Glossary

Fully insured status describes the highest covered status under the Social Security benefits under the Old Age, Survivors, Disability, and Health Insurance (OASDHI) Act, entitling the worker to all types of benefits, including retirement. Before a worker can collect Social Security benefits under the OASDHI Act, they must have credit for a certain amount of covered work. Fully insured status is typically reached after 10 years of employment in a covered occupation.

A fully paid policy is a life insurance policy on which all of the premiums necessary to obtain the benefits have been paid.

Full coverage is any form of insurance that provides for payment in full (e.g., without a deductible or coinsurance limitation) of all losses caused by the perils insured against.

Full preliminary term reserve valuation refers to a technique in reserving for life insurance in which no reserve is required for the first year of the life of the contract, with this difference being made up over the contract's duration. This is to minimize the heavy first-year expenses in writing life insurance.

Full prior acts coverage is a type of claims-made liability policy that does not contain a retroactive date and, therefore, covers claims arising from acts that took place at any time prior to the inception date of the policy—regardless of how far in the past. For example, assume that an insured has a claims-made policy that includes a January 1, 2030, retroactive date and a January 1, 2034–35, term. If a claim is made against the insured on July 1, 2034, and the claim arose from a wrongful act that took place on January 1, 1928, there would be no coverage under the policy. This is because the wrongful act took place prior to the January 1, 2030, retroactive date. Now assume that another insured has a policy written with the same January 1, 2034–35, policy term, but the policy contains no retroactive date. If a claim were made against the insured on July 1, 2034, from a wrongful act that took place on January 1, 1928, coverage would apply because the absence of a retroactive date means that, regardless of how far in the past a wrongful act giving rise to a claim took place, the claim will be covered (as long as it is made against the insured during the policy period). Full prior acts coverage is most likely to be granted when an applicant already has coverage in place at the time it submits an application. On the other hand, underwriters generally do not provide full prior acts coverage to insureds that have not previously purchased liability insurance. This is because underwriters sometimes believe that an applicant's desire to buy coverage at this juncture may be motivated by the applicant's intention to report a claim under the new policy.

Functional capacity evaluation is a series of tests conducted by a physical or occupational therapist to gain a better quantification of an individual's ability to perform physically in the work environment. Normally administered in 4 to 8 hours over a 1- to 2-day period, the test is composed of 26 to 29 different movements that help the practitioner gauge the worker's ability to function at work by establishing a baseline. This evaluation is commonly used in return-to-work programs.

A functional job description is a written document that provides detailed information about the physical requirements of a specific job in the workplace. The job description should include precise measurements of physical demands and classification of each job function as essential or nonessential.

Functional replacement cost is the cost of acquiring another item of property that will perform the same function with equal efficiency, even if it is not identical to the property being replaced.

A functional replacement cost provision or endorsement changes the valuation basis otherwise applicable (actual cash value (ACV) or replacement cost (RC) value) to valuation at the cost to replace the damaged or destroyed property with property that serves the same function. Used when replacement of damaged property with substantially identical property is either impossible (perhaps due to technological change) or unnecessary.

A fundamental risk is intrinsic to the state of being or an absolute hazard producing no uncertainty about whether the loss will occur, making the risk commercially uninsurable.