beneficiary
An individual, institution, trustee, or estate that receives, or may become eligible to receive, benefits under a will, insurance policy, retirement plan, annuity, trust, or other contract.
Better Business Bureau (BBB)
Organizations in the United States and Canada that work with businesses and consumers to resolve complaints. Local BBBs can be contacted for help with questions about or complaints against businesses in their service area.
Bodily injury (Bi) liability
Insurance policy that pays for physical injuries caused to other individuals in the event of a motor vehicle accident.
cash value
The amount available in cash upon surrender of an insurance policy before it becomes payable upon death or maturity
COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits
A federal law that provides temporary continuation of health benefits to many employees who have lost their jobs, as well as some retirees, spouses and dependents. Qualified individuals may be required to pay the entire premium for coverage under the plan.
collision coverage
Insurance designed to pay for the repair or replacement of the policy owner’s car in the event of an accident, no matter who has caused the accident.
comprehensive coverage
Insurance that covers damage to the policy owner’s car not caused by a collision with another car (e.g., theft, fire, flood, vandalism, collision with an animal or bird, earthquake).
credit repair services
Companies that offer to repair the credit of consumers. Consumers are advised to contact the Better Business Bureau for background information on companies offering credit repair services. In some states, these credit repair businesses are regulated.
death benefit
Amount payable by an insurance company to beneficiaries after the insured’s death.
deductible
The part of an insurance claim that is paid directly by the insured person.
disability insurance
An insurance policy that pays benefits in the event that the policy holder becomes incapable of working.
face value
The amount stated on the face of an insurance policy that will be paid in case of death or at maturity.
Federal Insurance Contribution Act
The FICA is the federal act under which mandatory contributions for Social Security tax and Medicare tax are deducted from paychecks.
Federal Trade Commission
The FTC is the federal agency whose primary purpose is to encourage free enterprise and prevent monopolies and restraint of trade. It is also the agency to which identity theft is reported.
fraud
An intentional lie or misrepresentation to obtain benefit or advantage. Making a false or misleading statement.
identity theft
The criminal act of obtaining key pieces of personal information, such as Social Security or driver’s license numbers, in order to impersonate someone else. The information can be used to obtain credit, merchandise, and services in the name of the victim, or to provide the thief with false credentials
insurance
A contract guaranteeing payment of a sum of money in the event of loss or damage to property or a life. Insurance may also guarantee medical services. Policies are secured by regular payments (premiums) made by the consumer.
liability
Financial obligations or debt for which a person or organization is responsible.
long-term care
Coverage that provides skilled nursing, intermediate care, or custodial care for a patient (generally over age 65) in a nursing facility or his or her residence following an injury or illness.
managed care
Arrangement between an employer or insurer and selected providers to provide comprehensive health care at a discount to members of the insured group.
Medicare
A federal program that pays for certain health care expenses for people aged 65 or older. Enrolled individuals must pay deductibles and co-payments, but much of their medical costs are covered by the program.
pharming
Similar to phishing, but involves Trojan programs, worms, or other sophisticated virus technologies that attack the Internet browser address bar. When users type in a valid URL they are redirected to a fraudulent website.
phishing
An attempt to fraudulently acquire sensitive information via electronic communication, such as usernames, passwords, and credit card details, by masquerading as a trustworthy business. PayPal, eBay, and online banks are common targets. The term is a variant of “fishing” and refers to baits used in the hope of a “catch” of financial information.
predatory lending
Fraudulent, unethical, discriminatory, or abusive lending practices designed to exploit vulnerable borrowers and lead to their increased indebtedness (e.g., excessive and disguised fees for home mortgages).
premium
An amount to be paid for a contract of insurance. A sum added to interest, wages, etc; a bonus.
property damage liability
An insurance policy that pays for damage caused to the property of others, including cars, as a result of an accident. Coverage for property damage payment is often mandatory.
risk
Uncertainty as to the outcome of an event. The chance of loss. A person or thing insured.
social insurance
Insurance that is provided by government.
Social Security
The comprehensive federal program of benefits providing workers and their dependents with retirement income, disability income, and other payments. The Social Security tax is used to pay for the program.
unemployment compensation
Payments made under state-administered programs to qualified workers who become unemployed. To qualify, a worker must be involuntarily unemployed (terminated from a “covered” job) and be willing and able to take new employment. Programs are employer financed except in a few states that require small employee contributions.
usury
Charging an extremely high interest rate that is beyond the legal limit set by law. Usury laws vary from state to state.
workers compensation
A system of compensation for work-related injuries or death, paid for by employer contributions.