- Flexible Benefit: An employee benefits programme which offer members a variety of benefits options.
- Fee For Service: A system of payment where the heath care provider is paid on a per service basis for a patient. He is not paid on a pre negotiated basis. This system is commonly found in PPO health plans.
- Field underwriting: It is the first stage of screening done by a broker when you apply for a plan. Though his decision is not final, the person usually knows the rules of a company. Therefore he can always ascertain your eligibility.
- Face Amount: This is a term related to whole life insurance. It refers to the death benefit that is to be paid if the person insured dies while the policy cover is on.
- Facultative Reinsurance: This is a reinsurance policy which covers particular individual risks that are so uncommon or so huge that they are not included in the company’s reinsurance provisions. These may include policies to cover jumbo jets and oil rigs. Companies offering reinsurance are not obliged to offer this facility. They may decide individually on cases. This is as opposed to treaty reinsurance where the insurer assumes certain responsibilities for all kinds of businesses.
- Fair Plans / Fair Access to Requirements of Insurance Plans: These refer to insurance pools selling property insurance to groups which are so high risk that they cannot obtain insurance in the voluntary market. These plans are offered in 28 states and in the District of Columbia. These plans insure against fire, riot, vandalism and windstorm losses. The plans vary from state to state. However, all states do require property insurers in that state to participate and share in the proceeds.
- Family Benefit Coverage: This is a kind of supplementary rider carried with a life insurance policy which insures the spouse and children of the insured. It is also known as dependant life insurance or insurance rider of spouse and children.
- Farm and Ranch Owners Insurance: These policies protect against named perils. They usually cover homes along with stables, barns and other structures.
- Financial Guarantee Insurance: These plans cover losses related to specific transactions. They ensure that people investing in debt instruments receive their dues on time in case of a default. This provision tends to increase the credit rating of the debt to which it is attached. This insurance is used by investment bankers who sell securities backed by assets as well as securities that are backed by loan portfolios.
- Federal Funds: These are funds that are lent between depository institutions. These are usually on an overnight basis. They also include certain other types of borrowings. The term includes borrowings from federal agencies also.
- Federal Insurance Administration or FIA: This is the federal institute in charge of the National Food Insurance Programme. It has no role to play in the regulation of the insurance industry.
- Federal Reserve Board: It is a board comprising seven members that regulates the banking system. This is done by issuing regulations and exercising control over bank holding companies. It is also the agency controlling credit supply and functions of the US monetary system abroad.
- Fiduciary Bond: This is a type of bond which certain fiduciaries are required to provide. Executors and trustees are sometimes required to provide these bonds as surety to guarantee their responsibilities.
- Fiduciary Liability: This refers to the responsibility of a fiduciary wherein he is required to protect the assets of his beneficiaries by law. A pension fund manager, for example, is to manage the funds in such a manner as to secure the best investment for his beneficiaries. Cover is also provided against misleading statements or other mistakes by the fiduciaries.
- File and Use States: These refer to states in which the companies must file changes in their rates with the regulators. They can put the rates into effect immediately without waiting for prior approval from the regulators.
- Financial Guarantee Insurance: This insurance guarantees cover against losses suffered from certain types of investment. People investing in municipal bonds, a type of debt bond, are assured of receiving the principals and interests in case of a default. Investment bankers selling securities backed by assets make use of this type of insurance to make them more attractive.
- Financial Responsibility Law: This is a state law which requires that the drivers of automobiles should have a certain capacity to pay for damages if involved in an accident. The law differs between states. The criteria may be met by having an amount of auto liability insurance.
- Finite Risk Reinsurance: This is a type of contract which sets the cap on the ultimate responsibility undertaken by the reinsurer. In this contract, the expected income from investments is clearly acknowledged as a part of underwritings. This coverage is usually bought to improve balance sheet effects.
- Fire Insurance: This is usually a part of homeowners’ policies and multi peril policies. They provide covers against damages to property due to fires and lightening.
- First Party Coverage: This refers to coverage provided for the person or property of the owner of the policy. Auto insurances with a no fault clause include payments for the costs of injuries. For no fault states which have the broadest coverage, this coverage implies personal injury protection (PIP). This pays for lost income, medical care and funeral expenses. If the injured is unable to provide child care facilities, the coverage provides for that also.
- Fixed Annuity: This is an annuity which guarantees the provision of a particular rate of return. In a deferred annuity, a minimum level of interest is ensured during the savings period. A fixed income on a regular basis is guaranteed in the payment phase.
- Flexible Premium: This a method of premium payment offered with annuities and with life insurance. It allows the owner to change the frequency and amount of premiums he will pay. There are of course limitations on the changes allowed.
- Floater: This is an attachment to homeowners’ policies. A floater basically insures property that is movable and covers losses when they occur. Items commonly insured with a floater are expensive musical instruments, jewellery and furs. The coverage is broader than that of homeowners insurance.
- Flood Insurance: The national flood insurance programme provides coverage against damage by floods. However, this is sold by insurance agents with licenses. Most commercial policies and homeowners policies do not cover damage caused by floods. Some comprehensive auto insurances however provide covers for this type of damage.
- Forced Place Insurance: This refers to insurance bought by a creditor or a bank on behalf of an uninsured debtor. In case of property damage, funds are made available for their repair.
- Foreign Insurance Company: This is a term referring to an insurance company based in one state and doing business in other states.
- Fraternal Insurer: This is a term which refers to an organization offering social and insurance benefits to its members on a nonprofit basis. It is also called a fraternal benefit society.
- Fraud: This refers to a deliberate misrepresentation of facts either by the applicant to an insurance company or by the company itself. This is done to obtain a policy which would otherwise have been rejected. The insurance company or its employees and agencies may also engage in these practices for financial gain.
- Free Look Period: This is the period, usually a month, during which an annuity may be cancelled. The time and laws guarding it vary from state to state.
- Frequency: This is the calculated number of times a loss occurs. This is one of the factors considered while deciding on premiums.
- Fronting: This is the method by which a primary insurer passes on the risk for a policy to a reinsurer for a commission. This is often done in cases where the reinsurer is not functioning in a particular state where the primary insurer had taken the policy. Often in such cases, the reinsurer is either a captive or an insurance company that cannot operate in the said state.
- Futures: This is an agreement to purchase securities at a set price on a particular date. The products involved are usually commodities, financials or indexes.
- Future Purchase Option: This is a provision guaranteeing the insured person the right to purchase of additional coverage without providing evidence of insurability. It is also known as guaranteed insurability option.