Chapter 1: Basic Principles of Life and Health Insurance Keywords

A set of vocabulary flashcards defining key insurance terms, roles, and departmental functions from Chapter 1 of the insurance training material.

Agent

An individual authorized to solicit, sell, and transact coverage for specific insurance providers under an agent contract.

Broker

A person who represents the insured (client) rather than the insurance company and cannot bind coverage.

Claims Department

The department responsible for processing, investigating, and paying claims.

Insurance

The transfer of risk through the pooling or accumulation of funds.

Insured

The customer who receives insurance protection under an insurance policy.

Insurer

An insurance company that provides coverage and assumes risk.

Mutual Insurance Company

An insurer owned by policyholders that typically issues participating insurance policies with potential dividends.

Nonparticipating Policy

A policy that doesn't provide dividends or voting rights to policy owners.

Participating Policy

A policy that allows policy owners to receive dividends and elect the board of directors.

Producer

An individual licensed to sell, solicit, or transact insurance, including both agents and brokers.

Stock Insurance Company

An insurer owned by stockholders that typically issues nonparticipating policies.

Underwriting Department

The department responsible for reviewing applications, approving or declining coverage, and assigning risk classifications.