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Glossary of Insurance Terms - E

Glossary of terms used in insurance - E

  1. Effective Date: The actual date from which you are covered. The insurance cover does not start until this date.
  2. Employee Assistance Programmes (EAPs): These are mental counseling services offered by insurance companies or employers. In a typical plan, the employers or individuals do not have to pay for the services directly.
  3. Exclusions: Services which are not covered by the insurance companies.
  4. Explanation of Benefits: This is a written explanation by the company to the members. It explains the benefits and the portions to be paid by the company.
  5. Eligible Employee: An employee who can receive coverage based on the conditions of the group plan.
  6. Employee Contribution: The part of insurance premium paid by the employee. This is usually provided from the wages.
  7. Evidence of Insurability: This is an evidence to be provided by the applicant regarding the condition of his health. It is in writing and in the form of a questionnaire. This evidence is not required except in specific cases under a group plan.
  8. Emergency Care: Care for patients requiring immediate medical attention due to a life threatening condition.
  9. Enrollee: A person who has enrolled for a plan and may receive coverage.
  10. Experimental Procedures: Services which have not been proved to be safe treatment for a particular cause.
  11. Expiration Date: The day your coverage ends.
  12. Effective Date: The day your cover begins.
  13. Eligibility Date: The day on which an employee becomes eligible to apply for insurance. This is applicable on group life or health plans.
  14. Eligibility Period: A fixed length of time after the eligibility date during which a member can apply for insurance without evidence of insurability.
  15. Eligibility Requirements: This refers to the conditions an employee must satisfy in order to apply for a retirement plan, e.g., one such condition starts that you have to be in the service of the employer between one to three years.
  16. Employee Certificate of Insurance: The certificate provided to an employee under a group plan which details his plan benefits.
  17. Employee Retirement Income Security Act (ERISA): It refers to a legislation passed in 1974 applying to private pension and welfare plans. It ensures the provision of certain minimum standards to protect employees.
  18. Employer Contribution: The insurance premium paid by the employer.
  19. Evidence Of Insurability: Any evidence of a person’s health condition at the time of applying for insurance.
  20. Exclusive Agent: An agent who deals with only one insurance company.
  21. Exclusive Provider Organization (EPO): A type of PPO where the member can go to particular providers rather than a choice of PPOs. These plans typically have a primary care physician who looks after the overall health of the member and then makes suitable referrals to specialists. Members must receive services from networked providers. Services outside the network are not reimbursed.
  22. Earned Premium: This refers to the total amount of premium that has accumulated because there have been no claims during the mentioned period.
  23. Elimination Period: This is another term for ‘waiting period’. It indicates the amount of time that must elapse before cover can be claimed.
  24. Encumbrance: This refers to a claim on a particular property for e.g. a mortgage. An increasing encumbrance reduces the interest of a property owner.
  25. Expense Ratio: This refers to the ratio between net written premiums and expenses incurred in underwriting. It basically looks at the underwriting capacities of the company.
  26. Exposure: This is an estimate of the company’s chances of loss and it is usually calculated in dollar terms or in units.
  27. Early Warning System: This is a system created by insurance regulators to gauge the financial stability of the company. The IRIS is one such system. It identifies financial ratios to indicate insurers who must be regulated.
  28. Earthquake Insurance: This policy covers buildings together with what it contains. These plans usually involve a high deductible. These are of course plans with special endorsements as earthquake covers are not available in normal home owners’ plans.
  29. Economic Loss: This refers to financial loss as a result of the death or disability of a person. It also covers loss from property destruction. The covers also extend to loss of earnings and funeral expenses. However, it does not include losses from non economic sources.
  30. Ecommerce or Electronic Commerce: This refers to the online selling of such products as insurance etc.
  31. Employee Dishonesty Coverage: These plans cover damages to business as a result of dishonest acts of employees. It is also known as a fidelity bond.
  32. Employment Practices Liability Coverage: These plans cover damages to the employer due to the violation of an employee’s legal rights. These may be discrimination, undue termination etc.
  33. Endorsement: This is a written communication attached with an insurance policy which changes the coverage or conditions. It is also call a rider.
  34. Endowment Insurance: This is a type of plan where a certain amount of money is paid at the death of a person or on a certain date if the person is alive at that time.
  35. Environmental Impairment Liability Coverage: This is a type of insurance that covers damages to property caused by pollution. It covers the losses or liabilities of the owner due to the above factors.
  36. Equity: This indicates the shareholders’ share in investments. In corporations, the term relates to stocks.
  37. Equity Indexed Annuity: These are nontraditional fixed annuities. A fixed minimum rate of interest is specified as in fixed annuities. Also, additional interests may be given to policy values. This decision depends on positive changes in well known indexes as the S&P 500. The additional interest depends on the policy. These are regulated by state insurance departments and are sold by agents who are licensed.
  38. Errors and Omissions Coverage (E/O): This is coverage for professional liabilities arising out of negligent acts on the part of the owner. It relates to harm or damages caused to clients due to such negligent acts.
  39. Escrow Account: These relate to funds collected by a lender which is used to pay premiums for mortgages and homeowners insurances. They are also used to pay for property taxes.
  40. Excess and Surplus Lines: These are property and casualty covers that are not normally available from state licensed insurers. They are usually purchased from carriers who are non-admitted.
  41. Excess of Loss Reinsurance: This refers to a contract between the insurer and the reinsurer. By this agreement, the insurer agrees to pay a certain part of the claims and the reinsurer agrees to pay the rest.
  42. Exclusive Remedy: This is a part of the social contract that is the foundation of workers’ compensation. Under this statute, employers are held responsible for injuries to and illnesses of the workers which are work related. This is independent of the actual fault of the employer. In return the employee loses his right to take his employer to court if he suffers harm due to a negligent act of his employer.
  43. Extended Coverage: This is an endorsement added to an existing plan or policy which adds certain other covers not present previously. The risks covered are increased with these additions.
  44. Extended Replacement Coverage of Cost: This provision ensures the payment of a certain amount of money above the limit of the policy to replace a damaged home. The amount is generally around125%. It is similar to a guaranteed replacement policy. Companies offering homeowners’ policies usually track inflation in the costs of building. These plans are designed to protect against disasters which might escalate the costs of reconstruction.
  45. Extended Term Insurance Option: This option allows the policy owner to stop premium payments and buy term insurance with the policy’s net cash value. Full coverage is provided at settled amount as under the original policy.

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