Insurance Terms Dictionary--E

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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--E

		Early Retirement: Retirement of a participant prior to the normal retirement date, usually with a reduced amount of annuity. Early retirement is generally allowed at any time during a period of 5 to 10 years preceding the normal retirement date.
		Earned Income: Employment income derived from salary, wages, commissions, or fees.
		Earned Premium: The portion of a premium which is the property of an insurance company, based on the expired portion of the policy period. For example, an insurance company is considered to have earned 75 percent of an annual premium after a period of nine months of an annual policy has elapsed.
		Earnings Test (Retirement Test): Determination of the amount of Social Security benefits payable to a beneficiary after adjusting for earnings.
		Economic Loss: The estimated total cost, both insured and uninsured, of mishaps (such as motor vehicle accidents, work accidents, and fires); includes such factors as property damage, funeral expenses, wage loss, insurance administration costs, and medical, hospital and legal costs.
		Economic Policy: Special type of participating Whole Life Insurance in which the dividends are used to buy Term Insurance or paid-up additions equal to the difference between the face amount of the policy and some guaranteed amount.
		Effective Date: The date on which the insurance under a policy begins.
		Elements of a Negligent Act: Four elements an injured person must show to prove negligence: existence of a legal duty to use reasonable care, failure to perform that duty, damages or injury to the claimant, and proximate cause relationship between the negligent act and the infliction of damages.
		Eligibility Date: The date on which an individual member of a specified group becomes eligible to apply for insurance under an (group Life or Health) insurance plan.
		Eligibility Period: A specified length of time, such as one month, following the eligibility date during which an individual member of a particular group will remain eligible to apply for insurance under a group Life or Health Insurance policy without evidence of insurability.
		Eligibility Requirements: For retirement plans, (1) The conditions which an employee must satisfy to participate in a retirement plan, for instance completion of 1 to 3 years of service with the employer, the attainment of a specified age, such as 25, or (2) Conditions which an employee must satisfy to obtain a retirement benefit, such as the completion of 15 years of service and the attainment of age 65.
		Eligible Employees: Those members of a group who have met the eligibility requirements under a group Life or Health Insurance plan.
		Elimination Period: A period of time between the period of disability and the start of Disability Income Insurance benefits, during which no benefits are payable. The elimination period may be as short as a few days or as long as one year or more. (See Waiting Period.)
		Embezzlement: Fraudulent use or taking of another's property or money which has been entrusted to one's care.
		Employee Benefit Plan Insurance: Coverage designed to protect the employer against claims by employees or former employees resulting from negligent acts or omissions in the administration of the Insured's employee benefits programs. Coverage is intended to extend to the administration of these plans, including counseling employees, interpreting employee benefits programs, handling records, enrolling, terminating or cancelling employees in specified plans on a timely basis, etc.
		Employee Benefit Programs: Programs designed to benefit employees, arranged by the employer, which are not paid for primarily or directly by the employee, including for instance group Life Insurance and group Accident and/or Health Insurance; profit sharing plans; employee stock subscription plans; Workers' Compensation; Unemployment Insurance; Social Security benefits; disability benefits, etc.
		Employee Dishonesty Insurance: Coverage designed to protect an employer from financial loss due to the fraudulent activities of one or more employees. The coverage includes protection for loss of money, securities, and other property of the Insured. Some scheduled policies are still available, but the majority are written on a blanket basis. This provides coverage for all employees, subject to the policy definitions. The limit of liability is "per loss" and is applied on an occurrence basis. All acts involving the same employee or group of employees is considered one occurrence. [MORE]
		Employee Dishonesty Coverage Form: Commercial Crime Insurance form drafted by the Insurance Services Office that covers the loss of money, securities, and other covered property because of any dishonest act of a covered employee or employees.
		Employee Retirement Income Security Act (ERISA): Legislation passed in 1974 applying to most private pension and welfare plans that requires certain minimum standards to protect participating employees.
		Employment Practices Liability Insurance: Coverage designed to protect the corporation, directors & officers and employees for claims resulting from wrongful termination, discrimination, sexual harassment, wrongful discipline and failure to employ or promote.
		Employment Stock Ownership Plan (ESOP): A defined contribution pension plan which is designed to invest primarily in securities of the employer, such as common stock and debentures.
		Endorsements: An additional piece of paper, not a part of the original contract, which cites certain terms and which, when attached to the original contract, becomes a legal part of that contract. See Rider.
		Endowment: Life Insurance payable to the policyholder if living, on the maturity date stated in the policy, or to a beneficiary if the Insured dies prior to that date.
		Enrolled Actuary: A person who performs actuarial service for a plan and who is enrolled with the Federal Joint Board for the Enrollment of Actuaries.
		Enrollment Card: A document signed by an employee as notice of his/her desire to participate in the benefits of a Group Insurance plan.
		Entire Contract Clause: Provision in Life Insurance policies stating that the policy and attached application constitute the entire contract between the parties.
		Entity Purchase Agreement: The terms for the business to buy back a deceased's share of the business's ownership.
		Environmental Damage: The injurious presence in or on land, the atmosphere, or any water course or body of water of solid, liquid, gaseous, or thermal contaminants, irritants, or pollutants.
		Environmental Impairment Liability Insurance: Coverage designed to cover losses and liabilities arising from damage to property by pollution.
		Equities: Investments in the form of ownership of property, usually common stocks, as distinguished from fixed income bearing securities, such as bonds or mortgages.
		Equity in the Unearned Premium Reserve: Amount by which an unearned premium reserve is overstated because it is established on the basis of gross premium rather than net premium.
		ERISA: See Employee Retirement Income Security Act.
		Errors and Omissions Insurance: Coverage designed to protect an Insured against loss due to a claim of some negligent act, error, or omission by the Insured. [MORE]
		Estate: The assets and liabilities of a person left at death.
		Estate Planning: The process of developing a plan to transfer property from one generation to the next, or within a generation (e.g., from husband to wife).
		Estoppel: Legal doctrine that prevents a person from denying the truth of a previous representation of fact, especially when such representation has been relied on by the one to whom the statement was made.
		Evidence of Insurability: Any statement of proof of a person's physical condition and/or other factual information affecting his/her acceptance for insurance.
		Excess and Surplus Insurance: (1) Coverage designed to protect against losses above a certain amount, with losses below that amount usually covered by a regular policy. (2) Insurance for a risk for which coverage is unavailable in the normal market. Such risks are frequently unusual, e.g., damage to a musician's hands or the multiple perils of a convention. (See also Umbrella Liability and Surplus Lines.)
		Exclusions: Specific conditions or circumstances listed in the policy for which the policy will not provide benefit payments.
		Exclusive Agent: An agent who is employed by one and only one insurance company and who solicits business exclusively for that company.
		Exclusive Remedy Doctrine: Doctrine in Workers Compensation Insurance which states that Workers Compensation benefits should be the exclusive or sole source of recovery for workers who have a job-related accident or disease. The doctrine has been eroded by legal decisions.
		Exclusion or Exception: Specified conditions or circumstances, listed in the policy, for which the policy will not provide benefits.
		Exclusion ratio: The portion of an annuity payment, considered by tax law to be a return of your initial investment, that is not subject to income tax when received.
		Exclusive Provider Organization (EPO): People who belong to an EPO must receive their care from affiliated providers; services rendered by unaffiliated providers are not reimbursed. See also: Health Maintenance Organization.
		Expense Loading: See Loading.
		Expense Ratio: The ratio of a company's operating expenses including acquisition costs to premiums written or earned.
		Experience: A term used to describe the relationship, usually expressed as a percent or ratio, of premium to claims for a plan, coverage, or benefits for a stated time period.
		Experience Modification Factor: Used in Workers Compensation rating to reflect the degree to which a particular employer has experience that is better or worse than expected for that industry. Weighted by employer's credibility factor.
		Experience Rating: The process of determining the premium rate for a group risk, wholly or partially on the basis of that group's experience.
		Experience Refund: A provision in most group policies for the return of premium to the policyholder because of lower than anticipated claims.
		Explosion: A violent expansion, with force and noise, generally due to rapid chemical change; term covered under various Property/Casualty Insurance policies.
		Exposure Unit: Unit of measurement used in insurance pricing.
		Extended Coverage Insurance: Protection for the Insured against property damage caused by windstorm, hail, smoke, explosion, riot, riot attending a strike, civil commotion, vehicle and aircraft. This is provided in conjunction with the Fire Insurance policy and the various Package Policies.
		Extended Nonowned Coverage: Endorsement that can be added to an Automobile Liability Insurance policy that covers the Insured while driving any non-owned automobile on a regular basis.
		Extended Reporting Period: An additional period of time after policy expiration during which valid claims will be paid under a claims-made policy of Liability Insurance
		Extended Reporting Period Endorsement: Added to a claims-made policy of Liability Insurance to provide an additional period of time during which valid claims will be paid
		Extended Term Insurance: A form of insurance available as a non-forfeiture option. It provides the original amount of insurance for a limited period of time.
		Extended Unemployment Insurance Benefits: Additional cash benefits paid by federal-state Unemployment Insurance programs to workers who are involuntarily unemployed and who have exhausted their regular weekly cash benefits during periods of high unemployment.
		Extra Expense Insurance: Type of Business Income Insurance that covers the extra expenses incurred to continue operations after a loss has occurred.

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