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GLOSSARY OF INSURANCE TERMS

There are 528 entries in this glossary.
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Term Definition
GAP INSURANCE

An automobile insurance option, available in some states, that covers the difference between a car’s actual cash value when it is stolen or wrecked and the amount the consumer owes the leasing or finance company. Mainly used for leased cars. (See Actual cash value )

GENERAL ACCOUNT

Insurers have the ability to maintain finances that support contractual obligations for guaranteed insurance products such as whole life insurance or fixed rate annuities.

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

Generally accepted accounting principles (GAAP) accounting is used in financial statements that publicly held companies prepare for the Securities and Exchange Commission. (See Statutory accounting principles/SAP )

GENERIC AUTO PARTS

Auto crash parts produced by firms that are not associated with car manufacturers. Insurers consider these parts, when certified, at least as good as those that come from the original equipment manufacturer (OEM). They are often cheaper than the identical part produced by the OEM. (See Crash parts,Aftermarket parts, Competitive replacement parts, Original equipment manufacturer parts / OEM )

GLASS INSURANCE

Coverage for glass breakage caused by all risks; fire and war are sometimes excluded. Insurance can be bought for windows, structural glass, leaded glass and mirrors. Available with or without a deductible.

GRACE PERIOD

A stated time period (usually 30 or 31 days), granted by a provision in the life insurance contract, that follows a premium due date in which the renewal premium can be paid without loss of policy rights.

GRADED PREMIUM POLICY

A version of modified-premium whole life policy that requires three or more levels of annual premium payments in which the payment increases until the amount to be paid is reached.

GRADUATED DRIVER LICENSES

Licenses for younger drivers that allow them to improve their skills. Regulations vary by state, but often restrict nighttime driving. Young drivers receive a learner’s permit, followed by a provisional license, before they can receive a standard driver’s license.

GRAMM-LEACH-BLILEY ACT

Financial services legislation, passed by Congress in 1999, that removed Depression era prohibitions against the combination of commercial banking and investment banking activities. It allows insurance companies, banks and securities firms to engage in each others’ activities and own one another.

GROSS ANNUITY COST

The amount that is equal to the present value of future periodic income payments that are under an annuity contract. These are calculated on a gross basis.

GROUP INSURANCE

A single policy covering a group of individuals, usually employees of the same company or members of the same association and their dependents. Coverage occurs under a master policy issued to the employer or association.

GUARANTEE PERIOD

Period during which the level of interest specified under a fixed annuity is guaranteed.

GUARANTEED DEATH BENEFIT

Basic death benefits guaranteed under variable annuity contracts.

GUARANTEED INCOME CONTRACT / GIC

Often an option in an employer-sponsored retirement savings plan. Contract between an insurance company and the plan that guarantees a stated rate of return on invested capital over the life of the contract.

GUARANTEED INSURABILITY (GI) BENEFIT

Gives the owner of the policy the ability to obtain additional insurance of the same type as their life insurance that gives them the Guaranteed Insurability benefit on states dates. Also known has guaranteed insurability option.

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