Dictionary

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Option

The right to purchase property within a definite time at a specified price. There is no obligation to purchase but the seller is obligated to sell if the option holder exercises the right to purchase.

Optionally Renewable

A contract of Health insurance in which the insurer reserves the unrestricted right to terminate coverage at any anniversary or, in some cases, at any premium due date, but does not have the right to terminate coverage between such dates. Renewal is at the discretion of the insurer.

Ordinary Life Insurance

Life insurance other than Industrial or Group. Ordinary life may be Whole Life, Endowment or Term. The grace period on all Ordinary Life insurance is 30 days. The Mortality Table is used to calculate the rates and benefits payable for Ordinary Life insurance.

Original Age

The insured’s age when the policy was initially purchased. Often calculated based on the applicant’s closest birthday.

Original Principal Balance

The total amount of principal owed on a mortgage before any payments are made.

Origination Fee

A fee paid to a lender for processing a loan application. The origination fee is stated in the form of points. One point is 1 percent of the mortgage amount.

Ostensible Agency

A form of implied agency relationship created by the actions of the parties involved rather than by written agreement or document.

Other Insurance (P&C)

The existence of another contract covering the same interest and Perils. Sometimes called Pro-Rata Liability, because the insurers pay claims according to the proportion of premiums paid to each. (Remember, you can’t collect in total more than you lost.)

Other Insurance (L&H)

The existence of another contract covering the same interest and perils. Although Life insurance policies pay in addition to each other, most Health insurance policies follow the Principle of Indemnity, which is reinforced by the Other Insurance clause. For example, if you are covered by two Disability Income policies, they would share your claim proportionately. You cannot recover more than you actually lost. You can collect from both policies, but you may not be able to collect in full from both.

Outpatient

A patient who is not a bed patient in the hospital in which she receives treatment.