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GAAP
reserves
Reserves that are calculated in accordance with generally
accepted accounting principles.
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general account
An
undivided account in which life and health insurers formerly recorded all
incoming funds. General accounts are still usually insurers' largest
accounts, but since the early 1960s, life and health insurers have begun
using other accounts as well. See also separate account.
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general agency
distribution system
Along with the branch office system, the
general agency distribution system is part of the agency system, which is
the most common system used to sell individual life insurance products.
Under the general agency system, each field office is headed by a general
agent, who is an independent entrepreneur under contract to the insurer.
As an independent entrepreneur, the general agent has a great deal of
control over how the field office is to operate. Typically, the staff of
the field office is employed by the general agent, not the insurer;
salaries and office expenses are paid by the general agent, not the
insurer; and the soliciting agents are under contract to the general
agent, not the insurer. In a traditional general agency system, all
commissions from the insurer are paid to the general agent. The general
agent keeps a portion of each commission, called an overriding commission,
and then pays the remaining commission to the appropriate soliciting
agent. Some insurers have modified this procedure and now pay commissions
directly to soliciting agents and overriding commissions directly to
general agents. See also agency system, branch office distribution system,
and overriding commission.
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general agent
(GA)
The individual in charge of a field office of an insurer that
uses the general agency distribution system. The general agent is an
independent entrepreneur who is under contract to the insurer.
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generally accepted
accounting principles (GAAP)
The set of accounting principles used
by most firms outside the life insurance industry and sometimes used by
life and health insurance companies. GAAP is based on the going-concern
concept of asset valuation.
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GIC
See guaranteed
investment contract (GIC).
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GI rider
See
guaranteed insurability (GI) rider.
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good health
provision
A provision contained in some group credit policies
stating that a policy is void if the insured was not in good health when
the application was signed or when the policy was delivered, whichever was
specified in the contract.
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grace period
The
length of time (usually 31 days) after a premium is due and unpaid during
which the policy, including all riders, remains in force. If a premium is
paid during the grace period, the premium is considered to have been paid
on time.
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graded-premium whole life
insurance
A type of whole life insurance in which premiums increase
once or at specified points in time, such as every three years, until a
premium that remains level is reached.
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gross premium
The
amount that policyowners actually pay for their insurance. The gross
premium equals the net premium plus the loading.
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group creditor life
insurance
Group insurance coverage wherein a master contract is
issued to cover the lives of current and future debtors of the
policyowner. The beneficiary of such coverage is the policyowner.
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group deferred
annuity
A type of annuity sometimes used to fund a pension plan.
Employer contributions under a group deferred annuity contract are used to
purchase deferred annuities to provide for the retirement benefits of plan
participants.
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group
insurance
Insurance that provides coverage for several people under
one contract, called a master contract.
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group life
insureds
In Canada, the persons who are insured by a group life
insurance contract. Usually simply called "insureds" in the United States.
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group ordinary life
insurance
Group life insurance in which at least a part of the
coverage is permanent and builds a cash-value.
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group paid-up
insurance
A type of contributory group life insurance in which the
employee's contributions are used to purchase paid-up whole life insurance
and the employer's contributions are used to purchase term insurance. The
amount of insurance coverage on each employee remains level each year.
Therefore, as the amount of paid-up insurance on an employee increases
over time, the amount of term insurance which the employer must purchase
to make up the difference decreases.
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group permanent life
insurance
Any of several types of life insurance which build a cash
value and are underwritten on a group basis. Group permanent life
insurance is often used to fund group pension plans and/or to provide life
insurance coverage that will continue after retirement.
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group persons
insured
In Canada, the persons who are insured by a group health
insurance contract. Usually simply called "insureds" in the United States.
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group practice model
(GPM)
A means of organizing a health maintenance organization (HMO)
in which the physicians in the HMO share a central facility. See also
individual practice association (IPA).
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group
representative
A salaried insurance company employee who deals
solely with the distribution of group insurance products. The primary
responsibilities of group representatives include finding prospects,
designing proposals, installing the product, and renegotiating the policy
at renewal.
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group RRSP
In
Canada, a collection of individual registered retirement savings plans
(RRSPs) established and maintained by an employer in order to help
employees save for retirement. Each RRSP within the group is owned
entirely by the employee. Employer contributions therefore become vested
as soon as they are made.
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group universal life
insurance (GUL)
Group life insurance for which the insured usually
pays the full premium and can choose the amount of premium to pay, and in
which the death benefit is determined by the amount of the premium. The
insured can vary the premium and death benefit amounts during the life of
the policy. Like individual universal life insurance, GUL is designed to
combine insurance protection with a savings/investment element. In
addition, GUL is usually "portable," which means that a group member who
leaves the group can continue coverage under the group plan. Sometimes
called a Group Universal Life Program (GULP). See also universal life
insurance.
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Guaranteed Income
Supplement (GIS)
In Canada, a supplemental monthly benefit
available to Old Age Security (OAS) recipients who receive less income
than a stated amount.
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guaranteed insurability
(GI) rider
An amendment to a life insurance policy that gives the
policyowner the right to purchase additional insurance of the same type as
provided in the original policy. The additional insurance can equal no
more than an amount specified in the policy contract and can be purchased
at specified premium rates and at specified times without new evidence of
insurability. Also called a policy purchase rider.
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guaranteed investment
contract (GIC)
A pension plan funding vehicle in which an insurer
accepts a single deposit from a plan sponsor for a specified period of
time, such as five years, and holds the deposit at a specified rate of
interest. At the end of the period, the deposited funds, including
accumulated interest, are returned to the plan sponsor, who can reinvest
the plan assets with the insurer or with another party. Also called a
guaranteed income contract or a guaranteed interest contract.
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guaranteed-issue
insurance
Insurance coverage for which there is usually no
individual underwriting. All eligible members of a particular group of
proposed insureds who apply for the policy and who meet certain conditions
are automatically issued a policy.
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guaranteed renewable
policy
An individual health insurance policy that specifies that
the insurer will continue the policy until the insured reaches a specified
age, if premium payments are made when due. The insurer can change premium
rates for broad classes of insureds. See also cancellable policy,
conditionally renewable policy, noncancellable and guaranteed renewable
policy, noncancellable policy, and optionally renewable policy.
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guaranty
association
In the insurance industry, an organization whose
purpose is to protect policyowners from losses suffered through the
insolvency of an insurance company.
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Guidelines Governing Group
Accident and Sickness Insurance
In Canada, Superintendents'
Guidelines that regulate several aspects of group health insurance
contracts, including the types of groups to which a group health insurance
contract may be issued and the particulars that must be included in the
certificate issued to each person insured by the contract. See also
Superintendent's Guidelines.
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Guidelines Governing Group
Life Insurance
In Canada, a set of guidelines issued by the
Canadian Council of Insurance Regulators which specifies, among other
things, the types of groups which are eligible for group life insurance.
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guide to buying life
insurance
In Canada, a written statement developed by the Canadian
Life and Health Insurance Association (CLHIA) which describes all of the
types of life insurance available and is intended to help prospects for
life insurance compare the advantages and disadvantages of each type of
policy.
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