S – Glossary of Terms


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The recovery made by an insurance company by the sale of property which has been taken over from the insured as a part of loss settlement.

A list of individual items covered by an insurance policy with their descriptions and values.

A procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

A form of risk financing through which a firm assumes all or a part of its own losses.

A policy benefit of claim payment.

Settlement Options:
The several ways, other than immediate payment in cash, which a policyholder or beneficiary may choose to have policy benefits paid out.

Short-Term Disability Income Insurance:
A group or individual policy usually written to cover a short term disability (13-26 weeks).

Sickness Insurance:
A form of health insurance providing benefits for loss resulting from illness or disease.

Special Damages:
Compensation awarded for actual economic losses, such as medical expenses and lost wages. (See general damages)

Special Risk Insurance:
Coverage for risks or hazards of a special or unusual nature.

Split Funding:
The use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to the pension plan are paid to a life insurance company and the remainder of the contributions are invested through a corporate trustee, primarily in equities.

Standard Insurance:
Insurance written on the basis of regular morbidity underwriting assumption used by an insurance company and issued at normal rates. Standard Markets: Insurance companies for which the vast majority of people qualify for insurance.

Standard Provision:
The contract provisions required by state statutes until superseded by the uniform policy provision.

Standard Risk:
An individual who, according to a company’s underwriting standards, is entitled to purchase insurance protection without extra rating or special restrictions.

State Fund:
A fund set up by a state government to provide a specific line or lines of insurance, such as Workers Compensation..

State Insurance Department:
A department of a state government whose duty is to regulate the business of insurance and give the public information on insurance.

Step-Rate Premium:
A rating structure in which the premiums increase periodically at pre-determined times.

A person who owns shares of stock in a corporation.

Stock Insurance Company:
A company in which the legal ownership and control is vested in the stockholders.

Stock Life Insurance Company:
A life insurance company owned by stockholders who elect a board to direct the company’s management.

Stock Redemption Agreement:
A buy-sell agreement within a corporation that involves the corporation buying back shares from a deceased stockholder.

Strict Liability:
Usually dealing with property insurance, the liability that manufacturers and merchandisers may be subject to for defective products sold by them for damages, regardless of fault or negligence.

The process by which an insurance company seeks reimbursement from another company or person for a claim it has already paid.

Substandard Insurance:
Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates.

Substandard Risk:
An individual, who, because of poor health history or physical limitations, does not measure up to the qualification of a standard risk.

Supplementary Contract:
An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

Surety Bond:
A bond guaranteeing that a principal will carry out the obligation for which they are bonded for. Most often this is issued to a contractor.

Surgical Expense Insurance:
Health insurance policies, which provide benefits toward the physician’s or surgeon’s operating fees. Benefits may consist of scheduled amounts for each surgical procedure.

Surgical Schedule:
A list of maximum amounts payable by the policy for various types of surgery, with the amount based on the severity of the operation.

An amount by which the value of an insurer’s assets exceeds their liabilities.

Surplus Lines:
A risk or a part of a risk for which there is no normal insurance market available, insurance written by non-admitted insurance company.

A group of insurers or underwriters who join to insure property that may otherwise be to high of a hazard.

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