The Insurance Terms Glossary is divided alphabetically for ease of browsing. Select the alphabet letter that corresponds to the first letter of the word you would like to be informed about to open the appropriate heading.

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Glossary Terms ' G '

GAAP - See Generally Accepted Accounting Principles. GAAP is important in insurance accounting because the states who regulate insurance use STAT accounting which is more conservative.

General Agency System - Type of life insurance marketing system in which the general agent is an independent businessperson who represents only one insurer is in charge of a territory and is responsible for hiring training and motivating new agents. This is different from the Independent Agency System where such agents represent a number of companies.

General Average - In ocean marine insurance a loss incurred for the common good that is shared by all parties to the venture.

General Damages - Damages awarded to an injured person for intangible loss which cannot be measured directly by dollars. Frequently called pain and suffering. General damages are distinguished from special damages which are awarded for actual economic loss such as medical costs loss of income etc.

General Liability Insurance - Coverage that pertains for the most part to claims arising out of the insured's liability for injuries or damage caused by ownership of property manufacturing operations contracting operations sale or distribution of products and the operation of machinery as well as professional services. For small businesses this coverage can be included in the BOP or "Business Owners Policy".

General Partner Liability Insurance - Coverage designed to protect against claims of loss against a general partner for failure to properly exercise his fiduciary duty. Also known as General Partners' Liability and Limited Partnership Reimbursement coverage. A general partner's management and fiduciary responsibilities to a limited partnership closely parallel the director's or officer's to a corporation. Exposure occurs when general partners become the financial managers of a limited partnership. The directors and officers of corporate general partners share this type of exposure.

Generally Accepted Accounting Principles - Principles of accounting and reporting business results developed by the American Institute of Public Accountants. As regards the insurance business this convention varies from Statutory Accounting (State Mandated Accounting) in a number of key areas; asset valuations expense recognition tax treatments are some of the most significant. Generally statutory accounting is more conservative.

Generation Skipping Tax - A transfer tax imposed on gift or inheritance to those at least two generations younger than the person making the transfer

Glass Insurance - Protection for loss of or damage to glass and its appurtenances. Due to the variety of exposures that exist for plate glass windows on store fronts and elsewhere a special insurance product was created.

Good Student Discount - Reduction of automobile premium for a young driver at least sixteen who ranks in the upper 20 percent of his or her class has a B or 3.0 average or is on the Dean's list or honor roll. It is based on the premise that good students are better drivers.

Grace Period - A specified period after a premium payment is due in which the policyholder may make such payment and during which the protection of the policy continues.

Graded Commission Scale - A commission scale providing for payment of a high first-year commission and lower renewal commissions.

Gross Estate - All of the assets and liabilities owned at death.

Gross Negligence - the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another. This is a term of art in the insurance and legal world where damages can be quite severe.

Gross Premium - The premium paid by the policyholder. Gross premium is distinguished from Net premium. Net premium is ususally net of reinsurance costs and policy cancellations and endorsements. Gross premium is the best measure of the size of a policy or an insurance company.

Gross Rate - The sum of the pure premium and a loading element.

Group Annuity - A pension plan providing annuities at retirement to a group of people under a master contract. It is usually issued to an employer for the benefit of employees. The individual members of the group hold certificates as evidence of their annuities.

Group Annuity Contract - A contract issued by a life insurance company that may be used as the funding instrument for benefits to be made in accordance with a pension plan. A single master contract provides that the group of persons participating in the plan will receive annuities during retirement. Individual certificates stating coverage may be issued to members of the group.

Group Contract - A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Creditor Life Insurance - Life insurance provided to debtors by a lending institution to provide for the cancellation of any outstanding debt should the borrower die. Normally term insurance limited to the amount of the loan.

Group Insurance - Insurance written on a number of people under a single master policy issued to their employer or to an association with which they are affiliated.

Group Life Insurance - Life insurance usually without medical examination on a group of people under a master policy. It is typically issued to an employer for the benefit of employees or to members of an association for example a professional membership group. The individual members of the group hold certificates as evidence of their insurance.

Group Ordinary Life Insurance - Group insurance plan providing life insurance for employees. Traditional whole life policy is split into decreasing insurance protection and increasing cash values.

Group Paid-Up Life Insurance - Accumulating units of single premium whole life insurance and decreasing term insurance which together equal the face amount of the policy. Provided through a group life insurance plan.

Group Permanent Plan - Type of pension plan in which cash value life insurance is issued on a group basis and cash values in each policy are used to pay retirement benefits when a worker retires.

Group Term Life Insurance - Most common form of group life insurance. Yearly renewable term insurance on employees during their working careers.

Group Universal Life Products (GULP) - Universal life insurance plans sold to members of a group such as individual employees of an employer. There are some differences between GULP plans and individual universal life plans; for instance GULP expense charges generally are lower than those assessed against individual policies.

Guaranteed Auto Protection (GAP) Insurance - In the event of a total vehicle loss GAP insurance covers the difference between your net auto insurance payout and your outstanding balance on the vehicle's retail loan or lease contract.

Guaranteed Insurability Option - See Future Increase Option.

Guaranteed Investment Contract - An investment contract with an insurer in which the insurer guarantees both principal and interest on a pension contribution.

Guaranteed Purchase Option - Benefit that can be added to a life insurance policy permitting the insured to purchase additional amounts of life insurance at specified times in the future without requiring evidence of insurability.

Guaranteed Renewable Contract - A provision in an insurance policy that gives the insured the right to continue the policy in force by the timely payment of premiums for a substantial period of time during which period the insurer is prohibited from making unilaterally any change in any provision of the contract while the contract is in force other than a change in the premium rate for classes of policyholders.

Guaranty Fund - A fund derived from assessments against solvent insurance companies to absorb losses of claimants against insolvent insurance companies.