F – Glossary of Terms

ALPHABETICAL LISTING 

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Face:
The first page of a life insurance contract.

Face Amount:
An amount stated on the face that will be paid in case of death or at the maturity of the policy.

Factory Mutual:
A mutual insurance company insuring only properties that meet high underwriting standards.

Facultative Reinsurance:
Type of reinsurance in which the reinsurer can accept or reject any risk presented by an insurance company seeking reinsurance.

Fair Rental Value:
An amount payable to an insured homeowner for loss of rental income due to damage that makes the premises uninhabitable.

Family Expense Policy:
A policy which insures the medical expenses of both the policyholder and immediate dependents.

Family Income Policy:
A insurance policy that pays an income up to a specific period of time to the beneficiary after the death of the insured.

Family Policy:
A life insurance policy providing insurance on all or several family members in one contract, generally whole life insurance on the principal breadwinner and smaller amounts of term insurance on the other spouse and children.

Farmowners-Ranchowners Policy:
A package policy for a farm or a ranch, providing property and liability coverage’s.

Federal Crop Insurance:
A comprehensive coverage at rates subsidized by the federal government for unavoidable crop losses.

Federal Flood Insurance:
A type or insurance sold by private insurers (with rates subsidized by the federal government) to persons who reside in flood zones and whose community joins the program and agrees to establish and enforce flood control and land-use measures.

Fidelity Bond:
A bond that will reimburse an employer for losses caused by dishonest or fraudulent acts of employees.

Fiduciary:
A person who holding the funds or property of another in trust.

Financial Responsibility Law:
A state law which may require motorists to furnish evidence, either before or after involvement in an auto accident of ability to pay for damages up to certain minimum dollar limits.

Fire:
Combustion accompanied by a flame or glow, which escapes normal confines to cause damage.

First Dollar Defense:
The deductible is loss only and claim expenses will not be applied against the deductible. The firm would only pay their deductible when an indemnity payment is awarded to the claimant.

Fire Legal Liability:
Liability of a business or a person for damage caused by negligence to property of others.

First Party Insurance:
Insurance coverage which the policyholder collects compensation for losses from the insured’s own insurer.

Fixed Annuity:
Annuity whose periodic payment is a guaranteed fixed amount.

Fixed Period Installments:
Life insurance settlement option in which the policy proceeds are paid out in fixed amounts.

Floater:
An insurance policy that covers property that can be moved from one location to another for both transportation perils and perils affecting property at a fixed location.

Flood Insurance:
Coverage against loss resulting from rising water.

Forfeitures:
Amounts contributed on behalf of terminated, non-vested participants.

401(k) Plan:
A salary reduction plan that allows employees to contribute a portion of their salaries on a tax-deferred basis.

Franchise Deductible:
Deductible in which the insurer has no liability if the loss is under a certain amount, but once this amount is exceeded, the entire loss is paid in full.

Franchise Insurance:
A type of insurance in which individual polices are issued to the employees of a common employer or the members of an association.

Fraternal Insurance:
Insurance offered to a social organizations for their members.

Fund:
Money held in trust to pay pension benefits.

Future Increase Option:
An option that allows the insured to purchase additional disability income insurance at a specified future date without evidence of insurability.

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