses out of the policy when the initial premiums are paid by the insured. Back-loaded policies make the charges on withdrawals.

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Question: What is Fronting?

Answer: The insurance company practice of using another company to issue the policy without actually transferring any of the risk. Usually done to allow a non-admitted market, or self insurance organization, to assume risk that is normally required to be insured in an admitted carrier. The fronting company is normally paid a fee.

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Question: What is a Fur Floater?

Answer: A fur floater is an inland marine policy that insures furs and other garments against all risks, at unnamed locations.

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Question: What are Furniture and Fixtures?

Answer: Furniture and fixtures are usually the contents of a commercial building, excluding contents held for sale or in the process of being manufactured. It also excludes machinery. Fixtures are attached to the building.

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Question: What is Gambling?

Answer: Gambling is taking a risky action in the hope of a desired result. Insurance is based on the opposite of gambling: gambling creates risk, while insurance shifts risk already in existence from one party to another. Although the distinction is blurred on some indemnification policies such as hole-in-one policies.

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Question: What is Gap Insurance?

Answer: Gap insurance coverage designed to pay for the amount still owed to the loss payee on a vehicle in the event that the vehicle is lost/destroyed.

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Question: What is a Garage Policy?

Answer: A garage policy protects for claims of bodily injury or property damage caused by the operator’s negligence in the sale or use of automobiles.

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Question: What is Gender Rating?

Answer: In life, auto, and health insurance policies, statistics create a gender rating which is used to determine certain insurance rates.

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Question: What is General Aggregate Limit?

Answer: A general aggregate limit is the maximum amount that will be paid in any one policy period, regardless of how many claims, losses, suits, or insureds may be involved. Insured may be able to purchase insurance for an impaired aggregate.

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Question: What is General Liability?

Answer: General liability is a form of business insurance that covers the insured for third party liability claims due to negligence.

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Question: What is a Good Driver Discount?

Answer: A good driver discount is a reduction in automobile insurance premiums for drivers with good driving records.

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Question: What is a Good Student Discount?

Answer: A good student discount is a reduction in automobile insurance premiums for drivers with good grades in school, usually a “B” average or better.

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Question: What is Graded Premium Whole Life Insurance?

Answer: Graded premium whole life insurance plans initially have low premium rates, but then increase to a higher rate after a set period of time.

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Question: What are Graduated Driver Laws?

Answer: Graduated driver laws is a system that allows new drivers to acquire skills needed by restricting their driving to certain hours of the day with few passengers. of the duties and obligations to the contract must be performed by, or are the responsibility of, the first named insured.

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Question: What is Group Accident and Health Insurance?

Answer: Group accident and health insurance policies provided to individuals who a members in a “natural” group like employees of a company. A single contract is written outlining the rates and benefits, but individual certificates are issued.

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Question: What is Group Disability Insurance?

Answer: Group disability insurance policies provided to individuals who are members in a “natural” group like employees of a company. A single contract is written outlining the rates and benefits, but individual certificate are issued. Limitations to benefits and compensation are used to encourage people to return to work.

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Question: What is Group Health Insurance?

Answer: Group health insurance policies provided to individuals who a members in a “natural” group like employees of a company. A single contract is written outlining the rates and benefits, but individual certificate are issued.

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Question: What is Group Insurance?

Answer: Insuring a group of people under one insurance contact. The members of the group have a common sponsor like an employer. In “true” group insurance, requires the employer to insurer all employees, pay a portion of the premium, and provide the employees with coverage options.

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Question: What is Group Life Insurance?

Answer: Group life insurance policies provided to individuals who a members in a “natural” group like employees of a company. A single contract is written outlining the rates and benefits, but individual certificate are issued. Usually there is an option for employees to continue the insurance after they no longer work for the employer.

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Question: What is Group Permanent Life Insurance?

Answer: Group permanent life insurance policies underwritten on a group basis. Often used for pension plans.

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Question: What are Guaranteed Annuity Payments?

Answer: Guaranteed annuity payments continue even if the insured dies. Payments are transferred to a second annuitant or to the estate.

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Question: What is Guaranteed Insurability?

Answer: Guaranteed insurability is a provision in some health and life insurance policies in which the insured can add additional coverage without proving insurability.

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Question: What is Guaranteed Issue?

Answer: Guaranteed issue insurance policies are provided to individuals who a members in a “natural” group like employees of a company. A single contract is written outlining the rates and benefits, but individual certificate are issued. No proof of insurability is required.

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Question: What is Guaranteed Renewable?

Answer: In health and life insurance, the guaranteed renewable means the insurer can renew, with the approval of the insured, the policy each year until the insured reaches a certain age for a set period of time. The benefits, conditions, and terms cannot change, but the rates may.

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Question: What is Guaranty Association?

Answer: Guaranty association are state-mandated funds that insurance companies pay to reimburse policyholders, and claimants in the event of an insolvent insurance company.

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Question: What is Hail Insurance?

Answer: Hail insurance is for hail damage to growing crops, buildings and other property covered by insurance policies.

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Question: What is Hazard?

Answer: A hazard is a condition existing that could lead to a loss such as flammable liquids next to a heat source that combust.

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Question: What is a Health Indemnity Plan?

Answer: A health indemnity plan is a type of health care insurance in which the insured pays up front for health care costs and then is reimbursed for expenses. However, the insured is not reimbursed for deductibles and copayments.

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Question: What is Health Insurance?

Answer: Health insurance is a type of insurance that protects the insured from losses due to an illness or accident. More specific policies are available, like disability and sickness insurance.

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Question: What is a Health Maintenance Organization (HMO)?

Answer: A health maintenance organization is an entity that provides care for health insurance, health benefit plans, individuals, and other organizations. It works with health care providers to create a network of doctors and professionals who will treat the patients according to certain guidelines in exchange for customers.

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Question: What is a Hold Harmless Agreement?

Answer: A hold harmless agreement is when one party contractually agrees to assume the liabilities or damages for another party.

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Question: What is Hole-in-One Insurance?

Answer: Hole-in-one insurance allows a prize to be given for a hole-in-one during a controlled event. Rates are based on factors such as number of golfers, length of hole, and whether the event includes pros.

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Question: What is a Homeowners Policy?

Answer: A homeowners policy is for a dwelling and its contents risks that includes comprehensive personal liability and theft insurance for homeowners and tenants.

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Question: What is a Homogeneous Exposure Unit?

Answer: The backbone of insurance theory, a homogeneous exposure unit is the characteristic within a group under study. By combining enough similar risks, homogeneous exposure units, the predictability of loss becomes so that an insurance company can establish rates that will produce a predetermined loss ratio. For example; providing hail insurance for your own home is risky in that you have no real predictability of loss. If you combine your home with enough other homes and apply normal underwriting techniques such as geographic spread of risk the predictability of loss becomes more scientific using empirical data.

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Question: What is Hospice?

Answer: A program that provides direct care or consultation to a terminally ill patient and their family. The hospice will coordinate with the patient’s doctor in providing care.

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Question: What are Hospital Benefits?

Answer: Hospital benefits are the amount of health or accident insurance coverage provided to the insured for hospital expenses.

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Question: What is Hospital Confinement Insurance?

Answer: Hospital confinement insurance is also called hospital income insurance, it is a benefit in some health insurance policies that provides payment in instances of illness or injury. The benefit is paid regardless of any separate insurance policies held.

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Question: What is Hospital Expense Insurance?

Answer: Hospital expense insurance is also called hospital-surgical expense insurance, it is a benefit in some health insurance policies that provides some limited reimbursement for expenses in instances of illness or injury.

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Question: What is Hospital Income Insurance?

Answer: Hospital income insurance is also called hospital confinement insurance. It is a benefit in some health insurance policies that provides payment in instances of illness or injury. The benefit is paid regardless of any separate insurance policies held.

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Question: What is Host Liquor Liability?

Answer: Host liquor liability is for individuals rather than for liquor licensees.

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Question: What is Host Liquor Liability Insurance?

Answer: Host liquor liability insurance is for individuals rather than liquor licensees.

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Question: What are Household Goods?

Answer: Household goods are the normal contents found in a dwelling.

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Question: What is a Hurricane?

Answer: A hurricane is a storm involving violent, revolving-pattern wind.

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Question: What is Hurricane Insurance?

Answer: Hurricane insurance is property insurance specifically designed to cover property loss resulting from the wind from a hurricane.

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