valuation mortality tables
Mortality tables developed and published as industry-wide standards
for computing the values of policy reserves. These tables usually have
wide margins of safety, indicating much higher rates of mortality than
do the tables that insurers use for calculating premiums.
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valuation premium
The net annual premium used to calculate reserves. The valuation premium
is most often used to describe the GAAP net premium.
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valued contract
A contract under which the amount of the benefit is set in advance.
A life insurance policy is a valued contract. See also contract of indemnity.
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variable annuity
A form of annuity policy under which the amount of each benefit payment
is not guaranteed and specified in the policy. The amounts of the benefit
payments fluctuate according to the earnings of a separate account fund.
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variable life insurance
A form of whole life insurance under which the death benefit and the
cash value of the policy fluctuate according to the investment performance
of a separate account fund. Most variable life insurance policies guarantee
that the death benefit will not fall below a specified minimum. A minimum
cash value is seldom guaranteed. Because the policy owner assumes investment
risk under variable life insurance policies, these products are considered
securities contracts. In the United States, variable life insurance
policies must be registered with the Securities and Exchange Commission
(SEC), and only agents who have passed the National Association of Securities
Dealers (NASD) examination may sell this product. In Canada, variable
life insurance policies are considered life insurance contracts, and
agents do not need a special license to sell these products. See also
investment-sensitive life insurance.
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variable premium life insurance
See indeterminate premium life insurance.
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variable universal life insurance
A form of whole life insurance that combines the premium and death benefit
flexibility of universal life insurance with the investment flexibility
and risk of variable life insurance. Because the policyowner assumes
investment risk under variable universal life insurance policies, these
products are considered securities contracts. In the United States,
variable universal life insurance policies must be registered with the
Securities and Exchange Commission (SEC), and only agents who have passed
the National Association of Securities Dealers (NASD) examination may
sell this product. In Canada, variable universal life insurance policies
are considered life insurance contracts, and agents do not need a special
license to sell these products. Also called flexible premium variable
life insurance and universal life II. See also investment-sensitive
life insurance.
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vested benefit
In pension and employee-benefit terms, a benefit that a plan participant
is entitled to receive if the participant leaves the plan. By contrast,
nonvested benefits would be forfeited by the participant upon leaving
the plan. A participant's benefits become vested after a certain number
of years of participation in a plan.
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void contract
A contract that is not valid. For example, a life insurance contract
that lacks insurable interest is void for reasons of public policy.
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voluntary employees' beneficiary association (VEBA)
See 501(c)(9) trust.
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voluntary plan termination
The curtailment or termination of a pension plan with the curtailment
or termination being initiated by the plan sponsor. Contrast with involuntary
plan termination. See also distress termination and standard plan termination.
