Glossary of Insurance Related Terms

Valuation

The process of calculating the proper values of an insurer’s assets, liabilities, and capital and surplus.

Values

Used in Life Insurance terminology as a shortened term for nonforfeiture values. See Nonforfeiture Values. (LI)

Variable Contracts

Contracts such as variable annuities or variable life insurance which contain an element of risk for the investor depending on the performance of the separate account backing the contract. Generally, these contracts are products of insurers but regulated by both state insurance departments and the federal government. (LI,H)

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.

Variable Universal Life

A combination of the features of Variable Life Insurance and Universal Life Insurance under the same contract. Benefits are variable based on the value of equity investments, and premiums and benefits are adjustable at the option of the policyholder. (LI)

Vesting

The attainment of a benefit right by a participant, attributable to employer contributions, that is not contingent upon a participant's continuation in specified employment. That form of vesting under which rights to vested benefits are acquired by a participant commencing upon a fulfillment of specified requirements, usually, reaching a certain age or number of years of service or membership. The attainment of a benefit right by a participant, attributable to employer contributions, that is not contingent upon a participant's continuation in specified employment.A term used in pension or retirement plans. With immediate vesting an employee's right to benefits begin as soon as he enters the plan. The attainment of a benefit right by a participant, attributable to employer contributions, that is not contingent upon a participant's continuation in specified employment.