Insurance Terms Dictionary--D

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For informational purposes only. Refer to your policy or ask your agent for the exact definition of any term defined in your policy.
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David G. Sayles Insurance Services
Insurance Terms--D

		Damage to Property of Others: Coverage for an Insured who damages another's property. Payment is made despite the lack of legal liability. Coverage is included in Section II of the Homeowners Policy.
		Death Benefit: A payment made to a designated beneficiary upon the death of the employee annuitant.
		Debenture: A bond that is backed only by the general credit of the issuing corporation. No specific property is pledged as security behind the loan.
		Debit Insurance: See Industrial Life Insurance.
		Debris Removal Clause: This clause extends insurance coverage to include the cost of debris removal resulting from damage caused by a covered loss up to a specified limit of loss. The clause is an additional Property Insurance coverage.
		Declarations: Statements in an insurance contract that provide information about the property or life to be insured and used for underwriting and rating purposes and identification of the property or life to be insured.
		Declination: The insurer's refusal to insure an individual after evaluation of the application for insurance and any other pertinent factors.
		Deductible: An amount which a policyholder agrees to pay, per claim or per accident, toward the total amount of an insured loss.
		Deferred Annuity: An annuity providing for the income payments to begin at some specified future date.
		Deferred Compensation: Arrangements by which compensation to employees for past or current services is postponed until some future date.
		Deferred Group Annuity: A type of group annuity providing for the purchase each year of a paid-up deferred annuity for each member of the group, the total amount received by the member at retirement being the sum of these deferred annuities.
		Defined Benefit Plan: A pension plan stating either (1) the benefits to be received by employees after retirement or (2) the method of determining such benefits. The employer's contributions under such a plan are actuarially determined.
		Defined Contribution Plan: A plan under which the contribution rate is fixed and benefits to be received by employees after retirement depend to some extent upon the contributions and their earnings.
		Dental Insurance: Individual or group plan that helps pay costs of normal dental care as well as damage to teeth from an accident.
		Dependency Period: Period of time following the readjustment period during which the surviving spouse's children are under eighteen and therefore dependent of the parent.
		Dependent Benefits: Social Security benefits available to the spouse or children of a Social Security beneficiary.
		Deposit Administration Group Annuity: A type of group annuity providing for the accumulation of contributions in an undivided fund out of which annuities are purchased as the individual members of the group retire.
		Deposit Premium: The money paid by a prospective policy holder when an application is made for an insurance policy. It is usually equal, at least, to the first month's estimate premium and is applied toward the actual premium when billed.
		Deposit Term Insurance: A form of Term Insurance, not really involving a "deposit," in which the first-year premium is larger than subsequent premiums. Typically, a partial endowment is paid at the end of the term period. In many cases the partial endowment can be applied toward the purchase of a new Term Policy, or, perhaps, a Whole Life Policy.
		Depreciation: A decrease in the value of property over a period of time due to wear and tear or obsolescence. Depreciation is used to determine the actual cash value of property at time of loss. (See Actual Cash Value)
		Diagnosis-Related Groups (DRGs): System that reimburses health care providers fixed amounts for all care given in connection with standard diagnostic categories.
		Difference in Conditions Insurance (DIC): All-Risks Policy that covers other perils not insured by basic Property Insurance contracts, supplemental to and excluding the coverage provided by underlying contracts. DIC insurance provides coverage designed to close specific gaps in standard insurance policies and is usually available only for larger industrial or commercial risks. It allows coverage to be customized to extend to such exposures as water damage, flood, collapse, earthquake, landslide, etc., according to the Insured's needs. DIC coverage may be provided by means of a separate insurance policy or it may be added by endorsement to the basic policy.
		Direct Loss: Financial loss that results directly from an insured peril.
		Direct Placement: Sale of an entire issue of bonds or stock by the issuer to one or a few large institutional customers such as an insurance company without trying to market the issue publicly.
		Direct Premiums Written: Property and Casualty Insurance premiums written (less return premiums) without any allowance for premiums for assumed or ceded reinsurance.
		Direct Response System: A marketing method where insurance is sold without the services of an agent. Potential customers are solicited by advertising in the mail, newspapers, magazines, television, radio and other media.
		Direct Writer: The industry term for a company which uses its own sales employees to write its policies. Sometimes refers to companies which contract with exclusive agents.
		Directors' and Officers' Liability: The exposure of corporate managers to claims from shareholders, government agencies, and employees, and others alleging mismanagement. [MORE ON D&O INSURANCE]
		Disability: A physical or a mental impairment that substantially limits one or more major life activities of an individual. It may be partial or total. (See Partial Disability; Total Disability.)
		Disability Benefit: Periodic payments, usually monthly, payable to participants under some retirement plans, if such participants are eligible for the benefits and become totally and permanently disabled prior to the normal retirement date.
		Disability Benefit: A feature added to some life insurance policies providing for waiver of premium, and sometimes payment of monthly income, if the policy holder becomes totally and permanently disabled.
		Disability Income Insurance: A form of Health Insurance that provides periodic payments to replace income when an insured person is unable to work as a result of illness, injury, or disease.
		Disability Insured: Status of an individual who is insured for disability benefits under the Old-Age, Survivors, and Disability Insurance (OASDI) program. The covered person must be fully insured and have at least twenty quarters of coverage out of the last forty, ending with the quarter in which the disability occurs. Fewer quarters are required for persons under age thirty.
		Disappearing Deductible: Deductible in an insurance contract that provides for a decreasing deductible amount as the size of the loss increases, so that small claims are not paid but large losses are paid in full.
		Dismemberment: Loss of body members (limbs), or use thereof, or loss of sight due to injury.
		Dismemberment Insurance: A form of Health Insurance that provides payment in case of loss by bodily injury of one or more body members (such as hands or feet) or the sight of one or both eyes.
		Disposable Personal Income: Personal income less personal tax and basic non-tax payments. It is the income available to people for discretionary spending and saving.
		Dividend: (1) A return of part of the premium on participating insurance to reflect he difference between the premium charged and the combination of actual mortality, expense and investment experience. Such premiums are calculated to provide some margin over the anticipated cost of the insurance protection. (2) In capital stock companies, a share of the profits distributed to stockholders.
		Dividend Addition: An amount of paid-up insurance purchased with a policy dividend and added to the face amount of the policy.
		Dollar Threshold: In no-fault Auto Insurance states with the dollar threshold, it prevents individuals from suing in tort to recover for pain and suffering unless their medical expenses exceed a certain dollar amount.
		Domestic Insurer: An insurance company is a domestic company in the state in which it is incorporated. See also Foreign Insurer, Alien Insurer.
		Donor: The person making a gift.
		Double Indemnity: A policy provision usually associated with death, which doubles payment of a designated benefit when certain kinds of accidents occur.
		Dramshop Law: Law that imputes negligence to the owner of a business that sells liquor in the case that an intoxicated customer causes injury or property damage to another person. Usually excluded from General Liability Policies.
		Dread Disease Insurance: Insurance providing an unallocated benefit, subject to a maximum amount, for expenses incurred in connection with the treatment of specified diseases, such as cancer, poliomyelitis, encephalitis and spinal meningitis.
		Driver Education Credit: Student discount or reduction in premium amount for which young drivers become eligible on completion of a driver education course.
		Duplication of Benefits: Overlapping or identical coverage of the same Insured under two or more health plans, usually the result of contracts of different insurance companies, service organizations, or pre-payment plans; also known as multiple coverage.
		Dwelling Property 1: Property Insurance policy that insures the dwelling at actual cash value, other structures, personal property, fair rental value, and certain other coverages. Covers a limited number of perils.
		Dwelling Property 2: Property Insurance policy that insures the dwelling and other structures at replacement cost. It adds additional coverages and has a greater list of covered perils than the Dwelling Property 1 policy.
		Dwelling Property 3: Property Insurance policy that covers the dwelling and other structures against direct physical loss from any peril except for those perils otherwise excluded. However, personal property is covered on a named-perils basis.

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