Insurance Handbook - Alaska Department of Community and ...

D
*DEATH BENEFIT
(1) For a life insurance contract, the
amount of money paid by an insurer to a
beneficiary when a person insured under
the life insurance policy dies. (2) For an annuity
contract, the amount of money paid
to a beneficiary if the contract owner dies
before the annuity payments begin.
DECLARATION
Part of a property or liability insurance
policy that states the name and address of
policyholder, property insured, its location
and description, the policy period,
premiums and supplemental information.
Referred to as the “dec page.”
*DECLINED RISK CLASS
In insurance underwriting, the group of
proposed insureds whose impairments or
anticipated extra mortality are so great
that an insurer cannot provide insurance
coverage to them at an affordable cost. Also
known as uninsurable class. Contrast with
Preferred risk class, Standard risk class and
Substandard risk class.
*DECREASING TERM
LIFE INSURANCE
Term life insurance that provides a death
benefit that decreases in amount over the
policy term. Contrast with Increasing term
life insurance.
DEDUCTIBLE
The amount of loss paid by the policyholder.
Either a specified dollar amount,
a percentage of the claim amount, or a
specified amount of time that must elapse
before benefits are paid. The bigger the
deductible, the lower the premium charged
for the same coverage.
Glossary
DEFERRED ANNUITY
An annuity contract, also referred to as an
investment annuity, that is purchased either
with a single tax-deferred premium or
with periodic tax-deferred premiums over
time. Payments begin at a predetermined
point in time, such as retirement. Money
contributed to such an annuity is intended
primarily to grow tax-deferred for future
use.
DEFINED BENEFIT PLAN
A retirement plan under which pension
benefits are fixed in advance by a formula
based generally on years of service to the
company multiplied by a specific percentage
of wages, usually average earnings over
that period or highest average earnings
over the final years with the company.
DEFINED CONTRIBUTION PLAN
An employee benefit plan under which the
employer sets up benefit accounts and contributions
are made to it by the employer
and by the employee. The employer usually
matches the employee’s contribution up to
a stated limit.
DEMAND DEPOSIT
Customer assets that are held in a checking
account. Funds can be readily withdrawn
by check, “on demand.”
DEMUTUALIZATION
The conversion of insurance companies
from mutual companies owned by their
policyholders into publicly traded stock
companies.
DEPENDENT LIFE INSURANCE
See Family benefit coverage.
DEPOSITORY INSTITUTION
Financial institutions that obtain their
funds mainly through deposits from the
public. They include commercial banks,
I.I.I. Insurance Handbook www.iii.org/insurancehandbook 91