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Glossary of Life Insurance Terms
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Definitions written so you can actually understand them. Browse alphabetically, or search for a word or term by typing it into the search field located in the top navigation by the GO button (above right).
Maintenance Expenses
What it costs an insurance company to keep a policy in force. These expenses include the cost of processing premium payments and making policy dividend payments in addition to the time that agents and customer service personnel spend servicing and conserving policies that are in force. Maintentance expenses are part of the operational expenses considered when the loading on a policy is calculated.
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Mandatory Securities Valuation Reserve (MSVR)
A liability account that is designed to absorb a portion of the capital gains and losses occurring in the investments underlying an insurance policy.
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Master Contract
The legal contract between a group insurance policyholder and the insurance company issuing the insurance. The master contract serves to insure multiple people under a single contract. Also called the master policy. See also certificate of insurance.
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Material Fact
Any relevant fact that may affect a life insurance company's underwriting decision regarding the issuing or rating a policy.
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Material Misrepresentation
A misstatement made by a life insurance applicant, intentional or not, that affects how the insurance company weighs and accepts the risk associated with that applicant’s policy. The threshold for a material misrepresentation is, if the misrepresentation had not been made and the truth had been known, the insurer would not have issued the policy or would have issued the policy on a different basis.
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Matured Endowment
An endowment-type insurance policy that has reached the end of its term during the lifetime of the insured and is therefore payable.
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Minimum Deposit Business
A way of paying policy premiums through loans on the same policy. The policyholder instructs the insurance company to pay the premium out of the policy’s cash value and to bill the policyholder for the premium only if the cash value is insufficient to pay the premium.
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Misrepresentation
Any false or misleading statement made over the course of purchasing a life insurance policy. It could be made on the part of the agent who is trying to induce a prospect to purchase a policy, or on the part of the applicant who is trying to obtain insurance he may not qualify for.
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Misstatement Of Age Provision
Wording in a life insurance policy that specifies the action the insurance company will take if, at the policyholder’s death, it’s discovered that the policyholder’s age was misstated in the application and that the misstatement resulted in an incorrect premium being calculated for the policy. The action specified is generally a recalculation of the benefits now due.
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Mode of Premium Payment
The frequency with which life insurance premiums are paid, be it annually, quarterly or monthly.
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Modified Net Premiums
Net life insurance premium amounts that change over time. Generally these premiums are lower for the first year, then in subsequent years go up.
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Modified-Premium Whole Life Insurance
Whole life insurance which features a lower than normal premium for a specified initial period, such as five years. After the initial period, the premium then increases to a stated amount that is somewhat higher than usual. This higher premium is then payable for the life of the policy.
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Morbidity
Sickness, disability, or failure of health.
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Mortality Charge
This cost refers only to the insurance protection element of a universal life policy. A morality charged is based on the net amount at risk under the policy, the insured's risk classification at the time of policy purchase, and the insured's current age.
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Mortality Curve
The change in mortality rates from age to age as represented by a line graph.
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Mortality Experience
Used as a check on predictive mortality measurements, mortality experience is the actual number of deaths occurring among given groups of people.
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Mortality Rate
The frequency with which death has been shown to occur among defined groups of people. The premium that a person pays for life insurance is based in part on the mortality rate for that person's age group.
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Mortality Table
A chart used by life insurance companies to identify the rates of death occurring among given groups of people categorized by age.
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Mortgage Redemption Insurance
A decreasing term life insurance plan that covers the life of someone with a mortgage. If the policyholder dies during the term of insurance, the policy proceeds will pay the remaining amount of the mortgage loan.
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Mutual Benefit Method
Once used by fraternal orders or guilds, this was an early form of funding life insurance plans. With the mutual method, a promised death benefit was provided by charging participating members an equal amount after the death of an insured member. Also called the post-death assessment method. See also assessment method.
Mutual Insurance Company
A life insurance company owned by the policyholders rather than stockholders.
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Mutualization
The process of converting an insurance company owned by stockholders to one owned by policyholders.
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Life insurance...because
life is unpredictable. |
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