Dictionary of Insurance Terms -P-

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  Package Policy: A combination of two
  or more individual polices or coverages into a single policy. A homeowners
  policy, for example, is a package combining property, liability and theft
  coverages for the homeowner.
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  Paid-up Insurance: Insurance on
  which all required premiums have been paid. The term is frequently used
  to mean the reduced paid-up insurance available as a nonforfeiture option.
• 
  Partial Disability: The result
  of an illness or injury which prevents an insured from performing one or
  more of the functions of his/her regular job.
• 
  Partial Disability: A benefit sometimes
  found in disability income policies providing for the payment of reduced
  monthly income in the event the insured cannot work full time and/or is
  prevented from performing one or more important daily duties pertaining
  to his occupation.
• 
  Participating Insurance: Insurance
  issued by an insurance company providing participation in dividend distribution.
• 
  Participating Policy: One under
  which the policy owner is entitled to receive shares of the divisible surplus
  of the insurer. Such shares are commonly called dividends.
• 
  Pension Benefit
  Guaranty Corporation (PBGC): The Federal body responsible for administering
  the plan termination insurance program under ERISA.
• 
  Pension Plan: A plan established and
  maintained by an employer, group of employers, union or any combination,
  primarily to provide for the payment of definitely determinable benefits
  to participants after retirement.
• 
  Peril: The cause of a possible loss, such as
  fire, windstorm, theft, explosion, or riot.
• 
  Persistency: A term used to refer to the
  length of time insurance remains continuously in force.
• 
  Personal Articles Floater:
  A form of coverage designed to meet the needs for insurance on property
  of a moveable nature. The coverage usually protects against all physical
  loss, subject to special exclusions and conditions. Examples of property
  covered include jewelry, furs, silverware, fine arts.
• 
  Personal Injury Protection
  (PIP): First-party no-fault coverage in which an insurer pays, within
  the specified limits, the wage loss, medical, hospital and funeral expenses
  of the insured.
• 
  Personal Lines: Those types of insurance,
  such as auto or home insurance, for individuals or families rather than
  for businesses or organizations.
• 
  Personal representative: A
  person appointed through the will of a deceased or by a court to settle
  the estate of one who dies.
• 
  Physical Damage: Damage to or loss
  of the auto resulting from collision, fire, theft or other perils.
• 
  Plan Administrator: The person
  or persons controlling the money or property contributed to the plan, usually
  designated in the plan agreement.
• 
  Point-of-Service Plans: Often
  known as open-ended HMOs or PPOs, these plans permit insureds to choose
  providers outside the plan yet are designed to encourage the use of network
  providers.
• 
  Policy: The printed legal document stating
  the terms of the insurance contract that is issued to the policyholder
  by the company.
• 
  Policy: A contract of insurance.
• 
  Policy: The legal document issued by the company
  to the policyholder, which outlines the conditions and terms of the insurance;
  also called the policy contract or the contract.
• 
  Policy Dividend: A refund of part
  of the premium on a participating life insurance policy reflecting the
  difference between the premium charged and actual experience.
• 
  Policy Loan: A loan made by a life insurance
  company from its general funds to a policyholder on the security of the
  cash value of a policy.
• 
  Policy Reserves: The measure of the
  funds that a life insurance company holds specifically for fulfillment
  of its policy obligations. Reserves are required by law to be so calculated
  that, together with future premium payments and anticipated interest earnings,
  they will enable the company to pay all future claims.
• 
  Policy Term: That period for which an
  insurance policy provides coverage.
• 
  Policyholder: The person who owns a life
  insurance policy. This is usually the insured person, but it may also be
  a relative of the insured, a partnership or a corporation.
• 
  Policyholder: A person who pays a premium
  to an insurance company in exchange for the insurance protection provided
  by a policy of insurance.
• 
  Policyholders’ Surplus: Sum
  left after liabilities are deducted from assets. Sums such as paid-in capital
  and special voluntary reserves are also included in this term. This surplus
  is an additional financial protection to policyholders in the event a company
  suffers unexpected or catastrophic losses. In effect, it is the financial
  base that permits a company to sell insurance.
• 
  Pollution Liability: Exposure
  to lawsuits for injury or cleanup costs that result from pollution damage
• 
  Pool: An organization of insurers or reinsurers
  through which particular types of risk are underwritten and premiums, losses
  and expenses are shared in agreed upon amounts.
• 
  Preferred Stock: Evidence of ownership
  which entitles the owners to receive dividends from the corporation before
  the common stockholders and which usually also provides a prior claim to
  corporate assets if the corporation is dissolved.
• 
  Premium: The sum paid by a policyholder to
  keep an insurance policy in force.
• 
  Premium finance: allows the insured to pay
  part of the premium when coverage takes effect and pay the rest during
  the policy period.
• 
  Premium Loan: A policy loan made for
  the purpose of paying premiums.
• 
  Premium Tax: A tax, imposed by each state,
  on the premium income of insurers doing business in the state.
• 
  Primary Beneficiary: See Beneficiary.
• 
  Primary Insurance: Insurance that
  pays compensation for a loss ahead of any other insurance coverages the
  policyholder may have.
• 
  Probate: The court supervised process of validating
  or establishing a distribution for assets of a deceased including the payment
  of outstanding obligations.
• 
  Probate estate That portion of the
  assets and liabilities whose distribution is supervised by the courts in
  the probate process.
• 
  Probationary Period: A period
  from the policy date to a specified time, usually 15 to 30 days, during
  which no sickness coverage is effective. It is designed to eliminate a
  sickness actually contracted before the policy went into effect.
• 
  Product Liability: legal liability
  incurred by a manufacturer, merchant, or distributor because of injury
  or damage resulting from the use of its product.
• 
  Product Liability Insurance:
  Protection against financial loss arising out of the legal liability incurred
  by a manufacturer, merchant, or distributor because of injury or damage
  resulting from the use of a covered product.
• 
  Professional Review
  Organization (PRO): An organization in which practicing physicians
  assume responsibility for reviewing the propriety and quality of health
  care services provided under Medicare and Medicaid.
• 
  Proof of Loss: Documentation presented
  to the insurance company by the insured in support of a claim so that the
  insurer can determine its liability under the policy.
• 
  Proof of Loss: Documentary evidence
  required by an insurer to prove a valid claim exists. It usually consists
  of a claim form completed by the insured and the insured’s attending physician.
  For medical expense insurance itemized bills must also be included.
• 
  Property Damage Coverage:
  An agreement by an insurance carrier to protect an insured against legal
  liability for damage by an insured automobile to the property of another.
• 
  Property Insurance: Insurance providing
  financial protection against the loss of, or damage to, real and personal
  property caused by such perils as fire, theft, windstorm, hail, explosion,
  riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and
  civil commotion, and smoke.
• 
  Property Insurance: Provides financial
  protection against loss or damage to the insured’s property caused by such
  perils as fire, windstorm, hail, etc.
• 
  Proration: The adjustment of benefits paid
  because of a mistake in the amount of the premiums paid or the existence
  of other insurance covering the same accident or disability.
• 
  Prototype Plan: A standardized plan,
  approved and qualified as to its concept by the Internal Revenue Service,
  which is made available by life insurance companies, banks and mutual funds
  for employers’ use.
• 
  Provision: A part (clause, sentence, paragraph,
  etc.) of an insurance contract that describes or explains a feature, benefit,
  condition, requirement, etc. of the insurance protection afforded by the
  contract.
• 
  Proximate Cause: The dominating cause
  of loss or damage; an unbroken chain of events between the occurrence and
  damage.
• 
  Punitive Damages: a court awarded
  amount that exceeds the economic losses and general damages of a defendant
  and is intended solely to punish the plaintiff