Partial Disability Inability of the insured to perform one or more of the important daily duties of his or her regular occupation. The income payment to the insured is reduced from that of total disability.

Payee An insured individual or a beneficiary who receives a loss or benefit payment from an insurer.

Permanent and Total Disability A disability in which a wage earner is forever prevented from working because of injury or illness suffered.

Personal Liability Insurance Part of a standard homeowners policy that covers financial losses you suffer when you accidentally cause bodily injuries to others or damage to their property.

Policy Basis The amount of the policyholder's investment in a life insurance policy reduced by any dividends and any cash value withdrawals.

Policy Loan The amount that the owner of a life insurance policy can borrow, at an interest rate set by the company, from the insurer up to the cash surrender value. If interest is not paid when due it is deducted from any remaining cash value. At the death of the policyholder any outstanding policy loans and interest due are subtracted from the death benefit.

Policy Period Time period during which an insurance policy is in force.

Pre-existing Condition An illness or medical condition for which a person was treated or advised within a specified time period before applying for a life or health insurance policy. A preexisting condition can result in the cancellation of the policy if it is not disclosed up front.

Preferred Risk An insured or applicant for insurance who has a lower expectation of incurring a loss than the standard applicant and can obtain favorable premiums.

Premium The payment required for an insurance policy to remain in force.

Present Value Value today of a future payment, or stream of payments, discounted at some appropriate compound interest or discount rate.

Presumptive Disabilities The assumption of total disability when an insured loses sight, hearing, speech, or a limb.

Principal Residence The home that a taxpayer lives in most of the time during the taxable year.