March 17, 2018

Life Insurance Glossary G


Life Insurance Glossary provided by LOMA’s Glossary of Insurance and Financial Services Terms


GA. See general agent.

GAAP. See generally accepted accounting principles.

GAAP accounting records. Accounting records, designed for financial reporting to investors and the public at large, that focus on showing the company’s financial stability along with its profitability. GAAP accounting records are prepared according to generally accepted accounting principles. Contrast with statutory accounting records.

gatekeeper. A term used to describe the primary care physician’s role in a managed health care plan; this role is to authorize all medical services delivered to the insured by other physicians or health care providers.

gender-based mortality table. See sex-distinct mortality table.

general account. An undivided investment account in which insurers maintain funds that support contractual obligations for guaranteed insurance products such as whole life insurance or fixed-rate annuities. Contrast with separate account.

general agency system. A type of ordinary agency insurance distribution system wherein general agents establish and maintain field sales offices for an insurance company. See also general agent and ordinary agency distribution system.

general agent (GA). An independent businessperson who is under contract to an insurance company and whose primary function is to build and manage a field office of full-time career agents focused on distributing the products of a single company within a defined territory. See also general agency system.

general and administrative expenses. For an insurance company, the costs incurred as a result of an insurer’s normal business operations, including both contractual benefit expenses and operating expenses.

generally accepted accounting principles (GAAP). A set of financial accounting standards that all publicly traded companies in the United States and all companies in Canada follow when preparing their financial statements. Contrast with statutory accounting practices.

general management risk. See C-4 risk.

general manager. See branch manager.

GI benefit. See guaranteed insurability benefit.

GIC. See guaranteed investment contract.

GIS. See Guaranteed Income Supplement.

GLB Act. See Gramm-Leach-Bliley Act.

going-concern concept. An accounting principle that requires a company’s accounting records to reflect the assumption that the company will continue to operate indefinitely.

government bonds. Bonds issued by governments—including federal, state, provincial, county, city, and local governments. See also bonds.

grace period. (1) For insurance premium payments, a specified length of time following a premium due date within which the renewal premium may be paid without penalty. The length of the grace period is specified in a grace period provision that is found in a life insurance, health insurance, or annuity policy. (2) For purchases made on credit, aperiod of time between the date of a purchase and the date the lender begins to charge interest during which no interest accrues.

graded-premium policy. A type of modified-premium whole life policy that calls for three or more levels of annual premium payment amounts, increasing at specified points in time—such as every three years—until reaching the amount to be paid as a level premium for the rest of the life of the policy.

Gramm-Leach-Bliley (GLB) Act. An act passed by the U.S. Congress in 1999, which allows convergence among the traditionally separate components of the financial services industry—banks, securities firms, and insurance companies. The GLB Act permits financial institutions to affiliate in new ways and expands the ability of national banks to market insurance products. Also known as Financial Services Modernization Act.

gross annuity cost. A monetary amount equal to the present value of future periodic income payments under an annuity contract, calculated on a gross basis, with a specific provision for expense loading. Contrast with net annuity cost.

gross debt. For purposes of determining the benefit payable under a consumer credit insurance policy, the total of the remaining scheduled payments on a given date.

gross estate. The total value of all property in which a deceased person—known as the decedent—had an ownership interest.

gross investment income. Total investment income actually earned, on an accrual-basis and before deducting expenses and amortization, during a specified reporting period.

gross leverage ratio. See insurance leverage ratio.

gross premium. The amount of money an insurer actually charges for an insurance policy. The gross premium is equal to the policy’s net premium plus the loading. Contrast with net premiumSee also loading.

gross reserve. A reserve developed using a gross reserve valuation method.

gross reserve valuation method. A method of computing reserves which makes explicit provision for product-related expenses or loading.

group annuity. A retirement plan funding arrangement that provides periodic income payments at retirement to a group of people under a single group contract. See alsogroup deferred annuitydeposit administration contract, and immediate participation guarantee (IPG) contract.

group creditor life insurance. Insurance issued to a creditor, such as a bank, to insure the lives of the creditor’s current and future debtors.

group deferred annuity. A retirement plan funding vehicle under which contributions made on behalf of each plan participant in a group are used to purchase a series of single-premium deferred annuities for the participant. When the participant retires, the deferred annuities provide the promised benefits. Contrast with immediate participation guarantee (IPG) contract.

Group Health Insurance Definition and Group Health Insurance Standard Provisions Model Act. A National Association of Insurance Commissioners (NAIC) model law that defines the types of groups eligible for group health insurance and specifies standard provisions that group health insurance policies must include.

Group Health Insurance Mandatory Conversion Privilege Model Act. A National Association of Insurance Commissioners (NAIC) model law that requires specified types of group health insurance policies to give insureds the right to obtain individual health insurance without providing evidence of insurability in specified situations.

group insurance. A method of providing life or health insurance coverage for a group of people under one insurance contract, called a master contractSee also master contract and policyholder.

group insured. An individual insured by a group insurance policy.

Group Life Insurance Definition and Group Life Insurance Standard Provisions Model Act. A National Association of Insurance Commissioners (NAIC) model law that defines the types of groups that are eligible for group life insurance and specifies standard provisions that group life insurance policies must include.

group plan installation. In group insurance, all the activities that occur from the time a prospective buyer decides to purchase a group insurance policy to the time the coverage is fully explained to the group members and the master contract and its individual certificates are issued. See also master contract and certificate of insurance.

group policyholder. See policyholder.

group representative. A salaried insurance company employee who is trained to market and service group insurance products.

guaranteed death benefit. In a variable universal life insurance policy, a minimum death benefit amount that will be provided regardless of the underlying policy’s cash value at the time of the death of the insured.

guaranteed income contract. See guaranteed investment contract (GIC).

Guaranteed Income Supplement (GIS). In Canada, a government-provided supplemental monthly benefit available to Old Age Security (OAS) recipients who receive less income than a stated maximum amount.

guaranteed insurability (GI) benefit. A supplementary life insurance policy benefit often provided through a policy rider that gives the policyowner the right to purchase additional insurance of the same type as the life insurance policy that provides the GI benefit on specified option dates. Also known as guaranteed insurability option (GIO).

guaranteed interest contract. See guaranteed investment contract (GIC).

guaranteed investment contract (GIC). A retirement plan funding vehicle under which an insurer accepts a single deposit from the group plan sponsor for a specified period. The insurer invests the funds, and guarantees the plan sponsor at least a specified investment return. Also known as guaranteed interest contract and guaranteed income contract.

guaranteed-issue insurance product. An insurance product designed so that every eligible member of a particular group of proposed insureds who applies for and meets specified conditions is automatically issued a policy, and no individual underwriting takes place.

guaranteed maximum mortality rate. In a universal life (UL) insurance policy, an upper limit on the monthly mortality charge an insurer is permitted to apply to the policy. See also mortality rate.

guaranteed minimum payout annuity. A type of annuity contract that promises to pay a specified minimum dollar amount or a specified minimum number of payments. The minimum payout can take the form of a lump sum or installments.

guaranteed purchase option. A policy provision sometimes included in long-term care (LTC) insurance policies that allows an insured person to increase the original daily benefit amount at intervals specified in the policy without having to provide evidence of insurability.

guaranteed renewable policy. An individual health insurance policy that requires the insurer to renew the policy—as long as premium payments are made—at least until the insured attains a specified age. The insurer can change premium rates for broad classes of insureds but not for an individual insured. Contrast with noncancellable and guaranteed renewable policy.

guaranty association. In the United States, an organization that is composed of all the life insurance companies operating in a state and that is responsible for covering the financial obligations of member companies that become insolvent.

guaranty association disclaimer. In the United States, a document that notifies the purchaser of an insurance or annuity contract of the existence of the state life and health guaranty association and that, in the event of the insurer’s insolvency, the purchaser may not be totally protected by the guaranty association.

guaranty-fund assessment. A charge payable by financially-sound insurers that are members of a state guaranty association as a contribution toward the customer obligations of a failed member insurer.

Guidelines Governing Group Accident and Sickness Insurance. In Canada, Superintendent’s Guidelines that regulate several aspects of group health insurance contracts, including the types of groups to which a group health insurance contract may be issued and the particulars that must be included in the certificate issued to each person insured by the contract.

Guide to Buying Life Insurance. A written statement developed by the Canadian Life and Health Insurance Association (CLHIA) that describes all of the types of life insurance available, so that a prospect for life insurance can compare the advantages and disadvantages of each type of policy. See also Buyer’s Guide.



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