Glossary
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
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” that is specified
in the policy. It pays a benefit to a designated beneficiary
only when the insured dies within that specified period which
can be one, five, 10 or even 20 years. Term life policies are
renewable but premiums increase with age.
TERRITORIAL RATING
A method of classifying risks by geographic location to set
a fair price for coverage. The location of the insured may have
a considerable impact on the cost of losses. The chance of an
accident or theft is much higher in an urban area than in a
rural one, for example.
TERRORISM COVERAGE
Included as a part of the package in standard commercial insurance
policies before September 11, 2001 virtually free of charge.
Since September 11, terrorism coverage prices have increased
substantially to reflect the current risk.
THIRD-PARTY ADMINISTRATOR
Outside group that performs clerical functions for an insurance
company.
THIRD-PARTY COVERAGE
Liability coverage purchased by the policyholder as a protection
against possible lawsuits filed by a third party. The insured
and the insurer are the first and second parties to the insurance
contract. (See First-party coverage)
TIME DEPOSIT
Funds that are held in a savings account for a predetermined
period of time at a set interest rate. Banks can refuse to allow
withdrawals from these accounts until the period has expired
or assess a penalty for early withdrawals.
TITLE INSURANCE
Insurance that indemnifies the owner of real estate in the event
that his or her clear ownership of property is challenged by
the discovery of faults in the title.
TORT
A legal term denoting a wrongful act resulting in injury or
damage on which a civil court action, or legal proceeding, may
be based.
TORT LAW
The body of law governing negligence, intentional interference,
and other wrongful acts for which civil action can be brought,
except for breach of contract, which is covered by contract
law.
TORT REFORM
Refers to legislation designed to reduce liability costs through
limits on various kinds of damages and through modification
of liability rules.
TOTAL LOSS
The condition of an automobile or other property when damage
is so extensive that repair costs would exceed the value of
the vehicle or property.
TRANSPARENCY
A term used to explain the way information on financial matters,
such as financial reports and actions of companies or markets,
are communicated so that they are easily understood and frank.
TRAVEL INSURANCE
Insurance to cover problems associated with traveling, generally
including trip cancellation due to illness, lost luggage and
other incidents.
TREASURY SECURITIES
Interest-bearing obligations of the U.S. government issued by
the Treasury as a means of borrowing money to meet government
expenditures not covered by tax revenues. Marketable Treasury
securities fall into three categories — bills, notes and
bonds. Marketable Treasury obligations are currently issued
in book entry form only; that is, the purchaser receives a statement,
rather than an engraved certificate.
TREATY REINSURANCE
A standing agreement between insurers and reinsurers. Under
a treaty each party automatically accepts specific percentages
of the insurer’s business.
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