Insurance Terms

Named Perils Coverage

Insurance contract under which covered perils are listed and benefits for a covered loss are paid to the policyholder.
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Negative Amortization

Financing arrangement in which monthly payments may be less than the true amortized amounts and the loan balance may increase, rather than decreases, over the term of the loan. The interest shortage can be added back to unpaid principal or can be added back to the loan and payable at maturity.
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Net Worth

Total financial worth after totaling all assets and subtracting all liabilities.
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No-Fault Insurance

Auto insurance laws in some states that require insurance companies to cover their policyholders' losses in the event of an accident, regardless of who caused the accident.
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Noncancellable

A type of contract that cannot be canceled by the insurance company and is used for health and disability insurance.
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Noncancellable Guaranteed Renewable

An insurance policy that is not subject to alteration, termination, or increase in premium upon renewal.
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Nonqualified Deferred Compensation Plan (NQDC)

Nonqualified deferred compensation (NQDC) is an arrangement between an employer and employee that defers the receipt of currently earned compensation. A NQDC plan does not have to comply with the discrimination and administrative rules that govern qualified benefit plans, such as Section 401 of the Internal Revenue Code and the Employee Retirement Income Security Act (ERISA).
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Nonresident Alien

An individual whose residence is not within the United States, who is not a citizen of the United States, and who has not been granted permanent resident status.
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Nonwage Income

Income other than what is earned in the form of wages or salary.
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Normal Retirement Age

The age at which a pension plan participant can retire and immediately receive unreduced benefits. The normal retirement age for Social Security retirement benefits.
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