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It can be the amount of insurance coverage industry-wide that is available to meet demand, or, for an individual insurer, the maximum amount of risk it can underwrite which is calculated based on its financial condition. An insurer’s capital proportionate to its exposure to loss is a key measure of its solvency.

Capital Stock

The total amount of stock (common and preferred) authorized to be issued by a corporation.

Captive Agent

A person who represents only one insurance company and who is restricted by agreement from submitting business to any other company unless rejected first by the captive agent’s company.

Cash Balance Plan

Is a defined benefit plan that closely resembles a defined contribution plan that maintains hypothetical individual employee accounts. Benefits accrue through employer contributions to the employee accounts and interest is credited to balances in those accounts. The accounts act as bookkeeping devices monitoring benefit accruals.

Cash Plus Rider (CPR)

Is a rider found typically on whole life insurance that purchases Paid-Up Insurance via single or on-going cash payments. It is implemented to improve cash accumulation performance on interest sensitive whole life policies.

Cash Surrender Value (CSV)

Is the amount of money that would be payable to a policy owner upon surrender of the policy. The cash surrender value is equal to the accumulated cash value less the applicable surrender charges and any outstanding loans and applicable loan interest.

Cash Value

Is the amount of money that has accrued in the insurance policy. It is the sum of the net premium payments and interest credited less the monthly deductions made. The cash value amount is not adjusted for any policy loans or partial withdrawals.

Cash Value Insurance

Is a form of insurance that combines death benefits with an accumulation feature. The buyer of a cash value policy pays more in the early years than for a comparable term insurance. However, the premium paid over and above that which is required for the cost of the death benefit accumulates with interest. If the policy is surrendered before the insured person dies, there may be a cash value paid to the owner. If all premiums are paid, cash value insurance usually stays in force for the whole life of an individual and pays death benefits to the beneficiaries upon the death of the insured. The cash value can be used as loan collateral for borrowing funds at an interest rate specified in the policy. Any outstanding loans are deducted from policy proceeds at death or at policy surrender.


To transfer the exposure to a potential loss or losses to another insurer or reinsurer.

Ceding Company

Is an insurance company which insures its insurance risks using the services of a reinsurer.


Is a statement issued to individuals insured within a group policy that details the essential provisions of their own coverage.


Change of Insured Rider

Is an additional feature that entitles the policy owner of a Death Benefit Plan, to change the existing insured on a policy by transferring it to the life of a new insured.

Change of Plan Provision


Is the notification to an insurance company that payment of an amount is due based on the terms of a policy.


Is a process undertaken by the NAIC to redefine life company statutory accounting ensuring consistency in the presentation of the companies’ accounts in their annual statements.


Combinations of different kinds of insurance can be purchased. For example, it is possible to buy whole life insurance for lifetime coverage and add term insurance for the period of greatest insurance need. Usually the term insurance protects the individual purchaser’s life, but it also can be bought for their spouse or children.

Contestable Claim

Can be a claim occurring within the first two years of policy issue or additionally can be a term that’s used if unusual conditions surround an insured’s death affecting the claim payment.

Contestable Policy

Is a policy that has a contestable claim affecting a claim payment.

Continuation of Insurance beyond Age 100

Is an extension or coverage granted as long as the policy has not lapsed or been surrendered by the time the insured has reached age 100. The full death benefit will be held and paid to the beneficiary at death. At insured’s age 100, all funds in the variable sub-accounts are moved to the fixed account, to which interest will continue to be credited at the fixed account's guaranteed rate, and the death benefit remains at the insured's age 100 level until the claim is paid. Additionally mortality and expense charges will not be deducted after insured’s age 100, however, loan interest will continue to accrue. This feature is not available in all states.


See Principal.

Conversion Credits

Are credits equivalent to the preceding year's paid term premium that go toward the premium of a new permanent coverage when processing an equal-face-amount conversion.

Convertibility Period

Is the time period during which a policy owner can convert a term insurance policy to a permanent plan of insurance without the requirement to provide any medical evidence.

Convertible Term Insurance

Is a term insurance policy that can be exchanged, at the option of the policyholder and without evidence of insurability, typically for a permanent plan of insurance.

Cost Comparison Indexes

Compare index numbers for similar policies, those which provide essentially the same benefits, with premiums payable for the same length of time. No one company offers the lowest cost at all ages for all kinds and amounts of insurance. A policy with smaller index numbers generally provides better value for money than a similar policy with larger index numbers.

Cost of Insurance (COI)

Is the charge per $1,000 of the net amount at risk (being the difference between the death benefit and account value) on a Universal Life (UL) policy. The charge varies based on age, gender and underwriting class. This charge is deducted from the account value, on a monthly basis.

Coverage Period

Is the period between when the cover starts and when it ends.

Credit Disability Insurance

Is a disability insurance that is issued through a lender or lending agency covering the payment of a loan, an installment purchase, or other financial obligation should an insured sustain a disability.

Credit Life Insurance

Is a term life insurance that is issued through a lender or lending agency covering payment of a loan, an installment purchase, or other financial obligation should the insured die.

Currently Illustrated Basis

The currently illustrated basis lists the insurance company’s current scale of dividends, premiums or benefits. This scale can be altered after the policy is issued and as a result, the actual dividends, premiums or benefits over the years can end up being higher or lower than those originally assumed.

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