Enhanced Ordinary Life
Definition of "Enhanced ordinary life"
Modified participating level coverage permanent life insurance policy under which the dividends are credited to the policy, thereby reducing the premiums below that usually charged for an ordinary life insurance policy. The structure of the policy is such that the dividends are used to purchase increments of paid-up additions of permanent life insurance. As the face amount (face of policy) is reduced (usually after 2, 3, or 4 years that the policy is issued), the accumulated paid-up additions are generally sufficient to make up the difference between the reduced face amount of insurance and the initial face amount of insurance purchased. The purpose of this approach is to maintain the death benefit at a level at least equal to the original amount of insurance purchased. Most of these policies guarantee that the death benefit will not fall below the original amount of insurance purchased, regardless of the fact that the dividends prove to be inadequate to purchase sufficient amounts of paid-up additions.
Another approach to the structuring of this product is to stipulate that the face amount of the policy is equal to 50 to 90% of the death benefit. The difference between the face amount and the death benefit is comprised of paid-up additions of permanent insurance and term insurance purchased by the dividends. This procedure will guarantee that the payable death benefit will not fall below that initially purchased. As time goes on, the aggregate paid-up additions should be sufficient so that it is no longer required that term insurance be purchased.
Popular Insurance Terms
Recommendation of medications that should be prescribed for certain ailments. They can be classified as follows: open or voluntary recommends a list of drugs to physicians that is supposed ...
Legislation in a number of states requiring insurers to pay the face amount of a fire insurance policy in case of total loss to a dwelling (or sometimes another specified type of building), ...
Future benefits to be paid to the policyholders and beneficiaries, assigned surpluses, and miscellaneous debts. These primary liabilities take the form of reserves, which must be listed on ...
Plan that provides protection in the event of legal actions resulting from charges of harassment, discrimination, wrongful termination of employment, defamation, and invasion of privacy. ...
U.S. government agency that administers life insurance, health insurance, welfare, mortgage loans, education, pension benefits, and other programs for veterans of the U.S. armed forces. ...
Coverage under the Homeowners Form-4 (HO-4) for the insured's personal property and loss of use against fire and/or lightning; vandalism and/or malicious mischief; windstorm and/or hail; ...
Technique designed to permit the exchange of a life insurance policy that has an outstanding loan charged against it for another life insurance policy on a tax-free basis. The procedure is ...
Stipulation that no claim will be paid until a loss exceeds a flat dollar amount or a given percentage of the amount of insurance in force. After the loss exceeds this dollar amount or ...
Form of inland marine insurance under which an insured is indemnified for damage or destruction of his or her on-premises property if it is due to radioactive material stored or used within ...
Have a question or comment?
We're here to help.