Absolute Assignment
A legal document which enables the owner to transfer irrevocably all incidents of ownership in the contract to a third party.

Accelerated Benefit Provision
A provision in many policies which allows the policy owner to receive a portion of the death benefit early if the insured person is diagnosed with a terminal illness (clearly defined health-related circumstances) or is permanently confined to a nursing home; also known as Living Benefits; also known as Benefit Access Rider (BAR).

Accidental Death Benefit
A rider added to a policy that provides an additional benefit if the insured dies from accidental causes; also known as Double Indemnity.

Accounting Value Rider
Provides enhanced cash surrender values in the early years of the policy by waiving a percentage of the surrender charges. The offset to this is deferred first year compensation to the producer.

Actuary
A person professionally trained in the technical aspects of insurance and related fields, particularly in the mathematics of insurance such as the calculation of premiums, reserves, and other values.

Accumulation Period
The time prior to a deferred annuity’s payout period when money builds up in the annuity contract.

Accumulation Value
The amount of money accrued in the policy based on the net premium payments, interest credited and monthly deductions made. The accumulation value receives new net premium payments and is valued daily for current investment results. The accumulation value is decreased by expense charges, current monthly charges, fund charges if applicable, charges for supplementary coverage, loans, and partial withdrawals.

Activities of Daily Living (ADLs)
The basic activities of daily living, such as bathing, eating, getting dressed, using the toilet, and transferring from bed to chair.

Additional Indemnity (AI)
Premium paying rider that provides extra coverage that is paid out in the event of an accidental death.

Additional Term Rider (ATR)
One-year, non-convertible, annually renewable term rider found on older whole life product. It is paid for by surrendering PUAs. The face amount may increase for 5 or 10 years depending upon the product.

Adjustable Life Insurance
A type of life insurance that allows the policyholder to change the plan of insurance, raise or lower the policy’s face amount, increase or decrease the premium, and lengthen or shorten the protection period, subject to certain minimums and maximums. To increase the death benefit, the insurance company usually requires the policyholder to furnish satisfactory evidence of continued good health. Also known as Universal Life Insurance.

Administrative Fee
A monthly deduction normally guaranteed not to exceed say $10 after the first policy year, to compensate the insurer for administrative expenses associated with Policy issue and ongoing Policy maintenance including premium billing and collection, policy value calculation, confirmations, period reports and other similar matters.

Adverse Selection
Refers to the tendency of people who have a greater-than-average likelihood of loss to apply for, or continue insurance protection, to a greater extent than those who have an average or less-than-average likelihood of the same loss.

Agent
A representative of an insurance company who is authorized to sell and service insurance contracts. Life insurance agents are also known as life underwriters or producers.

Anniversary Date Of Policy
Twelve-month period measured from the date of issue

Annual Statement
An annual statement is sent to policowners and producers after the policy anniversary date. The statement provides an annual summary on the aggregate results of the policy year's financial activities. It includes current and prior year values of death benefit and cash value as well as providing information on declared interest.

Annual / Semi-Annual Report
A formal report sent to a VUL policyowner that provides market and performance overviews as well as the financial statements of each underlying investment option. This is a requirement from the SEC and is not considered marketing material.

Application
A statement of information made by a prospective purchaser that helps the insurer assess the acceptability of risk.

Asset Class
A method of grouping similar types of investments. Variable universal life insurance investment options are often organized by asset class ranging from Small Cap to Fixed Account. Each asset class has a set of characteristics and relative risk versus potential reward. By understanding the potential risk and reward of the different asset classes, you can further refine your investment strategy while addressing insurance protection needs.

Assets
Property owned by an insurance company—including stocks, bonds, and real estate. Insurance accounting focuses on solvency and the ability to pay claims; therefore, a conservative valuation of assets is required. This prohibits companies from listing assets on their balance sheets when values are uncertain.

Assignment
The legal transfer of one person’s interest in an insurance policy to another person; also the form imprinted which, when completed and signed by the registered policy owner, authorizes the transfer into the name of a new owner (designated as the "assignee"). The assignment also usually provides for the granting by the registered owner of power of attorney to another person to accomplish the transfer. Assignments are often executed by the registered owner "in blank", with the name of the assignee and the person granted power of attorney filled in subsequently.

Assumption Reinsurance
A reinsurance agreement in which one company permanently transfers full responsibility for a block of policies to another company. After the transfer, the ceding company is no longer a party to the insurance agreement.

Attained Age
The age of an insured at the present point in time. This is often used in reference to an "attained age conversion" when an individual switches product types and is assessed premium rates at the current age versus the age the insured was at the initial contract issue.

Attending Physician Statement (APS)
Statement from a doctor who has treated a proposed insured. This info is used to asses the potential medical risk a proposed insured presents to an insurance company.

Automatic Premium Loan
A loan provision in a life insurance policy allowing any premium not paid by the end of the grace period (usually 30 or 31 days) to be paid automatically through a policy loan if the policy cash value is sufficient.

Automatic Rebalancing
A program that periodically restores to a pre-determined level the percentage of policy value allocated to each sub-account. The Pre-determined level is the allocation initially selected on the application. Clients may rebalance on a quarterly, semi-annually, or annual basis. Election of this feature may occur by completing the appropriate election form. The rebalancing feature is not available if the client has chosen DCA.