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
Policy that comes into existence or adjusts the amount of coverage to provide protection for newly acquired or increasing values of an insured's real or personal property. ...
Vehicle that is available to anyone in the United States as a means for savings in a tax-exempt fashion for college, graduate, or professional schools or other eligible accredited business, ...
Ratio of the company's investment in noninvestment grade bonds dividend to its adjusted surplus. This ratio shows how vulnerable the company's surplus is to the market fluctuations in ...
In insurance, volume of premiums written. Also describes commercial activities with the profit motive as the goal of the organization. Commercial insurance companies are organized with the ...
Physical contact of an automobile with another inanimate object resulting in damage to the insured car. Insurance coverage is available to provide protection against this occurrence. ...
Insurance contract that cannot be cancelled by the insurance company. Since the insurance policy is a UNILATERAL CONTRACT instead of a BILATERAL CONTRACT, the INSURED may cancel at will. ...
Demographic designation used in life insurance to calculate premium rates for life and health insurance and annuity contracts. Since females have a longer life expectancy than males of the ...
Clause in an insurance policy that describes the administration and submission of claims procedure. ...
Funds set aside by an insurance company to pay incurred losses which have not yet been paid. ...
Have a question or comment?
We're here to help.