PACKAGE POLICY - A single insurance policy that combines several coverages previously sold separately. Examples include homeowners insurance and commercial multiple peril insurance.
PAID-UP ADDITIONAL INSURANCE OPTION* - An option, available to the owners of participating life insurance policies, that allows the policy owner to use policy dividends to purchase additional insurance on the insured‘s life; the paid-up additional insurance is issued on the same plan as the basic policy and in whatever face amount the dividend can provide at the insured‘s attained age. (See Dividend, Participating policy, Policy dividend options )
PAID-UP POLICY* - An insurance policy that requires no further premium payments but continues to provide coverage.
PARTIAL DISABILITY* - See Residual disability
PAY-AT-THE-PUMP - A system proposed in the 1990s in which auto insurance premiums would be paid to state governments through a per-gallon surcharge on gasoline.
PAYOUT OPTIONS* - The methods available to an annuity contract owner for the distribution of the annuity‘s accumulated value. (1) The lump sum distribution method allows the contract owner to receive the balance of his account in a single payment. (2) The fixed period option provides that the annuity‘s accumulated value will be paid out over a specified period of time. (3) The fixedamount option provides that the annuity‘s accumulated value will be paid out in a pre-selected payment amount until the accumulated value is exhausted. (4) A life annuity option provides that periodic income payments will be tied in some manner to the life expectancy of a named individual. (See Life annuity )
PENSION BENEFIT GUARANTY CORPORATION - An independent federal government agency that administers the Pension Plan Termination Insurance program to ensure that vested benefits of employees whose pension plans are being terminated are paid when they come due. Only defined benefit plans are covered. Benefits are paid up to certain limits.
PENSIONS - Programs to provide employees with retirement income after they meet minimum age and service requirements. Life insurers hold some of these funds. Since the 1970s responsibility for funding retirement has increasingly shifted from employers (defined benefit plans that promise workers a specific retirement income) to employees (defined contribution plans financed by employees that may or may not be matched by employer contributions). (See Defined benefit plan, Defined contribution plan )
PER CAPITA BENEFICIARY DESIGNATION* - A type of life insurance policy beneficiary designation in which the life insurance benefits are divided equally among the designated beneficiaries who survive the insured. For example, if the policy specifies two beneficiaries, but only one is surviving at the time of the insured‘s death, then the remaining beneficiary receives the entire policy benefit. Contrast with per stirpes beneficiary designation.
PER STIRPES BENEFICIARY DESIGNATION* - A type of life insurance policy beneficiary designation in which the life insurance benefits are divided among a class of beneficiaries; for example, children of the insured. The living members of the class and the descendants of any deceased members of the class share in the benefits equally. Contrast with per capita beneficiary designation.
PERIL - A specific risk or cause of loss covered by an insurance policy, such as a fire, windstorm, flood, or theft. A named-peril policy covers the policyholder only for the risks named in the policy in contrast to an all-risk policy, which covers all causes of loss except those specifically excluded.
PERSONAL ARTICLES FLOATER - A policy or an addition to a policy used to cover personal valuables, like jewelry or furs.
PERSONAL INJURY PROTECTION COVERAGE / PIP - Portion of an auto insurance policy that covers the treatment of injuries to the driver and passengers of the policyholder‘s car.
POINT-OF-SERVICE PLAN - Health insurance policy that allows the employee to choose between in-network and out-of-network care each time medical treatment is needed.
POLICY - A written contract for insurance between an insurance company and policyholder stating details of coverage.
POLITICAL RISK INSURANCE - Coverage for businesses operating abroad against loss due to political upheaval such as war, revolution, or confiscation of property.
POLLUTION INSURANCE - Policies that cover property loss and liability arising from pollution-related damages, for sites that have been inspected and found uncontaminated. It is usually written on a claims-made basis so policies pay only claims presented during the term of the policy or within a specified time frame after the policy expires. (See Claims-made policy )
POOL - See Insurance pool
PRE-EXISTING CONDITION* - (1) According to most group health insurance policies, a condition for which an individual received medical care during the three months immediately prior to the effective date of her coverage. (2) According to most individual health insurance policies, an injury that occurred or a sickness that first appeared or manifested itself within a specified period
PREFERRED PROVIDER ORGANIZATION - Network of medical providers which charge on a fee-for-service basis, but are paid on a negotiated, discounted fee schedule.
PREFERRED RISK CLASS* - In insurance underwriting, the group of proposed insureds who represent a significantly lower than average likelihood of loss within the context of the insurer‘s underwriting practices. Contrast with declined risk class, standard risk class and substandard risk class.
PREMISES - The particular location of the property or a portion of it as designated in an insurance policy.
PREMIUM TAX - A state tax on premiums paid by its residents and businesses and collected by insurers.
PREMIUMS IN FORCE - The sum of the face amounts, plus dividend additions, of life insurance policies outstanding at a given time.
PREMIUMS WRITTEN - The total premiums on all policies written by an insurer during a specified period of time, regardless of what portions have been earned. Net premiums written are premiums written after reinsurance transactions.
PRIMARY COMPANY - In a reinsurance transaction, the insurance company that is reinsured.
PRIMARY MARKET - Market for new issue securities where the proceeds go directly to the issuer.
PRIME RATE - Interest rate that banks charge to their most creditworthy customers. Banks set this rate according to their cost of funds and market forces.
PRIOR APPROVAL STATES - States where insurance companies must file proposed rate changes with state regulators, and gain approval before they can go into effect.