Glossary of Insurance Related Terms

Occupational Hazard

A condition in an occupation that increases the peril of accident, sickness, or death. (LI,H,WC)

Occupational Hazards

Occupations which expose the insured to greater than normal physical danger by the very nature of the work in which the insured is engaged, and the varying periods of absence from the occupation, due to the disability, that can be expected.

Old Line

A term without a precise meaning but generally applied to nonfraternal insurers operating on a legal reserve basis. The origin of the term is in doubt but it seems to have come into use at the time of the competition between the "new" fraternal insurers and the commercial insurers to indicate the fact that the fraternals were "newcomers." (LI)

Open Debit

A Life and Health Insurance debit (territory) currently without an agent. (LI,H)

Operating Ratio

The sum of expenses and losses expressed as a percent of earned premium.

Option

A choice of methods of receiving policy dividends, nonforfeiture values, death benefits, or cash values. (LI)

Option A plan

A plan used in universal life insurance in which the potential policy proceeds remain level. In an option A plan, the policy proceeds are equal to the policy’s death benefit. Consequently, the net amount at risk is equal to the difference between the policy’s death benefit and the policy’s cash value. As the cash value increases, the net amount at risk decreases.

Option B plan

A plan used in universal life insurance in which the potential policy proceeds increase. In an option B plan, the policy proceeds are equal to the death benefit plus the policy’s cash value. Consequently, the net amount at risk is always equal to the death benefit of the policy.

Optional Modes of Settlement

The different options from which the beneficiary can choose to receive the proceeds from a Life Insurance Policy. (LI)

Ordinary Agency

A Life Insurance agency handling only Ordinary Life. Life insurance usually issued in amounts of $1,000 or more with premiums payable on an annual, semi-annual, quarterly or monthly basis.

Ordinary Life

Permanent insurance that provides for the payment of proceeds at death or at policy maturity (if the insured is still living at that time). Also known as Whole Life Insurance.

Ordinary Life Insurance

Life insurance usually issued in amounts of $1,000 or more with premiums payable on an annual, semi-annual, quarterly or monthly basis.

Ordinary Life Policy

A Whole Life policy for which premiums are paid continuously as long as the insured lives. Same as Straight Life Policy. Life insurance that remains in force during the insured’s entire lifetime, provided premiums are paid as specified in the policy. Whole life insurance also builds a savings element (called the cash value).

Ordinary Register

The record book in a combination insurer or agency containing data on the ordinary policies in an agent's account. (LI)

Original age conversion

The conversion of a term life insurance policy to a whole life policy at a premium rate based on the age of the insured at the time the term policy was purchased.

Other Insured Rider

Rider which provides coverage to an eligible business or family member other than the insured.

Overhead Expense Insurance

Insurance for business owners to help offset continuing business expenses if the owner is disabled

Overriding Commission

Commission payable in addition to the original commission.

Ownership

All rights, benefits and privileges under life insurance policies are controlled by their owners. Policy owners may or may not be the insureds. Ownership may be assigned or transferred by written request of the current owner. (LI)

Ownership Provision

A provision that a policy may be owned by someone other than the insured. (LI)