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Life insurance on which all premiums have been paid, but have not yet matured by death or endowment.

Paid-Up Additions

Additional single-premium Life insurance paid for by policy dividends and added to the face amount. For example, your mutual insurer declares a $100 dividend, which you could have taken as cash. Instead, you ask them to use the money to buy you an additional Whole life policy, which is paid up to age 100. Although this additional policy is small, no physical exam is required, so this option is very popular with clients who have health problems. Over a period of time, you can obtain substantial additional coverage.

Pair and Set Clause

A clause found in various Property insurance contracts that states that when part of a set is damaged or destroyed, the insured is not entitled to reimbursement for the entire set. Policies provide various methods for determining the amount of reimbursement. Fine Arts floaters do not contain this clause.

Partial Disability

A condition in which, as a result of injury or sickness, the insured cannot perform one or more of the duties of his/her occupation but can perform some. Follows a period of Total Disability.

Partial Loss

A loss that does not either 1) completely destroy or render worthless the insured property, or 2) exhaust the insurance applying thereto.

Participating (Par)

Insurance that pays policy dividends to policyholders. Issued by a Mutual Company. Dividends may never be guaranteed and they are not taxable, since the IRS considers them to be a return of premium already paid.

Partnership Insurance

Life or Health insurance sold to a partnership to protect against the loss of business continuity caused by the death or disability of a partner. For example, if your partner dies, his/her share of the business would go to his/her spouse who knows nothing about the business. To avoid this, you buy a Life insurance policy on your partner and he/she buys one on you. If he/she dies, the money goes to you tax free and you use it to buy out his/her spouse. A “buy/sell” agreement should be drafted by a lawyer and signed by all four parties: you, your spouse, your partner and his/her spouse.

Payor Benefit

A rider or provision, usually found in Juvenile policies, under which premiums are waived if the Payor of the premium (usually a parent) becomes disabled or dies while the child is still a minor.

Percentage Participation

A contract provision that the company will share covered losses in agreed proportions. Also called Co-insurance. Percentage participation requirement also refers to the amount of employees that must enroll in a group. In a noncontributory group, the percentage participation requirement is 100%. In a contributory group, the percentage participation requirement is 75%.

Performance Bond

A Surety Bond that guarantees a job will be completed by the contractor according to contract specifications.