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 P
- Package Policy
- – two or more distinct policies combined into a single contract.
- Par Value
- – the nominal or face value of a stock or bond.
- Peril
- – the cause of property damage or personal injury, origin of desire for insurance. 'Cause of Loss'
- Permanent Life Insurance
- – policy that remains active for the life of the insured.
- Personal Auto Policy
- – coverage designed to insure private passenger automobiles and certain types of trucks owned by an individual or husband and wife.
- Personal Injury Liability
- – liability coverage for those who have been discriminated against, falsely arrested, illegally detained, libeled, maliciously prosecuted, slandered, suffered from identity theft, mental anguish or alienation of affections, or have had their right of privacy violated.
- Personal Injury Protection Coverage/PIP
- – automobile coverage available in states that have enacted no-fault laws or other auto reparation reform laws for treatment of injuries to the insured and passengers of the insured.
- Pet Insurance Plans
- – veterinary care plan insurance policy providing care for a pet animal of the insured owner in the event of its illness or accident.
- Policy
- – a written contract ratifying the legality of an insurance agreement.
- Policy Dividend
- – a refund of part of the premium on a participating life insurance policy.
- Policy Period
- – time period during which insurance coverage is in effect.
- Policy Reserve
- – the amount of money allocated specifically for the fulfillment of policy obligations by a life insurance company.
- Policyholders Surplus
- – assets in excess of the liabilities of a company or net income above any monies indebted to legal obligation.
- Pool
- – an association organized for the purpose of absorbing losses through a risk-sharing mechanism thereby limiting individual exposures.
- Preferred Provider Organization (PPO)
- – arrangement, insured or uninsured, where contracts are established by Health Plan Companies with health care providers.
- Preferred Risk
- – insured, or applicant for insurance, who presents likelihood of risk lower than that of the standard applicant.
- Premium
- – Money charged for the insurance coverage reflecting expectation of loss.
- Premiums Earned
- – the portion of premium for which the policy protection or coverage has already been given during the now-expired portion of the policy term.
- Premiums Written
- – total premiums generated from all policies (contracts) written by an insurer within a given period of time.
- Primary Insurance
- – coverage that takes precedence when more than one policy covers the same loss.
- Producer
- – an individual who sells, services, or negotiates insurance policies either on behalf of a company or independently.
- Product Liability
- – insurance coverage protecting the manufacturer, distributor, seller, or lessor of a product against legal liability resulting from a defective condition.
- Professional Errors And Omissions Liability
- – coverage available to pay for liability arising out of the performance of professional or business related duties.
- Property
- – coverage protecting the insured against loss or damage to real or personal property from a variety of perils.
- Protection And Indemnity (P&I) Insurance
- – a broad form of marine legal liability insurance coverage.
- Public Adjuster
- – independent claims adjuster representing policyholders instead of insurance companies.
- Pure Premium
- – that portion of the premium equal to expected losses void of insurance company expenses, premium taxes, contingencies, or profit margin.
- Pure Risk
- – circumstance including possibility of loss or no loss but no possibility of gain.
Ready to talk to a verified agent?
Search top insurance agents, financial advisors and Registered Social Security Analysts near you, then choose the best match for your goals.