Glossary

Guaranteed auto protection is insurance covering the difference between the actual cash value (ACV) of a damaged or stolen vehicle and the amount owed on the car under a loan or lease.

Guaranteed cost are premiums charged on a prospective basis without adjustment for loss experience during the policy period.

Guaranteed cost insurance is any insurance for which the insured pays a fixed premium (or a fixed rate that is applied to an exposure base) for the policy term, regardless of the number and amount of losses that occur during the policy term.

The guaranteed cost premium is a premium that is determined prospectively, locking in the cost for the policy period regardless of the loss experience.

Guaranteed insurability is an optional feature in life and health insurance that guarantees the insured the right to purchase additional insurance without undergoing a medical examination or otherwise providing evidence of good health.

A guaranteed investment contract is a funding arrangement most often used with profit sharing and savings and thrift plans in which the insurer guarantees the principal and interest rate, assuming that the contract is held to maturity.

Guaranteed issue refers to the right to purchase life or health insurance regardless of an individual's health, age, gender, or other factors that might predict the use of health services or life span.

Guaranteed renewable refers to a provision in a life or disability policy that requires the insurer to renew the policy on its anniversary.

Guaranteed replacement cost is a property insurance valuation option found in some homeowners policies.

A guaranty agreement is a two-party contract in which the first party agrees to perform a stipulated action in the event that a second party fails to perform.