Glossary

First dollar coverage is insurance coverage that provides for the payment of all losses up to the specified limit without the application of deductibles.

First dollar defense coverage is a feature of some liability policies in which retentions do not apply to defense costs, even if no indemnity payments are made in conjunction with a claim. Thus, if an insurer were to expend $10,000 on defense of a claim and nothing for indemnity, the insured would not be required to pay any out-of-pocket costs for defense.

First dollar defense, umbrella, is an umbrella or professional liability policy provision under which the insurer agrees to indemnify the insured for costs of claims defense in the self-insured retention (SIR) area.

The first named insured is the person or entity listed first on the policy declarations page as an insured.This primary or first named insured is granted certain rights and responsibilities that do not apply to the policy's other named or additional insureds. This primary or first named insured is granted certain rights and responsibilities that do not apply to the policy's other named insureds. Examples of additional rights of first named insureds are the receipt of cancellation notice and return premiums. Unique responsibilities include the notice of loss requirements and premium payment obligations.

The sharing of risk by a reinsurer with the ceding company on a pro rata basis, excess of a specific retention. The proportion is sometimes fixed and sometimes varied according to different classes of risks and the net retentions that the insurer keeps for its own account.

Fixed-cost insurance is a traditional insurance program where the insured is charged a fixed premium rate. The rate is tied to a measure of exposure, such as payroll or sales, but is not loss sensitive.

The fixed amount option is an option that a life insurance beneficiary may select as a settlement, whereby the policy proceeds are paid through periodic installments of fixed amounts until the principal and interest are exhausted.

A fixed benefit is a benefit from a life or annuity insurance policy that does not vary in amount and is paid on a regular periodic basis.

A fixed period annuity refers to an annuity policy that makes income payments for a limited period of time (e.g., 5 years). Payments cease after the stipulated period or upon the annuitant's death.

The fixed period option is a life insurance option that may be selected as a settlement under which the policy proceeds are left on deposit with the insurer to accrue interest and are paid to the beneficiary in equal payments for a specific number of years.