Insurance Terms Explained

TERMS TO KNOW Adverse selection — insuring of risks that are more prone to losses than the

average risk Agent/Producer — a legal representative of an insurance company; the classification

of producer usually includes agents and brokers; agents are the agents of the insurer

Applicant or proposed insured — a person applying for insurance Beneficiary — a person who receives

the benefits of an insurance policy Death benefit — the amount paid upon the death of

the insured in a life insurance policy Fraud — intentional misrepresentation or deceit with the

intent to induce a person to part with something of value Insurance policy

— a contract between a policyowner (and/or insured) and an insurance company which agrees to