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valuation mortality tables
Mortality tables developed and published as industry-wide standards for
computing the values of policy reserves. These tables usually have wide margins
of safety, indicating much higher rates of mortality than do the tables that
insurers use for calculating premiums.
The net annual premium used to calculate reserves. The valuation premium is
most often used to describe the GAAP net premium.
A contract under which the amount of the benefit is set in advance. A life
insurance policy is a valued contract. See also contract of indemnity.
In pension and employee-benefit terms, a benefit that a plan participant is
entitled to receive if the participant leaves the plan. By contrast, nonvested
benefits would be forfeited by the participant upon leaving the plan. A
participant's benefits become vested after a certain number of years of
participation in a plan.
A contract that is not valid. For example, a life insurance contract that lacks
insurable interest is void for reasons of public policy.
voluntary plan termination
The curtailment or termination of a pension plan with the curtailment or
termination being initiated by the plan sponsor. Contrast with involuntary plan
termination. See also distress termination and standard plan termination.
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(1) In medical expense insurance, a prescribed amount of time following policy issue
during which the insured's medical expenses are not covered by the policy. Such
waiting periods usually last from 14 to 30 days following policy issue and
normally apply only to medical expenses arising from sickness, not from
accidents. (2) In disability income insurance, a specified amount of time,
beginning with the onset of the disability, during which benefits are not payable.
Such waiting periods may last from seven days to six months. The waiting period
in a disability income insurance policy is sometimes called the elimination period
or the probationary period. (3) In a group insurance plan, the length of time that a
new group member must wait before being eligible to join the group plan. Also
called a probationary period.
waiver of deductible provision
A provision found in some major medical coverages that waives a claimant's
initial deductible if the claimant's medical expenses are the result of an accidental
waiver of premium for disability (WP) benefit
A rider or a policy provision under which the insurer promises to give up its right
to collect the policy's premium if the policyowner becomes unable to work
because of an accident or injury. The waiver of premium for disability benefit
remains in effect as long as the policyowner is disabled.
waiver of premium for payor benefit
A rider or provision often included in juvenile policies which provides that the
insurer will give up its right to collect the policy's premiums if the adult
policyowner, not the insured child, dies or becomes disabled.
war exclusion provision
A life insurance policy provision that limits an insurer's liability to pay a death
benefit if the insured's death is connected with war or military service. See result
clause and status cause.
weekly indemnity plan
A type of short-term disability income insurance plan which typically pays a
weekly benefit equal to a stated dollar amount or a percentage, such as 60
percent, of the insured person's earnings.
Voluntary termination of an insurance contract by the policyowner. See also
A life insurance policy provision that permits the policyowner to reduce the
amount in the policy's cash value or accumulated value by taking up to that
amount in cash. This provision is often included in universal life policies and
annuity policies. Also known as a partial surrender provision.
Government-mandated insurance that provides benefits to covered employees
and their dependents if the employee suffers job-related injury, disease, or death.
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Yearly renewable term (YRT) insurance
Term life insurance that gives the policyowner the right to continue the coverage
at the end of each year. This renewal right continues for a specified number of
years or until the insured reaches the age specified in the contract. Also called
annually renewable term (ART) insurance.
Year of service
As defined by ERISA in the United States, a 12-month period during which an
employee completes at least 1,000 hours of service to the employer. See also
hour of service.