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
UMBRELLA
POLICY
Coverage for losses above the limit of an underlying policy
or policies such as homeowners and auto insurance. While it
applies to losses over the dollar amount in the underlying policies,
terms of coverage are sometimes broader than those of underlying
policies.
UNBUNDLED CONTRACTS
A form of annuity contract that gives purchasers the freedom
to choose among certain optional features in their contract.
UNDERINSURANCE
The result of the policyholder’s failure to buy sufficient
insurance. An underinsured policyholder may only receive part
of the cost of replacing or repairing damaged items covered
in the policy.
UNDERWRITING
Examining, accepting, or rejecting insurance risks and classifying
the ones that are accepted, in order to charge appropriate premiums
for them.
UNDERWRITING INCOME
The insurer’s profit on the insurance sale after all expenses
and losses have been paid. When premiums aren’t sufficient
to cover claims and expenses, the result is an underwriting
loss. Underwriting losses are typically offset by investment
income.
UNEARNED PREMIUM
The portion of a premium already received by the insurer under
which protection has not yet been provided. The entire premium
is not earned until the policy period expires, even though premiums
are typically paid in advance.
UNINSURABLE RISK
Risks for which it is difficult for someone to get insurance.
(See Insurable risk)
UNINSURED MOTORISTS COVERAGE
Portion of an auto insurance policy that protects a policyholder
from uninsured and hit-and-run drivers.
UNIVERSAL LIFE INSURANCE
A flexible premium policy that combines protection against premature
death with a type of savings vehicle, known as a cash value
account, that typically earns a money market rate of interest.
Death benefits can be changed during the life of the policy
within limits, generally subject to a medical examination. Once
funds accumulate in the cash value account, the premium can
be paid at any time but the policy will lapse if there isn’t
enough money to cover annual mortality charges and administrative
costs.
UTILIZATION REVIEW
See Medical utilization review
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