Package Policy: A combination of two or more individual polices or coverages into a single policy. A homeowners policy, for example, is a package combining property, liability and theft coverages for the homeowner.

Paid-up Insurance: Insurance on which all required premiums have been paid. The term is frequently used to mean the reduced paid-up insurance available as a nonforfeiture option.

Paramedical Examination: Physical examination of an applicant by a trained person other than a physician.

Partial Disability: The result of an illness or injury which prevents an insured from performing one or more of the functions of his/her regular job.

Partial Disability: A benefit sometimes found in disability income policies providing for the payment of reduced monthly income in the event the insured cannot work full time and/or is prevented from performing one or more important daily duties pertaining to his occupation.

Participating Insurance: Insurance issued by an insurance company providing participation in dividend distribution.

Participating Policy: A life insurance policy under which the company agrees to distribute to policyholders the part of its surplus which its Board of Directors determines is not needed at the end of the business year. Such a distribution serves to reduce the premium the policyholder had paid. (See also: Policy dividend; Nonparticipating policy)

Participating Policy: One under which the policy owner is entitled to receive shares of the divisible surplus of the insurer. Such shares are commonly called dividends.

Pension Benefit Guaranty Corporation (PBGC): The Federal body responsible for administering the plan termination insurance program under ERISA.

Pension Benefits: A series of payments to be provided in accordance with the plan of benefits.

Pension Plan: A plan established and maintained by an employer, group of employers, union or any combination, primarily to provide for the payment of definitely determinable benefits to participants after retirement.

Percentage Participation: A provision in a health insurance contract that the insurer and insured will share covered losses in agreed proportions. Also see Coinsurance.

Peril: The cause of a loss insured against in a policy.

Peril: The cause of a possible loss, such as fire, windstorm, theft, explosion, or riot.

Permanent Life Insurance: A phrase used to cover any form of life insurance except term; generally insurance that accrues cash value, such as whole life or endowment.

Persistency: A term used to refer to the length of time insurance remains continuously in force.

Persistency: The degree to which policies stay in force through the continued payment of renewal premiums.

Personal Articles Floater: A form of coverage designed to meet the needs for insurance on property of a moveable nature. The coverage usually protects against all physical loss, subject to special exclusions and conditions. Examples of property covered include jewelry, furs, silverware, fine arts.

Personal Injury Protection (PIP): First-party no-fault coverage in which an insurer pays, within the specified limits, the wage loss, medical, hospital and funeral expenses of the insured.

Personal Lines: Those types of insurance, such as auto or home insurance, for individuals or families rather than for businesses or organizations.

Personal representative:A person appointed through the will of a deceased or by a court to settle the estate of one who dies.

Physical Damage: Damage to or loss of the auto resulting from collision, fire, theft or other perils.

Physician's Expense Insurance: Coverage which provides benefits toward the cost of such services as doctor's fees for nonsurgical care in the hospital, at home or in a physician's office, and X-rays or laboratory tests performed outside the hospital. (Also called Regular Medical expense Insurance.)

Plan Administrator: The person or persons controlling the money or property contributed to the plan, usually designated in the plan agreement.

Point-of-Service Plans: Often known as open-ended HMOs or PPOs, these plans permit insureds to choose providers outside the plan yet are designed to encourage the use of network providers.

Policy: The printed legal document stating the terms of the insurance contract that is issued to the policyholder by the company.

Policy: A contract of insurance.

Policy: The legal document issued by the company to the policyholder, which outlines the conditions and terms of the insurance; also called the policy contract or the contract.

Policy Dividend: A refund of part of the premium on a participating life insurance policy reflecting the difference between the premium charged and actual experience.

Policy Loan: A loan made by a life insurance company from its general funds to a policyholder on the security of the cash value of a policy.

Policy Reserves: The measure of the funds that a life insurance company holds specifically for fulfillment of its policy obligations. Reserves are required by law to be so calculated that, together with future premium payments and anticipated interest earnings, they will enable the company to pay all future claims.

Policy Term: That period for which an insurance policy provides coverage.

Policyholder: The person who owns a life insurance policy. This is usually the insured person, but it may also be a relative of the insured, a partnership or a corporation.

Policyholder: A person who pays a premium to an insurance company in exchange for the insurance protection provided by a policy of insurance.

Policyholders' Surplus: Sum left after liabilities are deducted from assets. Sums such as paid-in capital and special voluntary reserves are also included in this term. This surplus is an additional financial protection to policyholders in the event a company suffers unexpected or catastrophic losses. In effect, it is the financial base that permits a company to sell insurance.

Pollution Liability: Exposure to lawsuits for injury or cleanup costs that result from pollution damage

Pool: An organization of insurers or reinsurers through which particular types of risk are underwritten and premiums, losses and expenses are shared in agreed-upon amounts.

Pooling arrangement: An agreement to divide any losses that might occur equally among two or more people, typically with each paying the average loss.

Portability: The transfer of pension rights and credits when a worker changes jobs.

Preadmission Certification: Process in which a health care professional evaluates an attending physician's request for a patient's admission to a hospital by using established medical criteria.

Preexisting Condition: A physical and/or mental condition of an insured which first manifested itself prior to the issuance of his/her policy or which existed prior to issuance and for which treatment was received.

Preexisting Condition: A physical condition that existed before the effective date of coverage.

Preferred Provider Organization (PPO): An arrangement whereby a third-party payer contracts with a group of medical care providers who furnish services at lower than usual fees in return for prompt payment and a certain volume of patients.

Preferred Stock: Evidence of ownership which entitles the owners to receive dividends from the corporation before the common stockholders and which usually also provides a prior claim to corporate assets if the corporation is dissolved.

Premium: The sum paid by a policyholder to keep an insurance policy in force.

Premium finance: allows the insured to pay part of the premium when coverage takes effect and pay the rest during the policy period.

Premium Loan: A policy loan made for the purpose of paying premiums.

Premium Tax: A tax, imposed by each state, on the premium income of insurers doing business in the state.

Prepaid Group Practice Plan: A plan under which specified health services are rendered by participating physicians to an enrolled group of persons, with a fixed periodic payment in advance made by or on behalf of each person or family. If a health insurance carrier is involved, a contract to pay in advance for the full range of health services to which the insured is entitled under the terms of the health insurance contract. Such a plan is one form of Health Maintenance Organization (HMO).

Primary Beneficiary: See Beneficiary.

Primary Insurance: Insurance that pays compensation for a loss ahead of any other insurance coverages the policyholder may have.

Principal Sum: The amount payable in one sum in the event of accidental death and in, some cases, accidental dismemberment. When a contract provides benefits for both accidental death and accidental dismemberment, each dismemberment benefit is an amount equal to the principal sum or some fraction thereof.

Probate: The court-supervised process of validating or establishing a distribution for assets of a deceased including the payment of outstanding obligations.

Probate estate: The portion of the assets and liabilities whose distribution is supervised by the courts in the probate process.

Probationary Period: A period from the policy date to a specified time, usually 15 to 30 days, during which no sickness coverage is effective. It is designed to eliminate a sickness actually contracted before the policy went into effect.

Product Liability: legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of its product.

Product Liability Insurance: Protection against financial loss arising out of the legal liability incurred by a manufacturer, merchant, or distributor because of injury or damage resulting from the use of a covered product.

Professional Review Organization (PRO): An organization in which practicing physicians assume responsibility for reviewing the propriety and quality of health care services provided under Medicare and Medicaid.

Proof of Loss: Documentation presented to the insurance company by the insured in support of a claim so that the insurer can determine its liability under the policy.

Proof of Loss: Documentary evidence required by an insurer to prove a valid claim exists. It usually consists of a claim form completed by the insured and the insured's attending physician. For medical expense insurance itemized bills must also be included.

Property Damage Coverage: An agreement by an insurance carrier to protect an insured against legal liability for damage by an insured automobile to the property of another.

Property Insurance: Insurance providing financial protection against the loss of, or damage to, real and personal property caused by such perils as fire, theft, windstorm, hail, explosion, riot, aircraft, motor vehicles, vandalism, malicious mischief, riot and civil commotion, and smoke.

Property Insurance: Provides financial protection against loss or damage to the insured's property caused by such perils as fire, windstorm, hail, etc.

Proration: The adjustment of benefits paid because of a mistake in the amount of the premiums paid or the existence of other insurance covering the same accident or disability.

Proscription:  A claim not covered by an insurance policy because it is filed after the time required in the language of the contract. 

Prospective Payment: An advancement of payment for health care charges that are likely to occur.

Prototype Plan: A standardized plan, approved and qualified as to its concept by the Internal Revenue Service, which is made available by life insurance companies, banks and mutual funds for employers' use.

Provision: A part (clause, sentence, paragraph, etc.) of an insurance contract that describes or explains a feature, benefit, condition, requirement, etc. of the insurance protection afforded by the contract.

Proximate Cause: The dominating cause of loss or damage; an unbroken chain of events between the occurrence and damage.

Punitive Damages: a court-awarded amount that exceeds the economic losses and general damages of a defendant and is intended solely to punish the plaintiff