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.

A - B - C - D - E - F - G - H - I - J - K - L - M - N - O - P - Q - R - S - T - U - V - W - X - Y - Z

Glossary Terms ' S '

Sales Cycle - Condition seen in the selling of insurance in which premium prices rise and fall over time in relation to capacity. The sales cycle is generally completed over several of years.

Salvage - Recovery made by an insurance company by the sale of property which has been taken over from the insured as a part of loss settlement.

SAP - See Statutory Accounting Principles.

Scheduled Insurance - An insurance policy amendment or endorsement that specifies items covered in contrast to blanket coverage which would cover all items fitting a given description. Auto insurance is the principal scheduled insurance purchased by consumers.

Self-Administered (Trusteed or Directly Invested) Plan - A plan funded through a fiduciary generally a bank but sometimes a group of individuals which directly invests the accumulated funds. Retirement payments are made from the fund as they fall due.

Self-Administration - The procedure where an employer maintains all records regarding the employees covered under a group insurance plan.

Self-Insurance - A form of risk management through which a firm assumes all or a part of its own losses.

Selling Price Insurance - Coverage which applies to the value of goods which have been damaged or destroyed by an insured peril. The purpose is to assure the profit that would have been incurred through a sale. It defines the insurable value of merchandise which has been sold but not delivered at the amount at which it was sold less any charges not incurred.

Senior Citizen Policies - Contracts insuring persons 65 years of age or more. In most cases these policies supplement the coverage afforded by the government under the Medicare program. For example see Medigap.

Separate Account - An asset account established by a life insurance company separate from other funds used to match specific assets with corresponding liabilities such as pension plans and variable life products. This arrangement permits wider latitude in the choice of investments particularly in equities.

Service-Type Plans - Plans that provide their benefits in the form of services rendered rather than cash (for example Blue Cross and Blue Shield).

Settlement Options - The several ways other than immediate payment in cash which a policyholder or beneficiary may choose to have policy benefits paid.

Short-Term Disability Income Insurance - Coverage designed to cover a disabled person as long as he/she remains disabled up to a specified period not exceeding two years.

Sickness Insurance - A form of health insurance providing benefits for loss resulting from illness or disease.

Skip Person - A beneficiary who is at least two generations younger than the person making the transfer.

Social Security Freeze - A long-term disability policy provision which establishes that the subtraction from benefits paid by Social Security will not be changed regardless of subsequent changes in the Social Security law.

Social Security Option - An option available in some annuity contracts under which the employee may elect that monthly payments of an annuity before a specified age (62 or 65) be increased and that payments thereafter be decreased to produce as nearly as practical level total annual payments including Social Security benefits when they become due.

Soft Market - That part of the insurance sales cycle in which competition is at a maximum as insurance companies use their excess capacity to sell more policies at lower prices. See also Hard Market.

Special Damages - Compensation awarded for actual economic losses such as medical expenses and lost wages. See also General Damages.

Special Risk Insurance - Coverage designed to provide financial protection against risks or hazards of a special or unusual nature.

Split Funding - The use of two or more funding agencies for the same pension plan. An arrangement whereby a portion of the contributions to the pension plan are paid to a life insurance company and the remainder of the contributions invested through a corporate trustee primarily in equities.

Spouse's Benefit - Payments to the surviving spouse of a deceased employee usually in the form of a series of payments upon meeting certain requirements and usually terminating with the survivor's remarriage or death.

Standard Insurance - Life insurance written on the basis of regular morbidity underwriting assumptions used by an insurance company and issued at normal rates.

Standard Markets - Insurance companies for which the majority of people or organizations qualify. See also Domestic Insurer.

Standard Provisions - A set of provisions set forth in laws that prescribed certain rights and obligations of both the insured and the company under personal health insurance policies. These were originally introduced in 1912 and have now been replaced by the Uniform Provisions.

Standard Risk - A person who according to a company's underwriting standards is entitled to purchase insurance protection without extra rating or special restrictions.

State Disability Plan - A plan for accident and sickness or disability insurance required by state legislation of those employers doing business in that particular state.

State Fund - A fund set up by a state government to provide a specific line or lines of insurance.

State Insurance Department - A department of a state government whose duty is to regulate the business of insurance and give the public information on insurance. See also Insurance Commissioner.

State-of-the-Art Defense - An argument used in product liability cases that the technology needed to avoid the loss in a particular case did not exist at the time of the product's manufacture.

Statutory Accounting - Special accounting practices for insurance companies required by state law prescribing a greater level of detail than required by GAAP and designed to provide greater protection for the public against potential insolvency of these essential institutions.

Statutory Accounting Principles - Rules of financial computation and presentation required by statute which must be followed by an insurance company when submitting its financial statements to state insurance departments. Such principles differ from Generally Accepted Accounting Principles.

Statutory Underwriting Profit or Loss - Premiums earned less losses and expenses as calculated under Statutory Accounting Principles..

Step-Rate Premium - A rating structure in which the premiums increase periodically at pre-determined times such as policy years or attained ages.

Step-Up In Basis - An increase in the tax basis of property to the value claimed in the taxable estate of a decedent.

Stock Company - An insurance company organized and owned by stockholders as distinguished from the mutual form of company which is owned by its policyholders.

Stock Exchange - An organization that provides a facility for buyers and sellers of listed securities to come together to make trades in those securities.

Stock Insurance Company - A company in which the legal ownership and control is vested in the stockholders.

Stock Life Insurance Company - A life insurance company owned by stockholders who elect a board to direct the company's management. Stock companies in general issue nonparticipating insurance but may also issue participating insurance.

Stock Redemption Plan - an entity purchase form of buy-sell agreement within a corporation that involves the corporation buying back shares from a departing owner.

Stockholder - A person who owns shares of stock in a corporation.

Straight Life Insurance - Whole life insurance on which premiums are payable for life.

Strict Liability - Liability for damages even though fault or negligence cannot be proven.

Subrogation - Process by which one insurance company seeks reimbursement from another company or person for a claim it has already paid.

Substandard (Impaired) Risk - A risk that cannot meet the normal requirements of a standard insurance policy. Protection is provided in consideration of a waiver a special policy form or a higher premium charge.

Substandard Insurance - Insurance issued with an extra premium or special restriction to those persons who do not qualify for insurance at standard rates.

Supplementary Contract - An agreement between a life insurance company and a policyholder or beneficiary by which the company retains the cash sum payable under an insurance policy and makes payments in accordance with the settlement option chosen.

Surety Bond - An agreement providing for monetary compensation in the event of a failure to perform specified acts within a stated period. The surety company for example becomes responsible for fulfillment of a contract if the contractor defaults.

Surgical Expense Insurance - Health insurance which provide benefits toward the physician's or surgeon's operating fees. Benefits may consist of scheduled amounts for each surgical procedure.

Surgical Schedule - A list of maximum amounts payable by the policy for various types of surgery with the amount based on the severity or complexity of the operation.

Surplus - The net worth of a company equal to the amount by which assets exceed liabilities.

Surplus Lines - (1) A risk or a part of a risk for which there is no standard insurance market available. (2) Insurance written by non-admitted insurance companies.