Glossary
Insurance Terms Glossary
This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. New terms will be added to the glossary over time.
The definitions in this glossary are developed by the NAIC Research and Actuarial Department staff based on various insurance references. These definitions represent a common or general use of the term. Some words and/or phrases may be defined differently by other entities, or used in a context such that the definition shown may not be applicable.
Terms beginning with F
- Face Amount
- – death, or maturity, benefit of a life insurance policy.
- Facultative Reinsurance
- – reinsurance of individual risks.
- Fair Credit Reporting Act
- – a federal law requiring insurers to advise applicants of any adverse actions related to a credit report.
- Federal Employees Health Benefits Plan (FEHBP)
- – the plan for health benefits coverage made available under the Federal Employees Health Benefits Program.
- Federal Flood Coverage
- – coverage sold under the National Flood Insurance Act of which the expense is either borne by the Federal government or which risk is reinsured using the full faith and credit of the Federal government.
- Fee-For-Service
- – a traditional health provider payment arrangement where the payment is made following the provision of a service.
- Fiduciary
- – a person appointed to care for another person's assets, acting with good faith, undivided loyalty, and due care for the other person. A trustee, conservator, or an agent acting under a power of attorney is an example of a fiduciary.
- Fidelity Bond
- – bond providing protection for the insured against losses due to theft or embezzlement of funds by employees.
- Financial Guaranty
- – a guarantee that the principal and interest on a bond or other debt security will be paid on time in the event that the issuer defaults.
- Fire Insurance
- – coverage for losses caused by fire or lightning insuring real or personal property.
- First-Party Coverage
- – insurance that pays the policyholder as a result of a loss.
- Fixed Annuity
- – annuity with guaranteed interest rate.
- Fixed-period Annuity
- – annuity providing benefits for a specified time.
- Flood Insurance
- – insurance coverage for losses caused by flood.
- Formulary
- – a list of preferred, commonly prescribed prescription drugs by health care providers. These drug lists are developed by insurance companies.
- Fraternal Benefit Society
- – a nonprofit corporation organized for the benefit of its members and their beneficiaries which provides insurance benefits on a group basis based upon the qualifications of its members. Examples of fraternals include religious organizations and labor unions.
- Fraud
- – the crime of using dishonest methods to take something of value from another person.
- Functional Replacement Cost Coverage
- – policy provision providing replacement cost coverage equivalent to the property damaged or destroyed.
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