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Glossary of Insurance Terms - N

Glossary of terms used in insurance - N

  1. Network: A collection of doctors and other health care service providers under contractual service to an insurance company. Members avail of discounted services from these providers. Networks may cover large geographical markets or health care services. You pay less when you visit a network provider.
  2. NAIC: National Association of Insurance Commissioners. It is a group of state officials regulating insurance. It was formed in order to secure uniformity in regulation of insurance in the country.
  3. Non Participating Provider: A health care provider who has not entered into a contract with the insurance company.
  4. Non Contributory: It is an employee benefits programme in which the total cost of health care benefits is borne by the employer. In this system, all eligible employees must be insured.
  5. Non Profit Insurers: An association of people organized under law to provide different insurance on non profit basis. Certain types of taxes are not applicable to them.
  6. Named Peril: These are the perils or conditions that are mentioned specifically in the insurance contract as covered.
  7. National Floods Insurance Programme: This is a programme sponsored by the federal government. Under this programme, flood insurance is offered to the people affected by floods.
  8. Net Annuity Cost: This refers to an amount of money that is equal to the present valuation of future periodic payments. This is considered under an annuity contract. It is calculated on a net basis. It does not have a separate provision for expense loading. It is the opposite of gross annuity contract.
  9. Net Payment Cost Comparison Index: This is an index which uses cost comparisons. It is used to compare life insurance policies over a 10 or 20 year period. It assumes that the policy holder continues to pay a premium over the entire span of time. It is the opposite of a surrender cost comparison index.
  10. No Fault: This is an auto insurance coverage that pays for the injuries of each individual driver. This is done irrespective of who caused the accident. It also refers to an auto liability insurance procedure that limits lawsuits to cases which are serious only. These policies are intended to encourage reduced litigation and quicker reimbursements.
  11. No Fault Medical: This is a coverage provided in homeowners’ policy. It provides for a type of accident coverage.
  12. No Pay, No Play: This refers to an idea that people who don’t pay for coverage should not be receiving the benefits. This prevents drivers from claiming damages from drivers who are not insured. Under this provision, in most states, drivers who are not insured may not legally sue for pain and suffering or other such non monetary claims. In certain other states, the drivers are required to pay a heavy deductible before they can claim for property damages and a separate deductible before they can claim for harms to the body.
  13. Non -Admitted Assets: This refers to those assets which are not included in the financial balance sheet of the company. This includes furniture, past account receivables, debt balances of agents etc.
  14. Non Admitted Insurer: This refers to those insurers who are licensed in one state but not in others. The company is called non -admitted in those states where it is not licensed. In these states, they mainly sell those covers which are not covered by licensed insurers in that state.
  15. Non Forfeiture Options: These refer to the different ways in which a contract owner might apply the cash surrender value of an annuity programme, if it lapses, or an insurance plan. In the US, cash payment option, extended term insurance option and reduced paid up insurance option are the typical non forfeiture options available for an insurance plan.
  16. Notice of Loss: This is a written intimation sought by insurance companies after a loss or an accident. This is a typical part of standard provisions that define a policy holder’s duties in case of a loss.
  17. Nuclear Insurance: These policies cover property damage and other liabilities as regards nuclear reactors and other facilities. The covers are provided for different accidents. Both the federal government and the private insurers offer these covers.
  18. Net Income: This refers to the total earnings of the company as displayed in the NAIC annual statement after taxes deducted. This refers to the income from realized capital gains and incomes generated from operations.
  19. Net Investment Income: This term refers to the investment income earned in a year after the investment expenses and depreciations on real estate have been deducted. These refer to expenses made in order to generate investment incomes and capital gains. They do not include income taxes.
  20. Net Leverage: This refers to the sum of the net premiums written to policy holder’ surplus and its net liabilities to surplus. It is expressed as a ratio. It indicates the company’s exposure to errors in pricing and errors in estimation.
  21. Net Liabilities to Policyholders’ Surplus: This expresses the net liabilities of a company to its policy surplus. The net liability refers to the sum of total liabilities and encumbrances from which conditional reserves and smaller receivables or payables have been deducted. This is usually the most important element in the calculation of net liability leverage.
  22. Net Premium: This refers to the total premiums deposited from which the total commission payable to the agents has been deducted.
  23. Net Premiums Earned: This refers to an adjustment by the company in its net premiums written in a year. As business increases, the earned incomes are less than written premiums. As volume increases, it is considered that the premiums are fully paid up at the start of the policy. At the end of the stipulated time, it must set up the premiums to represent the terms of the policies which have not expired. The reverse is true in case of a decrease in volume.
  24. Net Premiums Written: This refers to an addition of gross written premium and reinsurance assumed from which reinsurance ceded is subtracted.
  25. Net Underwriting Income: This is the total of net premiums earned from which incurred losses, underwriting expenses and dividends to policy holders have been subtracted.
  26. Non Standard Auto (High Risk Auto or Substandard Auto): This is insurance for motorists who have poor records in driving. They also cover those drivers who have been refused insurance. The additional risks in covering these individuals make the premiums for these plans high.
  27. Non- Recourse Mortgage: This is a home loan where the amount owed by the borrower can never be more than the value of the house at the time the repayment takes place.
  28. Non –Cancellable: These refer to the contract terms that can never be changed, including the costs.

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