adverse selection: Under a health insurance plan, if only the sick people who need to take advantage of the covered benefits join the plan, the high number of resulting claims could cause the costs paid by the plan to soar and threaten it with financial collapse, a phenomenon known as “adverse selection.”
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adjuster: See claims adjuster.
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adjusted cash flow/benefits paid: The ratio of adjusted cash flow to total cash benefits paid to policyholders.
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adjusted cash flow: Operating cash flow plus cash and short-term investments.
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adjustable life insurance: A type of insurance that allows the policyholder to change the plan of insurance, raise or lower the face amount of the policy, increase or decrease the premium and lengthen or shorten the protection period.
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actuary: Someone professionally trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurance (the calculation of premiums, reserves and other values). An actuary uses complex mathematical methods, often with the aid of computers, to analyze past loss data and other statistics and develop systems for determining future premiums.
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actual cash value (ACV): The value of property as figured by determining what it would cost to replace the property (see replacement cost) and then adjusting this replacement cost by subtracting an amount that reflects depreciation.
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accumulation period: The time during which a person pays money into an annuity contract and builds up a fund to provide a deferred annuity.
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accredited adviser in insurance: See AAI.
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accounts receivable insurance: Pays for the cost of reconstructing accounts receivable records that have been damaged or destroyed by a covered peril. Even more important, it covers any payments that cannot be collected because records cannot be reconstructed.
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