|
A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z
back-dating
Making the effective date of an insurance policy earlier than the date
of the application so that the premium rate will be lower. State law
usually limits back-dating to not more than six months. Also called
dating back.
Top
| Back
back-loaded policy
A life insurance policy (usually a universal life insurance policy)
in which most of the expense charges occur when the policyowner surrenders
the policy or makes cash withdrawals from the policy. Such charges are
usually highest in the early policy years and are often eliminated at
the end of a certain number of years. See also front-loaded
policy and universal life insurance.
Top | Back
backloading
The practice of providing a higher accrual of pension benefits during
a participant's later years of employment. The practice is designed
to encourage and reward long service.
Top | Back
band grading
The grouping of life insurance policies according to death benefit amounts
for the purpose of calculating loading.
Top | Back
basic death benefit
The death benefit according to the terms of the original, basic contract
of a life insurance policy. The basic death benefit does not include
the benefit for any supplementary riders, such as an accidental death
benefit (ADB) rider. For policies whose death benefit remains constant,
the basic death benefit is equivalent to the face amount. Compare to
death benefit and policy proceeds.
Top | Back
basic mortality table
A mortality table without a safety margin. Also called a basic experience
table. See also mortality table and safety margin.
Top | Back
basic services
Under dental insurance, dental services, such as fillings, periodontics,
and oral surgery, which are often covered at 80 percent of their reasonable
and customary charges.
Top | Back
basket clause
(1) From an investment point of view, a provision that allows insurance
companies to invest a small percentage of their assets generally without
regard to statutory restrictions. (2) From an accounting point of view,
a clause which permits life and health insurers to hold a specified
amount of their assets as nonauthorized assets, which are not restricted
in the same way as authorized assets.
Top | Back
beneficiary
The person or other party designated to receive life insurance policy
proceeds. See also contingent beneficiary, irrevocable beneficiary,
primary beneficiary, and revocable beneficiary.
Top | Back
beneficiary declaration
In Canada, an insurance policy beneficiary designation that is made
in a separate written document after the insurance policy has been issued.
Top | Back
beneficiary for value
In the common law jurisdictions of Canada, a person who belongs to the
class of beneficiaries composed of persons who were named as life insurance
policy beneficiaries in return for providing valuable consideration
to the insureds (U.S.: policyowners). The 1962 revision of the Uniform
Life Insurance Act abolished this class of beneficiaries.
Top | Back
benefit
The amount of money paid when an insurance claim is approved. Also called
the policy benefit.
Top | Back
benefit of survivorship
Describes the fact that annuity payments will be made as long as the
designated recipient is alive at the time the payment is due. This concept
is used in the calculation of amounts due under life insurance settlement
options.
Top | Back
benefit schedule
Under a group insurance plan, a table or schedule which specifies the
amount of coverage provided for each class of insured. Insureds are
often classified with reference either to earnings or to rank or position.
Also known as schedule of benefits.
Top | Back
best-earnings plan
A pension plan which specifies that each participant's benefit will
be calculated according to the final-average formula.
Top | Back
binding premium receipt
A type of initial premium receipt that makes insurance coverage effective
immediately but only until the insurance company either rejects the
application or approves it and issues a policy. Compare to conditional
premium receipt.
Top | Back
birthday rule
A rule included in some coordination of benefits provisions that specifies
the manner in which benefits for dependent children are to be coordinated
between two insurance plans. According to the birthday rule, benefits
for dependent children will be paid by the plan of the parent whose
birthday falls earlier in the year.
Top | Back
blended rates
Group mortality rates that are based partially on a group's own experience
and partially on manual rates. Blended rates are used to determine the
appropriate group insurance premium rates for intermediate-size groups.
See also experience rating and manual rates.
Top | Back
Blue Cross plan
A hospital expense insurance plan offered by a regionally-operated health
care provider affiliated with a large national nonprofit health care
organization. This plan generally provides benefits on a "service-type"
basis.
Top | Back
Blue Shield plan
A physician expense insurance plan offered by a regionally-operated
health care provider affiliated with a large national nonprofit health
care organization. This plan generally provides benefits on a "service-type"
basis.
Top | Back
branch manager
The individual in charge of a field office of an insurance company that
uses the branch office distribution system. Also called a general manager.
See also branch office distribution system.
Top | Back
branch office distribution
system
A common system for selling individual life insurance. Under this system,
the soliciting agents who work out of a branch office are under contract
to the insurance company, not to the branch manager, and the agents
receive commissions directly from the insurance company. The branch
office manager, supervisors, and clerical personnel in the field office
are employees of the insurance company, and these employees are subject
to the same types of controls normally exercised by an employer. See
also agency system, branch manager, and general agency distribution
system.
Top | Back
break in service
The length of time between the date an employee leaves a firm and the
date the employee resumes working for that firm. For pension and employee
benefit plan purposes in the United States, a plan participant cannot
be deprived of benefits which accumulate before a break in service unless
the break is longer than (1) five years or (2) the amount of time that
the participant has been employed when the break commences, whichever
is greater.
Top | Back
bridging supplement
In Canada, a supplemental pension provided to a pension plan participant
who retires before age 65. The bridging supplement is generally used
to integrate private pension plans with public pension plans. If a pension
plan participant retires before age 65, the plan sponsor can provide
a bridging supplement until the retiree begins to receive payments from
the public pension plans at age 65. The combined benefit payment that
the participant receives remains level and is the same as the participant
would have received had he or she waited until reaching age 65 before
beginning to receive benefits. The sponsor is providing an amount in
addition to the basic pension payment. Also known as a bridging benefit.
Compare to the notched option.
Top | Back
broker
(1) An insurance salesperson agent who sells insurance products for
more than one insurance company. (2) For a career agent, to submit insurance
applications to companies other than the agent's own company.
Top | Back
brokerage distribution
system
A distribution system that relies on commissioned agents, called brokers,
who sell the products of more than one insurance company.
Top | Back
brokerage manager
A salaried insurance company employee or an independent agent whose
responsibility is to appoint brokers on behalf of the company and to
encourage brokers to sell the products of a particular insurance company.
Top | Back
brokerage shop
An agency operated by an independent general agent who is under contract
to a number of insurance companies. Also known as a brokerage general
agency.
Top | Back
broker-dealer
A firm that provides information or advice to its customers regarding
the sale and/or purchase of securities and that serves as a financial
intermediary between buyers and sellers by manufacturing or acquiring
securities in order to market them to its customers.
Top | Back
bundled insurance product
An insurance product in which the mortality, investment, and expense
factors used to calculate premium rates and cash values are not identified
separately in the policy. Traditional whole life insurance is an example
of a bundled insurance product. See also unbundled insurance product.
Top | Back
business-continuation
insurance
A type of business insurance designed to provide funds so the remaining
partners in a business, or the remaining stockholders in a closely-held
corporation, can buy the business interest of a deceased or disabled
partner or stockholder. See also partnership insurance and stock repurchase
insurance.
Top | Back
business insurance
Insurance that is intended to serve the insurance needs of a business
rather than the needs of an individual.
Top | Back
Buyer's Guide
In the United States, a publication that many states require insurance
companies to give to an applicant for life insurance. The Buyer's Guide
helps the applicant make an informed choice among policies.
Top | Back
| 