Equity Indexed Universal Life Insurance
Definition of "Equity indexed universal life insurance"
Insurance in which most of the premium (generally 80 to 90%) is invested in traditional fixed income securities. The remainder of the premium is invested in call option contracts tied to a stipulated stock index. In those instances where there is an increase in the market, exercising of the option contracts takes place and a given percentage of the gain is then credited to the policy. Conversely, should the market decline, the option contracts are said to expire worthlessly and the policy is credited with the minimum guaranteed rate. This type of policy may be suitable for that person who has an interest in purchasing a VARIABLE LIFE INSURANCE policy but is not at ease in participating in the equities market. This type of person could have the best of both worlds: the potential high returns of the equities market without the risk to the initial investment (principal).
Popular Insurance Terms
Standard Commercial Property Floater form covering death or damage to livestock as the result of insured perils such as fire, lightning, explosion, smoke, wind, hail, aircraft, earth quake, ...
Calculations involving the mortality rate of a company's insureds and the rate of return on the company's investments. It is used in calculating the prospective reserve. ...
Same as term Explosion, Collapse, and Underground Exclusion: inherent danger resulting from certain construction procedures that are excluded from general business liability policies. ...
List of the values of specific medical procedures in comparison with other medical procedures. ...
Rule adopted by the financial accounting standards board that requires that obligations owed to re-insurers under multiyear insurance contracts must be reported as liabilities by the ceding ...
Provision commonly found in fire insurance contracts. If the insured knows that a hazard is increased, most property contracts permit the insurance company to suspend or terminate coverage. ...
Maximum amount of insurance coverage that an insurance company will underwrite in a particular geographic area. ...
Present value of a series of payments such that the first payment is due one period hence, the second payment two periods hence, and so forth. The continued payment is contingent upon the ...
Entitlement of a pension plan participant (employee) to receive full benefits at normal retirement age, or a reduced benefit upon early retirement, whether or not the participant still ...
Have a question or comment?
We're here to help.