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Cash Refund Annuity
A type of annuity policy which guarantees that, should an annuitant die before receiving payments equal to the amount paid to establish the annuity, the difference will be refunded to the beneficiary in a lump sum.

Cash Value
The amount payable to the owner of a whole life or endowment policy on surrender of the policy to the company prior to the time the policy becomes a death claim or a matured endowment.

A statement issued to the individuals insured under a group insurance policy, setting forth the essential provisions relating to their insurance coverage.

Certificate of Insurance
A statement of coverage issued to an individual insured under a group insurance contract, outlining the insurance benefits and principal provisions applicable to the member.

Claims Expenses Inside/Outside the Limit - Professional Liability Insurance
The Professional Liability Insurance Program offers claim expenses both inside the limits of liability (known as CEIL) as well as claim expenses outside the limits (known as CEOL). When a valid claim is made, certain costs, referred to as claim expenses, begin to accrue. Claim expenses include attorneys' fees, court costs, and all other charges incurred by the insurer in defending a claim.

If your professional liability policy has CEIL, all claim expenses are deducted first from the liability limit and the balance is available for settling a judgment. For example, if you have a $1 million liability limit and your claim expenses total $400,000, there is $600,000 available to pay damages.

You can elect to have a CEOL endorsement on your policy.* For a small additional fee, you are provided with a separate but equal limit of liability for claim expenses. Using the same example as above, on a $1 million liability limit, the full $1 million is available for payment of damages, and there is an additional $1 million available for expenses related to the claim. Purchasing the CEOL option when you arrange for your insurance results in additional protection if a claim is filed against you.

* Certain states require mandatory CEOL coverage.

Claims-made Coverage - Professional Liability Insurance
All of the accountants professional liability insurance policies offered in the AICPA Program today are written on a claims-made basis. Claims-made means the incident that led to the claim must have happened on or after the effective date of a policy (which could include a period of time prior to the policy inception date -- see "Prior Acts Coverage") and the claim must be first made and reported while the policy is in force. It is this second requirement, the making of claims while the policy is in force, that differentiates claims-made policies from other types of policies you may purchase.

The requirement that a claim be made and reported during a period that the policy is in force necessitates the maintenance of continuous coverage once established. If a claims-made policy is not in force when a claim is made, no coverage will be available. By maintaining continuous coverage, you ensure that services performed under previous policies' periods will be covered should a claim be made and reported.

Comprehensive Major Medical Insurance
A policy designed to give the protection offered by both a basic and a major medical health insurance policy. It is characterized by a low deductible amount, a coinsurance feature and high maximum benefits.

One of the elements for a binding contract, i.e., the cause, motive, price, or impelling influence which induces a contracting party to enter into a contract. In terms of insurance policies, consideration is acceptance by the insurance company of the payment of the premium and the statement made by the prospective policyholder in the application.

Contingent Beneficiary
The person designated under a life insurance contract to receive the proceeds payable on the death of the insured if there is no primary beneficiary living at the insured's death. Sometimes referred to as the "secondary beneficiary".

A group insurance plan issued to an employer under which both the employer and employee contribute to the cost of the plan. Seventy-five percent of the eligible employees must be insured.

Coordination of Benefits (COB)
The specific term used to designate the anti-duplication provision designed by the group health insurance industry through the Health Insurance Association of America (HIAA) to limit benefits for multiple group health insurance in a particular case to 100% of the expense covered and to designate the order in which the multiple carriers are to pay benefits.

This information should not be construed as legal advice or a legal opinion on any factual situation. This summary is for illustrative purposes and is not a contract. It is intended to provide a general overview, at the time first posted, of the topics described. Only the insurance policy can give actual terms, conditions and exclusions.