The space created between the total death benefit and the cash value of a universal life insurance policy. An automatic increase in the death benefit results when the cash value approaches the initial face amount under Option A. If this space did not exist, the universal life insurance policy would not qualify as a life insurance policy under the definition of life insurance by the Internal Revenue Code (IRC) and would cease to reap the favorable tax treatment afforded life insurance policies by the IRC.
Popular Insurance Terms
Form showing notification that an insurance policy has been renewed with the same provisions, clauses, and benefits of the previous policy. ...
Homeowners policy to cover the owner of a townhouse. ...
Provision in workers compensation insurance under which an employee who incurs an injury in another state, and elects to come under the law of his home state, will retain coverage under the ...
Retirement taken after the normal retirement age. For example, if the normal retirement age is 65 or 70 an employee may continue to work beyond those ages. Normally the election of deferred ...
Bonds issued by the United States Treasury that pay a semiannual interest rate tied to the Treasury auction plus an additional interest rate tied to the rate of inflation during this ...
Same as term Ceding Company: insurance company that transfers a risk to a reinsurance company. ...
Provision in the Federal Tax Code for favorable treatment of an estate. Under the unlimited marital deduction no federal estate tax is imposed on qualified transfers between a husband and ...
In ocean marine insurance, provision stipulating that upon the collision of two or more ships, when all ships are at fault, all owners and shippers having monetary interests in the voyage ...
Scheme to recapture excess pension assets by splitting a qualified plan in two, and terminating one of them. In the mid-1980s, many pension plans became "overfunded" because their ...
Have a question or comment?
We're here to help.