E - F

E

Earned Income. The money individuals earn as a result of working at some job or occupation for which they are paid a salary. Insurance companies base this number on an insured’s salary and other earned income. An insurer typically asks for some kind of proof of income—like an IRS W-2 form or other tax document.

Earned Premium. The amount of the premium that has been “used up” during the term of a policy (i.e., if a one-year policy has been in effect six months, half of the total premium has been earned.)

Earnings Figure. An indexed or adjusted figure, that changes annually due to increases in wages. Thus, in most years, the earnings figure will be higher than the year before—and, consequently, the requirements for a quarter of coverage are higher.

Earnings Insurance. A form of gross earnings business interruption insurance that lacks a coinsurance clause. Designed for small risks, the maximum amount of loss an insured can collect in any 30-day period is established when the policy is written.

Earth Movement. A peril including landslide, mudflow, earth sinking, rising or shifting and earthquake. Usually excluded on homeowners’ and commercial property policies. If direct loss by fire, explosion or breakage of glass, storm door or storm window follow earth movement, the policies cover the additional loss, and that loss only.

Earthquake Insurance. Insurance covering damage caused by an earthquake. Homeowners insurance does not automatically cover losses caused by an earthquake—but earthquake coverage for the residence, other structures and personal property may be attached by endorsement. Several earthquake-prone states—most notably California—require insurance companies that write homeowners coverage to also write earthquake coverage.

Easement. An interest in land owned by another that entitles its easement holder to specific uses.

EC. See Extended Coverage.

Economic Risk. A risk experienced by those who invest in securities identified as the uncertainty of the economy.

Educational Assistance Plan. An employee benefit whereby certain educational expenses incurred by the employee are reimbursed on a tax-favorable basis by the employer.

Educational Fund. A fund that provides money for a child’s education should the breadwinner of the family die.

Effective Date. The start date of an insurance policy, or the date on which the protection of an insurance policy or bond goes into effect.

Elective Benefits. Lump sum payments that the insured may choose in lieu of periodic payments for certain injuries, such as fractures and dislocations.

Elective Deferral Plan. A qualified plan (401(k) or tax sheltered annuity) whereby participants voluntarily elect to defer amounts of compensation for placement in a retirement plan on a tax favorable basis.

Elective Indemnities. See Elective Benefits.

Electrical (or Electrical Apparatus) Exemption Clause. A clause providing that damage to electrical appliances caused by artificially generated electrical currents is recoverable only if fire ensues and then only for the damage caused by the fire.

Electronic Data Processing (EDP) Coverage. Insurance that covers computer equipment, data systems, information storage media and expenses or income loss related to EDP losses.

Elevator Collision Coverage. Coverage for damage caused by collision of an elevator without regard to fault. Includes damage to personal property, the building and the elevator itself. Liability coverage is usually provided automatically by business liability policies.

Eligibility. Particular people, vehicles and situations are eligible for coverage under a policy for a number of different reasons. The conditions of eligibility are sprinkled throughout the policy and the manual rules that govern how and when a policy may be written.

Eligibility Date. The date that a person is eligible for benefits.

Eligibility Period. (1) The period of time during which potential members of a group life or health program may enroll without providing evidence of insurability. (2) The period of time under a Major Medical policy during which reimbursable expenses may be accrued.

Eligibility Requirements. Requirements imposed for eligibility for coverage, usually in a group insurance or pension plan.

Eligible Dependent. A dependent of an insured person who is eligible for coverage according to the requirements set forth in the contract.

Eligible Employee. An employee who is eligible based on the requirements as indicated in the group contract.

Eligible Expenses. Expenses as defined in the health plan as being eligible for coverage, including specified health services fees or “customary and reasonable charges.”

Eligible Person. Similar to eligible employee except it could cover people who are not employees of a specified employer ( e.g., members of an association, union, etc.)

Elimination Period. A loosely used term, sometimes designating the probationary period, but most often designating the waiting period in a health insurance policy. See also Probationary Period and Waiting Period.

Embezzlement. Fraudulent use of money or property that has been entrusted to one’s care.

Emergency Accident Benefit. A group medical benefit that reimburses the insured for expenses incurred for emergency treatment of accidents.

Emergency. An injury or disease that occurs suddenly and requires treatment within 24 hours.

Emergency Fund. A fund that provides money for the emergency expenses of a deceased’s family prior to the final settlement of the estate.

Emergi-Center. See Freestanding Emergency Medical Services Center.

Emotional Distress. See Mental Distress.

Employee Benefit Program. Benefits offered to employees, covering such contingencies as medical expenses, disability, retirement and death, usually paid for wholly or in part by the employer. These benefits are usually insured.

Employee Certificate of Insurance. Evidence of participation in a group insurance plan, consisting of a brief summary of plan benefits. The employee receives this certificate rather than the actual insurance policy.

Employee Contribution. (1) The employee’s share of the premium costs. (2) Deduction from employee’s pay to apply toward the cost of a retirement plan.

Employee Dishonesty. Any dishonest act by an employee that contributes to a loss for the employer. Fidelity bonds usually protect against such losses.

Employee Dishonesty Coverage Form. A commercial crime coverage form, which is actually a fidelity bond, providing coverage for losses resulting from employee dishonesty. It covers losses of money, securities and property other than money and securities.

Employee Pension Benefit Plan or Pension Plan. Any program established and maintained by an employer or an employee organization that provides retirement benefits to employees or deferred income until employment is terminated.

Employee Retirement Income Security Act of 1974 (ERISA). An act that prescribes federal standards for funding, participation, vesting, termination, disclosure, fiduciary responsibility and tax treatment of private pension plans. ERISA also applies to retirement plans and to “employee welfare benefit plans” (any plan of group medical, surgical, hospital or other health care benefits and group accident, sickness and disability benefit plans).

Employee Stock Ownership Plan (ESOP). A qualified employee plan that provides eligible employees with part ownership in the corporation for which they work. Stock is issued and held in trust for the benefit of the employees.

Employee Welfare Benefit Plan. Any program established or maintained by an employer or an employee organization to provide medical, surgical, or hospital care or benefits in the event of sickness, accident, disability, death or unemployment.

Employees’ Trust. One way for a pension or profit-sharing plan to be financed and given effect.

Employer Contribution. The portion of the cost of a health insurance plan borne by the employer.

Employers Liability Coverage. Provides coverage against the common law liability of an employer for injuries to employees as distinguished from the liability imposed by a workers’ compensation law. Employers liability applies in situations where a worker does not come under these laws.

Employers Nonownership Liability Insurance. Protects the employer for liability arising from the use by employees of their own cars on company business.

Employment Benefit Plan. Any plan that is both an employee welfare plan and an employee pension plan.

Encounter. Each time a person meets with a health care provider to receive services.

Encumbrance. A claim on property, such as a mortgage, a lien for work and materials or a right of dower. The interest of the property owner is reduced by the amount of the encumbrance.

Endorsement. A written or printed form attached to the policy that alters provisions of the contract. Endorsements and riders serve as addenda—adding coverage or conditions to standard insurance contracts.

Endorsement Extending Period of Indemnity. An endorsement attached to business interruption policies that extends coverage to the period during which a business has reopened for business but has not reached the level of business activity that existed prior to the business interruption loss.

Endorsement Split Dollar. A split dollar plan in which the employer owns and controls a life policy on the life of an employee. The employee’s rights to certain policy benefits are protected by an employer endorsement.

Endowment Insurance. Life insurance where the face amount is payable to the insured at the end of the contract period or to a beneficiary if the insured dies before that (e.g., an insured purchasing an endowment payable at age 65. Upon reaching that age, the proceeds would be payable to the insured. If the insured dies prior to that age, the proceeds would be payable to the designated beneficiary as a life insurance benefit).

Engineer (Loss Prevention Engineer or Safety Consultant). The employee of an insurance company who has the responsibility of loss prevention and who assists in the securing of underwriting and rating information.

Enrollee. An eligible individual enrolled in a health plan—does not include an eligible dependent.

Enrolling Unit. An organization (such as an employer) that contracts for participation in a health insurance plan.

Enrollment. The total number of enrollees in a health plan. Also refers to the process of enrolling people in a health plan.

Enrollment Period. The amount of time an employee has to sign up for a contributory health plan.

Entire Contract Clause. A provision in an insurance contract stating that the entire agreement between the insured and the insurer is contained in the contract, including the application if it is attached, declarations, insuring agreements, exclusions, conditions and endorsements.

Entity Agreement. A buy-sell agreement usually used with a partnership in which the partnership agrees to purchase the interest of a deceased or disabled partner.

Entrustment. When an insured person rents or lends property to a non-insured person.

Entry Age. The age when an employee satisfies all the age, service and other eligibility requirements for participation in a pension plan.

Entry Date into Claims-Made. Initial effective date of a “claims-made” liability policy. It determines the extent of maturity for rating purposes. If claims-made coverage is interrupted and reestablished, or if a retroactive date is changed on renewal, the entry date will change.

Environmental Restoration. Restitution for the loss, damage or destruction of natural resources arising out of the accidental discharge or escape of any commodity transported by a motor carrier, including the cost of removal and measures to minimize damage to human health, the natural environment, fish, shellfish and wildlife. Federal regulations require common carriers of hazardous materials to maintain minimum liability coverages for BI, PD and environmental restoration.

Equifax. One of three major credit reporting companies.

Equipment Floater. A form covering various types of equipment (e.g., construction equipment, against specified perils or occasionally on an all-risk basis subject to exclusions).

Equity. The money value of an insurance company that is over and above its liabilities. Liabilities include almost all of its reserves.

ERISA. See Employee Retirement Income Security Act.

ERISA Liability. Liability imposed by law upon officers or other employees operating in a fiduciary capacity for the proper handling of pension funds and other employee benefits. It is excluded from most general liability policies. See Employee Retirement Income Security Act (ERISA).

Errors and Omissions Clause. A clause usually found in an obligatory reinsurance treaty that provides that if an error or an omission takes place in describing a risk that falls within the automatic reinsurance coverage of the treaty, it shall not invalidate the liability of the reinsurer for the risk.

Errors and Omissions Insurance. (1) Insurance that indemnifies an insured for a loss sustained because of an error/oversight on his or her part (e.g., an insurer purchases this coverage to protect itself against losses from such things as failing to issue a policy). (2) Coverage for losses resulting from financial institutions failing to effect coverage.

Estate Plan. A plan for the disposition of one’s property at death, including the handling of property in the event of the incompetency or total disability of the estate owner. A will is part of an estate plan.

Estate Planning. The process of accumulation, conservation, distribution and administration of an estate in order to minimize the impact of taxation and estate shrinkage.

Estate Tax. A tax payable to the federal government. The amount is based on the value of the estate of the decedent.

Estimated Premium. A provisional premium that is adjusted at the end of the year (e.g., in workers’ comp insurance an estimated premium is based on estimated payrolls for the coming year. At the end of the year, final payrolls are determined and the final premium is computed).

Estoppel. The legal principle whereby a person loses the right to deny that a certain condition exists by virtue of having acted in such a way as to persuade others that the condition does exist (e.g., if an insurer allows an insured to violate a condition of the policy, the insurer cannot at a later date void the policy because the condition was violated. The insurer has acted in such a way as to lead the insured to believe that the violation did not void the coverage).

Evidence Clause. A clause that requires the insured to cooperate in the investigation of a claim by producing records and submitting to examinations. This helps the adjuster establish the validity of a claim. In a health policy, this clause requires the insured to submit to physical examinations.

Evidence of Coverage. See Certificate of Insurance.

Evidence of Insurability. Any information concerning health status required to satisfy underwriting standards, such as a medical examination or physician’s statement.

Ex Gratia Payment. Latin for “from favor.” A payment by an insurer to an insured for which there is no liability under the contract. In some cases, an insurer may feel there has been a mistake or a misunderstanding, and may pay a claim even though it does not appear to be liable.

Examination. An examination of an insurance company by the state insurance department.

Examiner. (1) An employee assigned by the state insurance department to audit insurers’ records. (2) A physician appointed by the medical director of a life or health insurer to examine applicants.

Excepted Period. See Probationary Period.

Exception. A provision in an insurance policy that eliminates coverage. See also Exclusion.

Excess Coverage/Insurance. Coverage in excess of one or more primary coverages that does not pay a loss until the loss amount exceeds a certain sum. If an accident is covered by more than one policy, the second policy is said to be excess.

Excess Interest. Interest credited to an insured’s contract in excess of the amount guaranteed by the terms of the contract.

Excess Limit. (1) That limit provided in a policy that is in excess of the basic limit. See Basic Limit. (2) A limit provided in a separate policy with another insurer that is in excess of the limit provided in the basic policy.

Excess Line Broker. A person licensed to place insurance not available in his or her state through insurers not licensed to do business in the state. A person licensed to deal with non-admitted insurers.

Excess Loss Premium Factor. Used in connection with retrospective rating plans, this factor compensates the insurer for the fact that the insured has elected to limit the effects of any one large loss under the retrospective rating formula (e.g., the insured elects a loss limitation of $50,000, which mean that would be the maximum amount of any one loss that would go into the retrospective calculation).

Excess of Loss Ratio Reinsurance. See Aggregate Excess of Loss Reinsurance.

Excess of Loss Reinsurance. (1) Reinsurance which, subject to a specified limit, indemnifies the ceding company against the amount of loss in excess of the specified retention. It includes various types of reinsurance, such as catastrophe, per risk, per account and aggregate excess of loss. Contrast with Pro Rata Reinsurance. (2) Reinsurance which indemnifies the ceding company for that portion of the loss resulting from a single occurrence, however defined, that exceeds a predetermined amount, which is referred to as a first loss retention or deductible.

Excess Per Risk Reinsurance. A form of excess of loss reinsurance which, subject to a specified limit, indemnifies the ceding company against the amount of loss in excess of a specified retention with respect to each risk involved in each occurrence.

Excess Plan. A retirement plan designed around the benefits of Social Security.

Excluded Period. See Probationary Period.

Exclusion. A contractual provision in an insurance policy that denies coverage for certain perils, persons, property or locations. Most exclusions exist simply to remove coverage for above-average risks which are not anticipated in average rates and premiums. In some cases, the coverage is available for an additional charge. Common policy exclusions include: war and acts of war, self-inflicted injury and aviation. Other exclusions limit the insurer’s exposure to events that may have been caused intentionally or events that dramatically increase the chance of loss. See also Exception.

Exclusion Ratio. The relationship or ratio of the total investment in the contract (cost basis) to the total expected return from an annuity (calculated based on average life expectancy tables); used to calculate the percentage of each annuity payment which is considered to be a return of cost basis.

Exclusive Agency System. An insurance distribution system that allows agents to sell and service insurance contracts that limit representation to one insurer and reserve to the insurer the ownership, use and control of policy records and expiration date. See also Captive Agent and Direct Writer, and contrast with Independent Agency System.

Exclusive Provider Organization (EPO). A preferred provider organization where individual members use particular preferred providers rather than choosing from a variety of preferred providers. In an EPO, a primary physician monitors care and makes referrals to a network of providers.

Exculpatory. The portion of a contract or agreement that relieves one party to the agreement of the consequences of his or her own acts.

Executor. The person or entity specified by will who is responsible for the probating of an individual’s will and the settlement of an estate.

Exemplary Damages. See Punitive Damages.

Exhibitions Insurance. A policy for people who display their products through public exhibitions. Usually written on an all-risk basis with certain specified exclusions.

Expectation of Life. The average number of years of life remaining for persons of a given age according to a particular mortality table. Also called life expectancy.

Expected Claims. Estimated claims for a person/group for a contract year based on actuarial data.

Expected Morbidity. The expected incidence of sickness or injury within a given group during a given period of time as shown on a morbidity table.

Expected Mortality. The expected incidence of death within a given group during a given period of time as shown on a mortality table.

Expediting Expenses. Expenses incurred in order to speed up repair or replacement to reduce the amount of loss by a peril covered in a policy. Most commonly used in connection with business interruption and boiler and machinery insurance. Expediting expenses are generally covered if they reduce the amount of the loss that the insurer would otherwise have to pay.

Expense. (1) The cost of conducting an insurance operation aside from the amount paid for losses. (2) A policy’s share of the company’s operating costs, fees for medical examinations and inspection reports, underwriting, printing costs, commissions, advertising, agency expenses, premium taxes, salaries, rent, etc. Such costs are important in determining dividends and premium rates.

Expense Allowance. A compensation paid to an insurance agent in excess of prescribed commissions.

Expense Constant. A flat charge added to the premium of small accounts where the premium is so low that the cost of issuing and servicing the policy cannot be recovered. Most often used with workers’ compensation policies.

Expense Guarantee. One of the guarantees of all annuities; that is, the guarantee that expenses, the cost of doing business, will not increase or exceed a certain percentage of the annuity contributions.

Expense Incurred Basis. Some long-term care policies are issued on an expense incurred basis, which means the contracts reimburse a proportion of the actual expenses incurred. These benefits function much like some forms of hospital and medical insurance because the insurance pays only a percentage of the costs (usually 50 to 80 percent), and the insured is responsible for the remainder—a requirement known as coinsurance.

Expense Incurred. See Incurred Expense.

Expense Loading. The amount added to the rate during the ratemaking process to cover expenses.

Expense Ratio. The percentage of the premium dollar devoted to paying the expenses of an insurer, other than losses.

Expense Reimbursement Allowance. See Expense Allowance.

Expense Reserve. A liability for incurred but unpaid expenses.

Experian. One of three major credit reporting companies.

Experience. (1) The loss record of an insured, an agent, a territory, a type of insurance written, etc. (2) A statistical compilation relating losses to premiums.

Experience Modification. The increase or decrease in premiums resulting from the application of an experience rating plan, usually expressed as a percentage. See Experience Rating.

Experience, Policy Year. See Policy Year Experience.

Experience Rating. A method of adjusting the premium for a risk based on past loss experience for that risk compared to loss experience for an average risk. See also Prospective Rating and Retrospective Rating.

Experience Refund. In life reinsurance, a predetermined percentage of the net reinsurance profit that the reinsurer returns to the ceding company as a form of profit sharing at year’s end.

Experienced Mortality or Morbidity. The actual mortality or morbidity experienced in a group of insureds as compared to the expected mortality or morbidity.

Experimental or Unproven Procedures. Any health care services, supplies, procedures, therapies or devices that the health plan determines regarding coverage for a particular case to be either (1) not proven by scientific evidence to be effective, or (2) not accepted by health care professionals as being effective.

Expiration Card. A way of recording the date that a policy terminates. It reminds the agent or sales representative of a policy coming up for renewal.

Expiration Date. The date indicated as the end of the coverage period. If a policy is not renewed by this date, premiums and coverage are terminated. However, expiration is not absolute—it does not affect payments for loss of use. If a loss occurs just before the expiration date and continues for two months after this date, the loss is fully covered.

Expiration File. A record kept by agents or insurers of the dates that policies they have written or are servicing expire.

Expiration Notice. Notification to the insured of the impending termination of the insurance contract.

Expiry. The termination of a term life insurance policy at the end of its period of coverage.

Explanation of Benefits (EOB). The statement sent to a participant in a health plan listing services, amounts paid by the plan and total amount billed to the patient.

Explanation of Medicare Benefits. A notice which is sent to the Medicare patient providing information about how the claim is to be paid.

Explosion, Collapse and Underground Damage (XCU). See XCU.

Explosion Insurance. Insurance against loss of property due to explosion but not including explosion of steam boilers, pipes and certain pressure instruments. Most commonly written as part of the extended coverage endorsement.

Exports. Materials and goods shipped to other countries.

Exposure. (1) The state of being subject to the possibility of loss. (2) The extent of risk as measured by payroll, gate receipts, area or other standards. (3) The possibility of loss to a risk being caused by its surroundings. This is used in property insurance rating. (4) Surroundings producing a loss to the insured property. (An example of definitions (3) and (4): an insured building suffering loss because a dynamite factory next to it exploded.)

Exposure Units. (1) Individuals or property which may be subject to loss or damage on which a monetary value may be placed. When these exposure units have similar characteristics they meet the requirement of insurability as homogeneous exposure units. (2) Also refers to the premium base, in the sense that the exposure units times the rate equals the premium (e.g., in workers’ compensation, each $100 of payroll is an exposure unit.)

Express Authority. Authority of an agent that is specifically granted by the insurer in the agency contract or agreement.

Extended Care Facility. A facility such as a nursing home that is licensed to provide 24-hour nursing care in accordance with state and local laws. Three levels of care may be provided—skilled, intermediate, custodial or any combination.

Extended Coverage (EC). A common extension of property insurance beyond coverage for fire and lightning that includes coverage for loss by the perils of windstorm, hail, explosion, riot and riot attending a strike, aircraft damage, vehicle damage and smoke damage. At one time EC was added by endorsement. In recent years it has been included on many forms as either an optional coverage or as part of the minimum coverages provided.

Extended Death Benefit. A group policy provision that pays the life benefit when: 1) the insured is totally and continuously disabled at the time the policyholder stops paying premium until the insured’s death; and 2) the insured dies within one year of the date the premium payments stopped, or prior to age 65.

Extended Non-Owner Liability. An endorsement attached to a personal auto policy to provide broader liability coverage only for specifically named individuals. When attached, it covers non-owned autos furnished for the regular use of an insured, use of vehicles to carry persons or property for a fee and broader coverage for business use of vehicles.

Extended Period of Indemnity. A business income coverage that continues coverage for income losses for a period of time after operations have resumed.

Extended Reporting Period (ERP). A period allowing claims after expiration of a “claims-made” liability policy. Also known as a “tail.” See also Basic ERP, Supplemental ERP, Mini Tail, Midi Tail, Maxi Tail.

Extended Term Insurance. A provision in most policies that provides the option of continuing the existing amount of insurance as term insurance for as long a period of time as the contract’s cash value will purchase. This is one of the nonforfeiture options available to the insured in case a premium is not paid within the grace period. See also Nonforfeiture Values.

Extended Wait. A form of reinsurance whereby after the ceding insurer has paid monthly benefits to the claimant for a given number of months under a disability insurance contract, further benefits are paid by the reinsurer.

Extension of Benefits. A condition that allows coverage to continue beyond the expiration date of the policy in the case of employees who are not actively at work or dependents who are hospitalized on that date. The extension applies only if the employee or dependent is disabled as of that date and continues only until the employee returns to work or the dependent leaves the hospital.

Extortion. The surrender of property away from an insured’s premises as a result of a threat to do bodily harm to an insured, employee or to a relative or invitee of either, who is or allegedly is being held captive.

Extortion Coverage Form. A commercial crime coverage form that protects against loss of money, securities and property other than money and securities, resulting from extortion.

Extra Expense Coverage Form. A commercial property form designed to cover extra expenses incurred by a business so it can remain in operation following a property loss. See Extra Expense Insurance.

Extra Expense Insurance. A form that provides reimbursement for the extra expenses reasonably incurred to continue the operation of a business when the described property has been damaged by a peril covered by the contract. It is normally used by businesses where continuity of operation, regardless of cost, is a necessity as, for example, any business that would permanently lose customers if there were any suspension of operations.

Extra Percentage Tables. Mortality or morbidity tables showing the extra premium for certain impaired health conditions. Usually this premium is shown as a percentage of the standard premium. A form of substandard rating.

Extra Premium. An added premium charge for extra hazardous exposures that is levied because the normal rate does not take these into account.

Extra Premium Removal. Removal of an extra premium when the cause for it ceases to exist.

Extraordinary Medical Benefits. This coverage pays when an insured’s medical and rehabilitation expenses exceed the limits in his or her policy. It provides $1 million of coverage.

F

Face. The first page of a life insurance policy.

Face Amount. The amount of insurance provided by the terms of an insurance contract, usually found on the face of the policy. In a life insurance policy, the death benefit.

Facility-of-Payment Clause. A contract provision found in industrial life policies that permits the insurer to pay a portion of the proceeds of the policy to any relative or person who has possession of the policy and who appears equitably entitled to such payment. This provision facilitates payment when doubt exists as to who the beneficiary is and to save legal expenses in the settling of an estate.

Factored Rating. See Adjusted Community Rating.

Factory Mutuals. Member insurers of the Factory Mutual System, a group of mutual coinsurers formed to provide member insurers with insurance and engineering services.

Facultative Certificate of Reinsurance. A document formalizing a facultative reinsurance policy.

Facultative (or Specific) Reinsurance. Reinsurance by offer and acceptance of individual risks, wherein the reinsurer retains the “faculty” to accept or reject each risk offered by the ceding company. Contrast with Treaty Reinsurance.

Fair Access to Insurance Requirements (FAIR Plans). State run pools that offer insurance to those in high-risk areas who cannot obtain insurance through normal channels. Includes coverages for fire and allied perils, with considerably high limits, after inspection of the premises. By law, any insurer that buys riot reinsurance must participate in a HUD-approved FAIR plan. See also Assigned-Risk.

Fair Credit Reporting Act. Public Law 91-508 requires that an applicant be advised if a consumer report is requested and told the scope of the possible investigation. Should the request for insurance be declined because of information in the report, the applicant must be given the name and address of the reporting agency.

FAIR Plan. See Fair Access to Insurance Requirements.

Fair Rental Value Coverage. Insurance that pays the loss of rental value, minus expenses which do not continue, when property rented to others or held for rental is damaged by a covered peril. Fair rental value coverage applies only when the residence insured is the principal residence.

Fallen Building Clause. A provision in property policies specifying that if a material part of an insured building collapses from causes other than fire or explosion, the fire coverage becomes void.

False Arrest Claims. Damage to a person’s reputation when a suspected wrongdoer has been arrested without proper cause. False detention or imprisonment restrict a person’s freedom of movement, and can also lead to a claim for damages.

Family Automobile Policy. A package policy that provides protection against legal liability for bodily injury and property damage to others, injury to the insured and other occupants of the vehicle and damage to the vehicle itself. It has largely been replaced by the modern personal auto policy.

Family Dependent. A person entitled to coverage because he or she is: 1) the enrollee’s spouse; 2) a single dependent child of either the enrollee or the enrollee’s spouse (including stepchildren or legally adopted children); or 3) a resident of the enrollee’s home.

Family Expense Policy. Coverage for medical expenses of all members of a family.

Family Income Policy. A policy that pays an income up to some future date designated in the policy to the beneficiary after the death of the insured. The period of payment is measured from the date of inception, and at the end of the income period the face amount of the policy is paid to the beneficiary. If the insured lives beyond the income period, only the face amount is payable in the event of the insured’s death.

Family Maintenance Policy. A policy that pays an income to the beneficiary starting after the death of the insured and continuing for a stated period of time. At the end of the income period, the face amount of the policy is paid to the beneficiary.

Family Maximum Benefit. A benefit that is approximately 20 percent greater than the benefit equal to the primary insurance amount (PIA).

Family Members. Persons who reside in the same household as the insured and are related to a named insured by blood, marriage or adoption, or are wards or foster children. Family members also include a student temporarily living away at school.

Family Policy. A policy typically consisting of whole life insurance for the head of the household with smaller amounts of term insurance on other family members.

Family Protection Endorsement. See Uninsured Motorists Endorsement.

Farm Coverage Part. A coverage part available under the commercial package policy. Coverages may be included for farm property, agricultural equipment, livestock and farm liability.

Farm Liability Coverage Form. A commercial liability form attached to a farm coverage part to provide coverage for bodily injury, property damage, personal injury, advertising injury and medical payments for farm exposures.

Farm Personal Property. Scheduled or unscheduled classes of farm property that are covered by the farm property coverage form, including grain, feed, supplies, livestock, farm machines and farm vehicles. Contrast with Household Personal Property.

Farm Property Coverage Form. A farm coverage form that covers residential dwellings, other private structures, household personal property, farm personal property and other farm structures.

Farmers Comprehensive Personal Liability. Similar to the comprehensive personal liability policy but adapted to cover farm hazards, such as damage caused by grazing animals.

Farmowners-Ranchowners Policy. A package policy providing property coverage on farm dwelling buildings and contents, as well as barns, stables and other farm outbuildings. Liability coverage is also included. It is similar to a homeowners policy adapted to cover farm properties.

FAS. See Free Along Side.

FASB. See Financial Accounting Standards Board.

Faultiness. Faulty planning, construction or maintenance that causes a loss. The standard homeowners policy will most likely not cover these losses.

FC&S. See Free-of-Capture-and-Seizure Clause.

FC&S Bulletins. Fire, Casualty and Surety Bulletins. A service, published by the National Underwriter Company, explaining coverages, forms, underwriting and rating procedures for the various property, casualty and surety lines of insurance.

FCAS. See Fellow of the Casualty Actuarial Society.

FCII. Fellow of the Chartered Insurance Institute, whose designation is gained by the completion of examinations and other requisites.

FDIC. See Federal Deposit Insurance Corporation.

Federal Crime Insurance Program. A federally administered program where pooling companies write crime insurance for those unable to secure it in the open market. Available for residential and commercial risks in various states.

Federal Crop Insurance Corporation. An agency within the U.S. Department of Agriculture that provides insurance on growing crops.

Federal Deposit Insurance Corporation (FDIC). An agency of the federal government that insures bank deposits up to a stated maximum.

Federal Emergency Management Agency (FEMA). A government agency that provides disaster relief during emergencies, such as floods, fire, earthquakes, etc.

Federal Employees Compensation Act. Provides workers’ compensation benefits to civilian federal government employees. The government administers and operates the system, as well as provides the benefits; no private insurance is involved.

Federal Employers Liability Act (FELA). Passed by Congress in 1908 before there were workers’ compensation statutes and benefits, this Act covers railroad workers only. It puts injured workers in a favorable position in terms of liability claims, allowing them to sue the employer for negligence. Because railroad workers and their unions were unwilling to trade their favorable positions for statutory benefits, they remain exempt from compensation laws in many states. Cases are decided on the issue of employer liability.

Federal Estate Tax. A federal tax imposed on the deceased’s estate that includes the total assets comprising a person’s estate at death.

Federal Insurance Administration. A government office, part of HUD, that oversees FAIR plans, federal crime plans and the flood program.

Federal Insurance Contributions Act (FICA). See FICA.

Federal Officials Bond. Reimburses the government for loss resulting from the dishonest acts of its employees or their lack of faithful performance.

Federal Qualification. Approval of any HMO made by the Health Care Financing Administration after conducting an evaluation of methods of doing business, documents, contracts facilities and systems.

Fee Maximum. The maximum amount available to a provider for specific health care services under a contract.

Fee Schedule. A list of maximum fees for providers who are on a fee-for-service basis.

Fee Simple. Complete ownership of property with the unconditional right to dispose of it. Compare with Joint Tenancy and Tenancy in Common.

Fee-for-Service Equivalency. The difference between the amount a provider receives from a reimbursement system, such as capitation (a flat charge per month, for instance), compared to fee-for-service reimbursement.

Fee-for-Service Reimbursement. A health care system where physicians and other providers receive payment based on their billed charge for each service provided.

FEGLI. Federal Employees Group Life Insurance.

Fellow of the Casualty Actuarial Society (FCAS). A designation gained by the completion of a series of examinations and other requirements.

Fellow of the Society of Actuaries (FSA). A designation which is gained by the completion of a series of examinations, as well as other experience requirements.

Fellow Servant Rule. A common law defense used by employers before the passage of compensation laws. It held that if an employee was injured due to the carelessness of a fellow employee, the right of action was against the fellow worker and not against the employer. Gradually, the class of “fellow servants” was narrowed, to exclude managers and supervisors —the negligence of a “boss” would no longer release the employer.

Fellow, Life Management Institute (FLMI). See Life Office Management Association.

FEMA. See Federal Emergency Management Agency.

FICA. Federal Insurance Contributions Act. A law imposing a payroll tax to assist in funding Social Security benefits.

Fictitious Groups. Groups formed primarily for the purpose of buying insurance. Under law, such groups may not be underwritten.

Fidelity Bond. Reimburses employers for loss due to the dishonest acts of a covered employee.

Fiduciary. A person holding the funds or property of another in a position of trust, and who is obligated to act in a prudent and ethical manner (e.g., an attorney, bank trustee, the executor of an estate, etc.).

Fiduciary Bond. A bond guaranteeing the faithful performance of a fiduciary.

Field. (1) See Field Force. (2) A type or line of insurance (e.g., life insurance). (3) An area or territory covered by an agent, agency or insurer.

Field Force. The agents and supervisory personnel of insurers who operate away from the home office in the branch offices and general agencies of the company.

Field Representative. See Special Agent.

Field Underwriting. The initial screening of prospective buyers of health insurance, performed by sales personnel “in the field.” May also include quoting of premium rates.

File-and-Use Rating Laws. State laws pertaining to insurance rates which permit insurers to adopt new rates without the prior approval of the insurance department. Usually, insurers submit new rates along with supporting statistical evidence, but this is not necessary in all cases.

Financed Insurance. Payment of insurance premiums, in whole or in part, with funds derived from borrowing, usually from the cash value of the policy. Also known as minimum deposit insurance.

Financed Premium. Paying insurance premiums with funds borrowed outside the contract itself.

Financial Accounting Standards Board (FASB). A non-governmental group that sets standards for generally accepted accounting principles.

Financial Guarantee Bond. A guarantee that others will pay sums of money due (e.g., a sales tax bond guarantees the state that the merchant will pay sales taxes on time and in full).

Financial Responsibility Clause. A clause that says a policy conforms to the financial responsibility laws of any state in which the insured is operating the insured vehicle.

Financial Responsibility Law/Requirements. Laws that mandate that the insured furnish evidence of ability to pay for losses, which most often takes the form of an insurance policy with certain minimum limits of coverage.

Financial Statement. The disclosure of the financial results of a firm’s operations, including the balance sheet, profit and loss statement and associated information.

Fine Arts Floater. Covers fine arts, such as antiques, leaded glass and other works of art, usually on an open perils (all risk) basis.

Fine Print. A reference to imaginary small type in a policy contract that contains exclusions, reductions, exemptions and limitations of coverage. Most state laws specify the minimum type size that can be used in a policy, and provide that exclusions cannot be printed in type smaller than that used for the benefits.

Fire. Combustion that is rapid enough to produce a flame or glow. Property insurance only covers “hostile” fires, or those that have escaped their intended limits or were not started intentionally. Fires in their proper contained area are called “friendly fires” and are not covered under most basic property insurance policies.

Fire Damage Limit. A general liability limit that applies only to the coverage for fire legal liability.

Fire Department Service Clause. A provision in a fire insurance policy that indemnifies the insured for charges incurred due to action by a fire department to save the insured’s property.

Fire Legal Liability. Protects the insured against liability incurred when the insured’s negligent actions result in the destruction of property that is in the insured’s care, custody or control.

Fire Maps. A visual record of the distribution of fire insurance written by all reporting insurers placed on sectional maps. The maps show the distribution of the covered properties in a given area and make it possible to avoid catastrophic losses.

Fire Mark. An insignia, generally metal, once placed on buildings insured by the insurer represented by the mark. Since insurers had their own fire brigades, they had to check the mark on a building to determine whether they should extinguish the fire.

Fire Marshal. A public official responsible for the prevention and investigation of fires. This service is usually financed by a tax on the premiums of property insurers.

Fire Resistive Construction. A building with exterior walls, floors and roof constructed of masonry or other fire-resistive materials.

Fire Wall. A structure (wall) designed to seal off fires within a building.

Fireproof. Buildings that cannot be damaged by fire. However, the term is a misnomer, since no building is completely undamageable by fire, and it is gradually being replaced by the words “fire resistive.”

First Aid to Others. An insured is authorized by the insurance company to incur expenses for first aid to an injured third party when there is bodily injury covered by the policy. Expenses for first aid to an insured person are not covered.

First Loss Insurance. (1) An insurance policy that pays a loss before others covering the same risk. (2) A contract written in such an amount as to cover only an insured’s expected loss during the policy period with no other insurance in existence.

First Loss Retention (or Deductible). See Excess of Loss Reinsurance.

“First” Named Insured. The first person named as an insured on a commercial policy. These forms require an insurer to notify the first named insured rather than notifying all named insureds.

First Offer Plan. A provision in a buy-sell agreement specifying that an offer to sell common stock must first be made to current stockholders.

First Party. In terms of liability, this means the insurance policyholder is at fault in an accident. First party liabilities—or, damage an insured does to himself and his own property—are relatively easy for insurance companies to calculate and control. See also Third Party.

First Party Insurance. Coverage for the insured’s own property or person. Contrast with Third Party Insurance.

First Surplus Reinsurance. The first amount allocated to reinsurance in excess of the original insurer’s net retention. See also Surplus Reinsurance and Lines.

First Surplus Treaty. A contract whereby the reinsurer shares the risk with the ceding company on a pro rata basis. The reinsurer pays a proportion of each loss.

First Year. Refers to various matters during the first year a policy is in force, such as first year premiums and first year claims.

First Year Commission. The commission paid to an insurance agent on the first year’s premium as compensation for a newly sold policy.

Fiscal Intermediary. A commercial insurer contracted by the Department of Health and Human Services to process and administer Part A Medicare claims.

501(c)(9) Trust. A voluntary employee beneficiary association. This is used by some companies to administer benefits.

Five Year Income Averaging. A tax device for lump sum distributions from a qualified plan that enables the individual to pay a lesser amount of income tax on the distribution.

Fixed-Amount Installments. A settlement option that pays a fixed, periodic (annual, semiannual, quarterly, monthly) benefit of a predetermined amount until the proceeds (principal) and interest are exhausted. Also called the amount option and the principal and interest to exhaustion option.

Fixed Annuity. An annuity that provides the annuitant with a fixed payment during the period of the annuity. Fixed annuity payments are considered part of the insurance company’s general account assets (the conservative investment portfolio, not the stock market portfolio).

Fixed Base Liability. The liability coverage needed by fixed base operators, i.e., those who operate commercial enterprises and operate out of one airport (e.g., aircraft dealers, charterers and instructors).

Fixed Benefit Retirement Plan. A plan providing retirement benefits only on a fixed amount or at a fixed percentage—such as 1 percent of monthly salary times the number of years of credited employment; or 25 percent of the employee’s average pay over the last few years prior to retirement.

Fixed Benefit. A benefit with a dollar amount that does not vary.

Fixed Dollar Annuity. Guarantees a fixed, minimum dollar payout during each payout period.

Fixed-Period Installment Option. A settlement option whereby the proceeds are guaranteed to be paid in equal installments for a specified period of time. Proceeds are retained by the insurance company and paid in equal installments over a specified period of months or years. Payments are comprised of both principal and interest. The payments also are established without regard to the length of life of the primary beneficiary. If the beneficiary dies, payments are continued to a second beneficiary. Also called installments certain or time option. (LI)

Fixed Period Option. An option for paying the proceeds of a life insurance policy to beneficiaries whereby the insured chooses the dollar amount of the benefit payment. This fixed amount is paid periodically until the entire proceeds are exhausted. Interest, at a minimum guaranteed rate, is added to the proceeds annually.

Flat. Without interest or service charges. See also Flat Cancellation.

Flat Cancellation. A policy that is canceled on its effective date. Usually under a flat cancellation no premium charge is made.

Flat Commission. A standard scale commission paid to agents regardless of the type of exposure or type of policy. Contrast with Graded Commission.

Flat Deductible. A deductible which is not one of the disappearing or franchise type. A specific amount deducted from each loss or claim.

Flat Maternity Benefit. A stipulated benefit in a hospital reimbursement policy that is paid for maternity confinement, regardless of the actual cost of the confinement.

Flat Rate. A reinsurance premium rate based on the entire premium income received by the ceding company from business ceded to the reinsurer, as distinguished from a rate applicable only to the excess limits premium.

Fleet (or Group) of Companies. A number of insurance organizations under common ownership and often common management.

Fleet Policy. An insurance contract that applies to a number of vehicles. Usually five or more self-propelled vehicles constitute a fleet.

Flesch Test. A method for determining the degree of ease or difficulty for reading material. This method counts not only the number of words in a sentence, but also the number of syllables in each word. It has come into popular use because of state laws requiring that contracts of insurance be easily understandable by someone at the eighth grade level.

Flexible Benefit Plan. A program that allows employees to tailor benefits to meet their own specific needs.

Flexible Premium Adjustable Life Insurance Policy. Another term for universal life policies.

Flexible Premium Annuity. An annuity that allows the contract holder to vary the amount of the premium payment, or stop payments and resume payments at will. A flexible premium annuity is used to fund IRA and Keogh retirement plans because it allows the amount of premium to change as wages change.

Flexible Premium Policy. A life insurance policy that allows the policyholder to vary the amount or timing of premium payments.

Flexible Premium Variable Life. A whole life contract and a security that features flexible premium payments, non-guaranteed cash values and either a minimum guaranteed death benefit or no guaranteed death benefit. Policy values are dependent on the performance of a separate account.

Flexible Spending Account (FSA). A salary reduction cafeteria plan whereby employee funds are used to provide various types of health care benefits.

FLMI. Fellow of the Life Management Institute. See Life Office Management Association.

Floater. An endorsement that applies to movable property, whatever its location, if it is within the territorial limits imposed by the contract. Coverage “floats” with the property.

Flood. A general and temporary condition of partial or complete inundation of normally dry land areas from: overflow of inland/tidal waters; unusual accumulation and runoff of surface waters from any source; or abnormal, flood-related erosion and undermining of shorelines. Flood also means inundation from mud flows caused by accumulations of water on or under the ground, as long as the mud flow and not a landslide is the proximate cause of loss.

Flood Insurance. Reimburses property owners for loss due to the defined peril of flood. Often sold in connection with a government insurance plan.

Floor Plan Insurance. Coverage for merchandise held for sale by a retailer that has been used as collateral for a loan. The lending institution, in effect, is insuring its collateral the merchandise “on the floor” of the retailer.

FOB. See Free On Board.

Following Form. A fire or other form written exactly under the same terms and coverages as other insurance on the same property.

Foreign Insurer. An insurer domiciled in a state other than the one in which the insured’s insurance is written.

Forfeitures. Non-vested remainders in pension plans left by terminated employees. Forfeitures must be used to reduce employer contributions in subsequent years. In profit-sharing plans, forfeitures may be allocated among remaining participants.

Forgery. The false and fraudulent making or altering of a written instrument.

Forgery Bond. See Depositor’s Forgery Insurance.

Forgery or Alteration Coverage Form. A commercial crime coverage form that protects the insured against losses resulting from forgery or alteration of outgoing checks, drafts, promissory notes and similar instruments drawn against the insured’s accounts.

Form. (1) An insurance policy, sometimes called a form, is the written statement of a contract of insurance. (2) An insurance document which, when attached to a policy, makes it complete (e.g., a standard fire policy would have to have a business interruption form attached to it to make up a business interruption policy. (3) Any rider or endorsement, such as a deductible endorsement form.

Formal Plan. A retirement plan set forth in writing whereby contractual and legally enforceable rights pass on to the participating employees.

Formula. How the amount of pension to be received, or contribution to be made under a retirement plan is determined.

Formulary. See Drug Formulary.

Fortuitous Event. See Accident.

Foundation Exclusion Clause. A provision in a fire insurance policy which provides that the value of the foundation is not to be included when determining the value of property at the time of a loss.

Foundering. A term that refers to a ship that is sinking.

401(h) Trust. Governed by IRS Codes, these accounts have limited use for tax-free funding of post retirement benefits. An employer’s 401(h) contribution is limited to no more than 25 percent of total contributions to all retiree benefits, including pension benefits. Since the health liabilities for most employers are so large, a 401(h) could provide only incidental funding.

401(k) Plan. A qualified elective deferral plan where employee contributions are made by means of a salary reduction agreement, with or without matching employer contributions.

403(b). A section of the Internal Revenue Code authorizing tax sheltered annuities as qualified pension plans for employees of nonprofit organizations.

FPA. See Free of Particular Average.

Fractional Premium. A proportionate amount of the annual premium, such as semiannual, quarterly, etc.

Frame. A type of construction. A frame building is primarily made with wood frames and joists.

Franchise Clause. See Franchise Deductible.

Franchise Deductible. A deductible that originated with marine insurance. It states that no claim is payable unless it exceeds a stated amount or a stated percentage of the amount of insurance. Once the claim exceeds that amount or percentage, the entire amount of the claim is payable.

Franchise Insurance. A plan for covering groups of persons with individual policies having uniform provisions, although they may differ in benefits. Individual contracts are issued to each person with individual underwriting. It is usually applied to groups too small to qualify for true group coverage, and the solicitation of cases usually takes place among a workforce with employer consent. In life insurance, it is sometimes called wholesale insurance. Contrast with True Group Insurance.

Fraternal Insurance. Insurance offered to a special group of people, namely, members of a lodge or a fraternal order. It may be written on an assessment basis or on a legal reserve basis.

Fraud. Deceit, trickery or misrepresentation with the intent to induce another to part with something of value or surrender a legal right.

Fraudulent Delivery. In connection with transportation floaters, when a shipper surrenders goods to someone posing as an agent for the carrier, it is held that the goods did not come into the custody of the carrier. If the carrier delivers goods to someone posing as an agent for the receiver, it is held that no valid delivery is made, and the carrier is liable for the loss.

Free Alongside (FAS). A marine shipping agreement which requires the seller to place the goods alongside a named vessel or a designated dock. The seller is responsible for insuring goods up to the time they are alongside.

Free Look Period. A period of time (usually 10, 20 or 30 days) during which a policyholder may examine a newly issued individual policy of life or health insurance, and surrender it in exchange for a full refund of premium if not satisfied for any reason.

Free of Particular Average (FPA). A contract provision that excuses the insurer from liability for losses below a certain percentage or fixed amount. Similar to a deductible.

Free on Board (FOB). The term has special significance in marine insurance, where it is vital to determine when title passes from the seller to the buyer. If the materials are shipped FOB point of destination, the seller is liable for damage caused during the course of transportation. If the material is shipped FOB point of departure, then the buyer becomes liable for it.

Free-of-Capture-and-Seizure Clause. An insurance contract provision that excludes losses due to war, capture and seizure.

Free-Standing Emergency Medical Service Center. A facility whose primary purpose is to provide care for emergency medical conditions. Also called emergi-center or surgi-center.

Free-Standing Outpatient Surgical Center. A facility that only provides outpatient surgical services. Also called surgi-center.

Freight. A charge for the transportation of goods.

Frequency. The number of times a service is provided over a given time period.

Friendly Fire. See Fire.

Fringe Benefits. See Employee Benefit Program.

Fronting. When the ceding company retains a very small part of a risk and reinsures the large majority of it with one or more reinsurers.

FSA. See Fellow of the Society of Actuaries.

Full Coverage. Insurance that provides for the payment of all insured losses in full. For example, some health insurance policies provide for full coverage without a deductible, participation or a coinsurance clause.

Full Preliminary Term Reserve Valuation. A method for determining reserves on life insurance contracts, whereby no reserve is required for the first year of a contract’s life, with an appropriate adjustment in subsequent years’ reserves to make up the difference. This method of valuation makes it possible for an insured to have more funds available for the high first-year expenses incurred in the writing of life insurance.

Full Reporting Clause. A clause that requires an insured to report values periodically. The clause provides for a penalty to the insured if true values are not reported.

Fully Insured Plan. A qualified plan whereby contributions are made to an insurer and benefits and plan administration are provided by the insurance company in behalf of plan participants.

Fully Insured Status. A provision of OASDHI that sets forth the qualifications for eligibility for retirement benefits under the Social Security system. For most people, this means having worked 40 calendar quarters (usually 10 years) at covered employment, though there are some exceptions. Contrast with Currently Insured Status. See also Social Security Disability Income Benefits.

Fully Paid Policy. A limited payment life insurance contract on which all required payments have been made. For instance, a 20-pay life policy would be fully paid after the insured has paid premiums for 20 years.

Functional Valuation Endorsements. Endorsements that allow property to be replaced with less costly property that is functionally equivalent to the damaged or destroyed property; that is, similar property that performs the same function when replacement with identical property is impossible or unnecessary.

Fund. (1) Money and investments held in trust in order to pay pension benefits. (2) To accumulate money necessary to pay pension benefits; to pay into the fund each year enough to cover the pension plan’s obligations for that year.

Funded. Having sufficient funds to meet future liabilities. Often used with a pension plan’s outstanding claims account.

Funded Deferred Compensation Plan. A compensation plan in which the employer actually sets aside a sum of money or other assets into an account or trust as security for the employer’s promise to deliver the deferred benefits at a later date. The employee usually is named as the beneficiary of this trust, cash or property. This plan ties the employee to the company and the employer except for retirement, death or disability. If the employee leaves for any other reason, the deferred amounts are forfeited.

Funding, Advance. See Advance Funding. Predetermined sums set aside to provide for the payment of future retirement benefits.

Funding, Disbursement. Also known as the “pay-as-you-go” method, this type of funding requires no funds to be set aside to provide retirement benefits. All benefits paid to retired employees are paid from the company’s gross income and are deducted as a normal business expense.

Funding, Terminal. See Terminal Funding. Funding that requires no funds to be set aside for retirement benefits, however, as each employee retires, an immediate lifetime annuity is purchased for him or her.

Funding Level. The dollar amount required to purchase a particular medical care program. Usually measured by the premium rate for an insured program, or an amount assessed for expected claim loss and related fees under a self-funded program.

Funding Medium/Funding Vehicle. The arrangement through which funding methods operate (e.g., trust agreement; custodial account; deposit administration contract; or group annuity contract).

Funding Method. (1) The agreed means by which an employer pays for health coverage. (2) How money is accumulated for future payment of pension benefits.

Funeral Benefit. Coverage under an auto policy that pays if the insured or a family member dies in an auto accident.

Fur and Jewelry Floater. Usually an open perils (all risk) form that applies to the furs and jewelry scheduled in the policy whatever their location.

Furriers Customers Insurance. An inland marine form purchased by a furrier to protect furs in storage belonging to customers.

Future Increase Option (FIO). An option that allows the insured to increase disability income benefits at predetermined times, specified in the policy, without evidence of insurability. Normally, the rider is not available past age 40, although some insurers may offer it up to age 50.

Future Interest. Generally means the future interest and enjoyment of personal property provided for an individual by means of a gift.