Insurance Glossary: S

Question: What are Safety Responsibility Laws?

Answer: Safety responsibility laws require drivers to show proof that they have the ability to pay for negligence in causing losses to others from the operation of a motor vehicle.

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Question: What is a Salary Continuation Plan?

Answer: A salary continuation plan is an employee benefit through a group life or disability insurance program, it provides income for the family, should the employee die or become disabled that is on a par with current salary at time of disability or death.

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Question: What is a Salary Reduction Plan?

Answer: A salary reduction plan has payments for the employee’s benefits that are taken directly out of their paycheck.

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Question: What are Sanborn Maps?

Answer: Sanborn maps of cities and towns are used to determine total fire liability an insurance company might have.

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Question: What is a Seasonal Risk?

Answer: A seasonal risk means that a building or dwelling is occupied for only part of the year.

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Question: What is Second to Die Life Insurance?

Answer: A second to die life insurance policy is for a married couple that only provides benefits to the heirs after the second spouse dies. The benefits are usually used for estate planning.

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Question: What is a Second Injury Fund?

Answer: A second injury fund is set up by the states to pay for increased compensation needed when employees suffer a work injury that complicates a previous injury.

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Question: What is Secondary Health Coverage?

Answer: For individuals that have more than one health insurance plan, secondary health coverage will pay benefits on a medical claim only after the primary insurance has paid its full benefits. The purpose of having a secondary plan is to help cover any remaining costs left over by the primary plan.

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Question: What is a Self-Administered Plan?

Answer: A self-administered plan is an employee benefit plan in which the employer funds and administers it instead of using outside sources. Regulated through the Employees’ Retirement Income Security Act (ERISA) of 1974.

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Question: What is Self-Insured Retention?

Answer: Self-insured retention is the amount specified in an insurance policy that the insured must pay before the insurance company pays a loss.

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Question: What is Separate Account?

Answer: A separate account is the portion of the variable annuity, variable life, and variable universal life insurance policy that is invested in equities and other nonguaranteed investment products.

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Question: What is Settlement Option?

Answer: A settlement option is a type of payment plan available to a beneficiary of a matured life insurance policy.

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Question: What is a Settlement or Settlement Offer?

Answer: A settlement or settlement offer is the written specified sum meant to resolve a claim or legal action.

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Question: What is a Shock Loss?

Answer: Shock loss is a much larger loss than the probable maximum loss that has been set.

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Question: What is a Short Rate Cancellation?

Answer: A short rate cancellation is the termination of a policy by the policyholder before its normal expiration, resulting in a penalty premium being paid.

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Question: What is Short-Term Disability Income Insurance?

Answer: Short-term disability income insurance is usually a 13-, 26-, or 52- week disability plan that provides benefits in the event of an illness or accident.

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Question: What is Sickness Insurance?

Answer: Sickness insurance is a health insurance plan that provides against losses due to illness or disease.

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Question: What is a Silverware Floater?

Answer: A silverware floater is an inland marine policy designed to insure silverware.

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Question: What is a Simplified Employee Pension (SEP)?

Answer: A retirement plan option for small businesses because it is more manageable to operate. The employer makes contributions to the employee’s IRA account. In the Simplified Employee Pension-IRA option, the employee’s contributions are limited to 15% of their salary.

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Question: What is a Single Premium Deferred Annuity (SPDA)?

Answer: In a single premium deferred annuity, the premium is paid in single, lump sum. The annuity then grows on a tax-deferred basis until the benefits are paid on a future date.

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Question: What is Single Premium Life Insurance?

Answer: For a single premium life insurance policy, the entire premium is paid at the beginning of the policy.

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Question: What is Slander?

Answer: Slander is an utterance of false information that harms another party.

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Question: What is a Slip?

Answer: A slip is a contract format used by Lloyd’s of London brokers to record participation in a risk. By writing their name or the name of their syndicate under a description of the risk they agree to take a percentage of the loss – thus the term “underwriting'”.

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Question: What is Snowmobile Insurance?

Answer: Snowmobile insurance covers snowmobiles against physical damage to the equipment and legal liability.

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Question: What is Social Security?

Answer: Social security is a federal government program which began in 1935. It provides economic security for people over the age of 65, the disabled, and qualified low-income persons.

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Question: What is a Special Enrollment Period?

Answer: Special Enrollment Period is a period of time outside the normal enrollment period, when you can sign-up for health coverage. It usually involves a job change, marriage, or birth.

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Question: What are Special Needs Plans?

Answer: Special Needs Plans or SNP are a specific kind of Medicare Advantage plan that enrolls those with special needs.

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Question: What are Specified Perils?

Answer: Insurance policies that pay only for loss caused by a peril “specifically” named in the policy are “specified perils” policies.

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Question: What is Spread of Risk?

Answer: The spread of risk is the effort by insurance companies to have a broad geographic spread between the risks accepted by insurance companies to reduce the probability of catastrophic loss.

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Question: What is Sprinkler Leakage Insurance?

Answer: Sprinkler leakage insurance is a contract to cover the damage done by the accidental discharge of water from automatic sprinklers.

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Question: What is Stacking?

Answer: Stacking is applying more than one set of policy limits to any one claim.

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Question: What is Standard Risk?

Answer: A standard risk is what an insurance company has determined it would like to accept for class.

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Question: What are State Responsibility Filings?

Answer: State responsibility filings are the documents that need to be filed by an individual to prove their ability to pay a loss caused by an automobile they’re operating.

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Question: What is Stated Amount?

Answer: A stated amount is the value agreed to by the insured and the insurance company that will be used as the total loss should a covered loss occur.

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Question: What is a Statute?

Answer: A statute is a written law passed by a legislative body.

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Question: What is Statute of Limitations?

Answer: Statute of limitations is the time limit within which a legal action may be brought.

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Question: What is Statutory Disability Benefits Insurance?

Answer: Statutory disability benefits insurance is a limited form of state-mandated disability insurance provided for employees. It covers losses due to nonwork-related injuries and illnesses.

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Question: What is a Stock Insurance Company?

Answer: A stock insurance company is owned by its shareholders.

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Question: What is a Straight Life Annuity?

Answer: A straight life annuity is an insurance policy that pays periodic benefits during the life of the annuitant. The policy holder cannot designate a beneficiary.

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Question: What is Straight Life Income Option?

Answer: With a straight life income option, the beneficiary receives periodic payments until their death.

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Question: What is Straight Life Insurance?

Answer: A straight life insurance policy is for a fixed amount that requires premium payments for the life of the insured.

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Question: What is Stranger Originated Life Insurance?

Answer: Stranger originated life insurance is a policy in which the beneficiary does not need to have an insurable interest in the insured.

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Question: What is Strict Liability?

Answer: Strict liability is legal responsibility imposed without the injured party being required to prove negligence.

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Question: What are Structured Claim Settlements?

Answer: A structured claim settlements cover losses with periodic payments over time.

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Question: What are Subagents?

Answer: Subagents sell insurance through other agents, and aren’t necessarily licensed with the insurance company.

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Question: What is Subrogation?

Answer: In insurance, subrogation is the substitution of the insurer for the insured to pursue any rights the insured may have against a third party.

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Question: What are Substandard Risks?

Answer: Substandard risks are persons or entities which do not meet minimum normal underwriting standards.

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Question: What is Supplemental Health Insurance?

Answer: Supplemental health insurance is additional or extra insurance purchased by an individual who already has an existing healthcare plan. Supplemental policies help to offset medical costs that are not covered under the primary plan.

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Question: What is Surface Water?

Answer: Surface water accumulates on the surface of ground.

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Question: What is Surplus?

Answer: Surplus is an insurance company’s assets after liabilities are deducted.

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Question: What is Surplus Lines Insurance?

Answer: Surplus lines insurance is for those exposures not written in standard insurance companies.

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Question: What is Surplus Lines Tax?

Answer: Surplus lines tax is levied on a surplus lines placement.

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Q: What are Survivorship Benefits?

Answer: In life insurance, survivorship benefits are paid to designated survivors or beneficiaries.

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Question: What is Survivorship Clause?

Answer: A survivorship clause is in some life insurance contracts that stipulates that the beneficiary must survive a certain number of days beyond the death of the insured in order to receive payments.

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