direct response marketing
A method of selling insurance
products directly to the consumer, usually through direct mail,
advertising in print and broadcast media, or by telephone
solicitation, without the use of insurance agents.
disability
Inability to work due to an injury or
sickness. See also partial disability, presumptive disability, and
total disability.
disability benefits
Benefits that are payable
periodically while an insured continues to be disabled. "Being
disabled" is generally defined in terms of inability to work. See
also total disability.
disability buy-out insurance
Insurance that provides
cash funds to a business or professional partnership so that the
business interests of a totally disabled partner or stockholder may
be purchased if the disability is long-term or permanent.
disability income insurance
A type of health insurance
designed to compensate insured people for a portion of the income
they lose because of a disabling injury or illness. Generally,
benefits for disability income insurance are provided for the
disabled person in the form of monthly payments. Sometimes called
loss of time insurance. See also long-term disability income
insurance and short-term disability income insurance.
disability table
(1) A tabulation of the probabilities
of becoming disabled at each age, plus certain related figures. (2)
A tabulation of the number of persons who are still disabled at each
age and the duration of disability, plus certain related figures.
disabled life annuity
A series of payments, each of
which is contingent on a person being alive and still disabled.
discharge provision
Part of a small estates statute
which releases an insurance company from liability under an
insurance contract if it pays the proceeds to the deceased insured's
estate. See small estates statutes.
Discontinuity Index
A test required by the NAIC Model
Life Insurance Disclosure Regulation and designed to disclose
instances in which policy illustrations have been manipulated so
that they present an unrealistic progression of premiums, dividends,
and benefits.
disintermediation
The process of removing money from a
financial intermediary in order to earn a higher yield somewhere
else, usually with another financial intermediary. Historically,
disintermediation, through policy loans or surrendered policies, has
been a major problem for life and health insurers during periods of
economic depression and high inflation.
distress termination
In pension and employee-benefit
plans, the curtailment of a plan which does not have sufficient
funds to cover all the benefits to which the plan's participants are
entitled. Contrast to standard plan termination. See also
involuntary plan termination and voluntary plan termination.
distribution expenses
Expenses involved in making
insurance products available to the general public. These expenses
include agent compensation, group sales representatives' salaries,
and postal, printing, and telecommunications expenses for those
companies that use direct response marketing.
distribution system
In an insurance company, the
network of organizations and individuals that performs all the
marketing activities required to convey a product from an insurer to
its customers.
dividend
(1) A refund of excess premium paid to the
owner of an individual participating life insurance policy. Such a
dividend is paid out of an insurer's divisible surplus. Also called
a policy dividend or a policyowner dividend. See also divisible
surplus. (2) The portion of a group insurance premium that is
returned to a group policyholder whose claims experience is better
than had been expected when the premium was calculated. Also called
experience rating refund, experience refund, and retroactive rate
reduction. (3) A periodic payment paid by a business to a
stockholder. Dividends paid in cash are called cash dividends.
Dividends paid in the form of additional shares of stock are called
stock dividends.
dividend accumulations
Amounts that result when a
policyowner decides to leave the policy dividends owed to him or her
on deposit with the insurer. Also called dividend credits.
dividend expenses
When an insurer calculates
policyowner dividends, dividend expenses represent the amount of
money that it costs the insurer to maintain each policy in force for
the current year.
dividend interest rate
The interest rate that
represents the actual rate being earned on an insurer's present
investments. The dividend interest rate is used to calculate
policyowner dividends.
dividend options
Several alternatives that
participating policyowners can choose from to indicate the manner in
which they want to receive their share of the insurance company's
divisible surplus. See accumulation at interest option, additional
term insurance option, automatic dividend option, cash payment
option, dividend accumulations, enhancement type policy, paid-up
additions, and premium reduction option.
dividend rate of mortality
The rate of mortality (for a
given age) that an insurer chooses to use in calculating policyowner
dividends. The dividend rate of mortality is the mortality rate
currently experienced by the insurer on the policies it has sold.
divisible surplus
The portion of an insurance company's
earnings that is available for distribution to the owners of the
company's participating policies. See also surplus.
doctrine of reasonable expectations
A doctrine applied
by some courts under which the reasonable expectations of
policyowners and beneficiaries will be honored, even though the
language of the policy does not literally support these
expectations.
domestic corporation
From the point of view of a
particular state in the United States, a company incorporated under
the laws of that state. Compare to alien corporation and foreign
corporation.
double indemnity
Death benefit coverage that pays an
additional benefit equal to the basic death benefit of the policy if
the insured's death is accidental. See also accidental death benefit
(ADB) rider.
drinking criticism
An underwriting term for evidence of
alcohol abuse or alcoholism.
dual-choice provision
In the United States, part of the
Health Maintenance Organization Act of 1973 which requires employers
that meet certain specifications to offer health insurance through a
federally qualified HMO as an alternative to a traditional health
insurance plan.
dual registration
The licensing of registered
representatives with more than one broker-dealer.
duplicate coverage inquiry (DCI) form
In the United
States, a form filled out by a health insurance company claim office
and sent to another company in order to ascertain whether an
accident or injury for which the first company has received a claim
is also insured by the second company.
