GLOSSARY Some important terms and some important differences between British and American terminology are listed below. Deductibles A deductible is an amount deducted from the total loss before the claim is paid. In British terminology, this type of arrangement is known as an excess. A deductible is also referred to as a retention in some countries. A franchised deductible is one in which the insurer pays nothing on a claim that is less than the amount of the deductible, but pays the full amount of the claim if it exceeds the deductible. Face amount or Face value The face amount or face value of a policy is the sum assured in British terminology. Insurance American usage of the term "insurance" covers both insurance and assurance in British usage. Permanent insurance Permanent insurance is life insurance with a savings element, such as whole life or endowment insurance. Present value The present value of a benefit or a premium is the amount discounted by a given interest rate after allowing for the risk element in payment. Glossary Policy reserve The policy reserve, or technical reserve, is the present value of the benefit less the present value of outstanding (future) premiums. Allowance is generally made for future expenses also. Term insurance Term insurance is life insurance without a savings element. It is also referred to as temporary insurance. 65 |