Glossary of Insurance Related Terms

General account

An undivided account in which life and health insurers maintain funds from guaranteed insurance products such as ordinary life insurance.

General Agency System

Type of life insurance marketing system in which the general agent is an independent businessperson who represents only one insurer, is in charge of a territory, and is responsible for hiring, training, and motivating new agents.

General Agent (GA)

An individual appointed by a Life or Health insurer to administer its business in a given territory. He is responsible for building his own agency and service force and is compensated on a commission basis, although he possibly has some additional expense allowances. (LI,H)

General Agents and Managers Conference

An association of insurance general agents and managers affiliated with the National Association of Life Underwriters. (LI,H)

Generation Skipping Tax

A transfer tax imposed on a gift or inheritance to those at least two generations younger than the person making the transfer.

GI benefit

A supplementary life insurance policy benefit that gives the policyowner the right to purchase additional insurance of the same type as the basic policy without supplying evidence of the insured’s insurability.

GIC

A retirement plan funding vehicle under which the insurer accepts a single deposit from the plan sponsor and guarantees to pay a specified interest rate on the funds deposited during a specified time period.

Gift

A voluntary transfer of property to another person, made without receiving consideration in return.

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.

Grace period provision

A policy provision that allows the policyowner to pay a renewal premium within a stated grace period following the renewal premium due date.

Graded Commission Scale

A commission scale providing for payment of a high first-year commission and lower renewal commissions.

Graded Death Benefits

A provision in Life Insurance contracts for death benefits that, in the early years of the contract, are less than the face amount of the policy but that increase with the passage of time. Most commonly found in juvenile policies issued at or near age zero. (LI)

Graded Premium

A modified Life Insurance policy for which the initial premium is low, and then increases in steps over a period of time (usually five years), after which it becomes a level premium. (LI)

Graded-premium whole life insurance

A type of whole life insurance in which premiums increase at specified points in time, ultimately reaching a level premium amount payable for the remaining life of the policy. Graded-premium whole life generally features at least three levels of premium amounts.

Graduated Life Table

A mortality table in which the experience has been smoothed out by formula. (LI)

Gross Estate

All of the assets and liabilities owned at death.

Gross Negligence

The failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another.

Gross Premium

The full amount of premium, ignoring taxes or deductions.

Gross Rate

The sum of the pure premium and a loading element.

Group Certificate

The document provided to each member of a group plan. It shows the benefits provided under the group contract issued to the employer or other insured. (LI,H)

Group Contract

A contract of insurance made with an employer or other entity that covers a group of persons identified as individuals by reference to their relationship to the entity.

Group Credit Insurance

Insurance on the Life or Health of debtors of a creditor, payable for reduction or extinguishment of the debts in case of the disability or death of the debtor. (LI,H)

Group Creditor Life Insurance

Life insurance provided to debtors by a lending institution to provide for the cancellation of any outstanding debt should the borrower die. Normally, term insurance is limited to the amount of the loan.

Group insurance

Insurance that provides coverage for a number of people under one contract, called a master contract.

Group Life Insurance

Life insurance, usually without medical examination, on a group of people under a master policy. It is typically issued to an employer for the benefit of employees, or to members of an association, for example a professional membership group. The individual members of the group hold certificates as evidence of their insurance.

Group Ordinary Life Insurance

Group insurance plan providing life insurance for employees. Traditional whole life policy is split into decreasing insurance protection and increasing cash values.

Group Paid-Up Life Insurance

Accumulating units of single premium whole life insurance and decreasing term insurance, which together equal the face amount of the policy. Provided through a group life insurance plan.

Group Permanent Life Insurance

A form of Life Insurance under which members of a group are provided one of several plans of Permanent Life Insurance on a group basis instead of the more usual plan of Term Life Insurance. (LI)

Group Permanent Plan

Type of pension plan in which cash value life insurance is issued on a group basis and cash values in each policy are used to pay retirement benefits when a worker retires.

Group Term Life Insurance

Most common form of group life insurance. Yearly renewable term insurance on employees during their working careers.

Group Universal Life Products (GULP)

Universal life insurance plans sold to members of a group, such as individual employees of an employer. There are some differences between GULP plans and individual universal life plans -- for instance, GULP expense charges generally are lower than those assessed against individual policies.

Guaranteed Insurability

An option that permits the policy holder to buy additional stated amounts of life insurance at stated times in the future without evidence of insurability.

Guaranteed insurability (GI) benefit

A supplementary life insurance policy benefit that gives the policyowner the right to purchase additional insurance of the same type as the basic policy without supplying evidence of the insured’s insurability.

Guaranteed investment contract (GIC)

A retirement plan funding vehicle under which the insurer accepts a single deposit from the plan sponsor and guarantees to pay a specified interest rate on the funds deposited during a specified time period.

Guaranteed Premiums

The guaranteed maximum payment for the purchased policy.

Guaranteed Purchase Option

Benefit that can be added to a life insurance policy permitting the insured to purchase additional amounts of life insurance at specified times in the future without requiring evidence of insurability.

Guaranteed Renewable

A contract that the insured has the right to continue in force by the timely payment of premiums (1) until at least age 50 or (2) in the case of a policy issued after age 44 for at least five years from its date of issue, during which period the insurer has no right to make unilaterally any change in any provision of the contract while the contract is in force, except that the insurer may make changes in premium rate by classes.

Guaranteed Renewable Contract

A contract that the insured person or entity has the right to continue in force by the timely payment of premiums for a substantial period of time, during which period the insurer has no right to make unilaterally any change in any provision of the contract, while the contract is in force, other than a change in the premium rate for classes of policy holders.

Guaranteed renewable policy

An individual health insurance policy that the insurer is required to renew—as long as premiums are paid—at least until the insured attains the age limit specified in the policy. The insurer may increase the premium rate for any class of guaranteed renewable policies.

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.

Guaranty Fund

A fund, derived from assessments against solvent insurance companies, to absorb losses of claimants against insolvent insurance companies.

Guertin Laws

The valuation and nonforfeiture laws which have been standard in all states since 1947, named for Alfred Guertin, then actuary of the New Jersey Insurance Department and head of the NAIC committee which developed the model bill for these laws. The benefits, as printed in a life insurance policy, that the insurer guarantees to the policyowner if the policyowner stops paying premiums. These amounts may be used in a variety of nonforfeiture options.

Guideline Premium

A Universal Life insurance term used to describe the maximum premium that may be paid while still qualifying as life insurance under the federal Internal Revenue Code. (LI)