Cash Value / Loans / Amounts / Payments

Surrender

An act of giving up a life policy, in which the insurer will pay the insured the cash value the policy has built up.

Over Insurance

An excessive amount of insurance that would result in overpayment to the insured in the event of a loss.

Lump Sum

Settlement method that pays the beneficiary the entire proceeds of a life insurance policy in one payment rather than in installments.

Actual Charge

The amount a physician or supplier actually bills for a particular service or supply.

Maturity Date

The date when the face amount of the life insurance becomes payable.

Excess Charge

The difference between the Medicare approved amount for a service or supply and the actual charge.

Principal Amount

The full face value of a policy.

Actual Cash Value (ACV)

The required amount to pay damages or for property loss, which is calculated based on the property's current replacement value minus depreciation.

Out

of-Pocket Costs -Amounts an insured must pay for coinsurance and deductibles before the insurer will pay its portion.

Endow

to reach the maturity date or time at which the face amount equals cash values.

Payment of Claims

A provision that specifies to whom claims payments are to be made.

Reserve

An amount representing actual or potential liabilities kept by an insurer in a separate account to cover debts to policyholders.

Subrogation

The legal process by which an insurance company seeks recovery of the amount paid to the insured from a third party who may have caused the loss.

Limiting Charge

The maximum amount a physician may charge a Medicare beneficiary for a covered service if the physician does not accept assignment of the Medicare approved amount.

Mode of Payment

The method of premium payment, whether annually, semiannually, quarterly, or monthly.

Deductible

The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.

Option

A choice of ways of receiving policy dividends, nonforfeiture values, death benefits, or cash values.

Valued Contract

A contract that pays a stated amount in the event of a loss (disability insurance/life insurance).

Policy Loan

A nonforfeiture value in which an insurer loans a part or all of the cash value of the policy assigned as security for the loan to the policy owner.

Capital Amount

A percentage of the principal amount of a policy paid to the insured if he/she suffered the loss of an appendage.

Exclusions

Causes of loss, exposures, conditions, etc. listed in the policy for which the benefits will not be paid.

Co

pay -An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.

Loan Value

The amount of money an insured can borrow using the cash value of his/her life insurance policy as collateral.

Proceeds

The amount payable by the insurance company, usually in at the insured's death or when the policy matures.

Cash Value

The amount to which a policyowner is entitled if the policy is surrendered before maturity.

Paid

Up Insurance -A policy on which all premiums have been paid but which has not matured due either to death or endowment.