Glossary

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E

EFT
See electronic funds transfer.

Electronic funds transfer (EFT)
A premium payment method under which policy owners authorize their banks to pay premiums automatically on due dates by transferring funds by wire from the bank to the insurer.

Eligibility period
In contributory insurance plans, the period of time, usually 31 days, during which a new employee may apply for group insurance coverage.

Eligibility requirements
The conditions a person must meet in order to be a participant in a group life insurance, health insurance, or retirement plan.

Elimination period
A designated period of time, beginning at the onset of a disability, which must pass before any policy benefits will be paid. Also know as waiting period.

Employee Retirement Income Security Act of 1974 (ERISA)
A Congressional act establishing:
1. Standards for rights of pension plan participants, investment standards for plan assets and the disclosure of plan provisions and funding;
2. The Pension Benefit Guaranty Corporation (PBGC).

Endorsement
A method of transferring ownership of a negotiable instrument such as a promissory note, by signing on the back of the instrument. Also, for insurance, see rider.

Endorsement method
The method of changing a policy's beneficiary or owner which requires that the policy itself be returned to the insurer so that the change can be recorded directly onto the policy.

Endowment insurance
A type of life insurance that provides that the face amount will be paid if death occurs during a specified number of years or if, at the end of the specified number of years, the insured is alive.

Equity
1.The difference between the value of a piece of property and the charges against it.
2. In law, equity is a system that overrides the common and statutory law to bring about a fair and just result, particularly in those areas where the remedy at law (money damages) is inadequate.
Specific performance of a contract ordered by the court is an equitable remedy.

Equity securities
A type of security that confers an ownership interest in the issuer.

Estate
1.The ownership interest which a person has in real property; must be an interest which is, or can become, a possessory interest.
2.The property left by a decedent. See also, remainder and reversion.

Estate taxes
Taxes on the money and property left by a deceased person.

Exclusion rider
1.An attachment to a health insurance policy which specifies that benefits will not be provided for any loss that results from the condition described in the rider. Also known as impairment rider.
2.An attachment to an automobile insurance policy excluding a specific person or persons in the family from coverage because they are high risk.

Expected mortality
The number of deaths that should occur in a group of people at a given age according to the mortality table.

Experience rating
The method used by insurers to adjust the premium of a group to reflect the actual claim experience of the group.

Experience refund
The portion of a group insurance premium that is returned to a group policyholder whose claim experience is better than that which was expected when the premium was calculated.

Extended coverage endorsement
An endorsement that may be attached to fire insurance policies which includes coverage against damage caused by windstorm, hail, explosion, riot, aircraft or vehicles, etc.

Extended term insurance option
A non-forfeiture benefit under which the net cash value of the policy is used to purchase term insurance for the amount of coverage available under the original policy.