Glossary

Is the portion of premium that applies to the expired part of the policy period. Insurance premiums are payable in advance to the insurance company but they are not fully earned until the policy period expires.

Is a federal law that states the minimum standards for private pensions and provides rules on the federal income tax effects of transactions connected with employee benefit plans.

Is an amendment to a contract under which the stated coverage of an insurance policy may be altered.

Is the point at which a policy's cash value equals its face amount.

Is a life insurance policy which becomes payable to the policyholder on the policy’s maturity date, or to a beneficiary if the insured dies prior to that date

Is the part of the Asset Valuation Reserve which protects against future losses regarding any equity related investments.

See Indexed Annuity.

Is a Universal Life insurance policy which allows policyholders to tie accumulation values to a stock market index.

Is the ownership interest in a corporation’s stocks, as opposed to bonds.

Before an applicant can purchase an individual life insurance policy, there is a common requirement by life insurance companies that potential policyholders undergo a physical examination or medical tests; the results of which can determine the premiums charged or, more importantly, whether the applicant is actually a viable candidate for coverage.

A non-guaranteed credit found in non-participating whole life products that are applied to contracts for favorable mortality, expense and investment experience. They are declared at the beginning of the year and credited at the end of the year.

Are the charges incurred as a result of the insurer's overheads and cost of doing business. Typically the charges are composed of the costs incurred for medical examinations, the approval of applications, preparation of policies for issue, initialization of policy records, commissions and the on-going administration of a policy.

Is a life insurance (available as a Non-Forfeiture Option) in which a policyholder stops paying premiums but keeps the full policy coverage in force for as long the policy’s cash value allows.

Is an individual having a greater-than-average likelihood of loss.

See Rated Policy.