Common term for a marital trust. Generally used as an estate tax savings vehicle for couples whose assets are valued above the federal estate tax exclusion amount.

The transfer of all incidents of ownership of a life insurance policy to a separate entity. The assignee becomes the new owner.

A checking account that is automatically established for beneficiaries receiving proceeds of $10,000 or more from a death claim. Monies are placed in a "money market" type of fund and the cash may be withdrawn all at once, or gradually, by writing checks (minimum check $300, minimum balance $3,000). There is no charge for checks or check writing. Only the beneficiary has access to the account and proceeds from other companies and outside funds may be deposited into the account (subject to a service charge and any applicable premium tax). The money earns interest at a competitive rate, and the beneficiary is not under pressure to make important financial decisions during a difficult time.

The period of the policy during which cash value is accumulated through premium payments and investment return.

A unit of measurement used in determining the value of a variable annuity contract before the effective date of a payment plan.

The cost of placing new business. It typically includes Financial Representative commissions, fees for medical and credit reports, underwriting, marketing, and other administrative expenses. In today's competitive environment, insurers strive to keep acquisition costs at a minimum.

Expenses incurred by an insurance company in acquiring new business. The expenses include the costs of commissions, underwriting, medical examinations, administrative and general sales support. These expenses typically exceed the amount of the first year's premium.

Someone who benefits from an employer-sponsored retirement plan. An employer indicates the employee's participant status on the W-2 wage statement.

A life insurance product's dividend performance over past years. Ten and twenty year dividend histories for whole life policies at issue ages 25, 35, 45 and 55 are published yearly in Best's Flitcraft Compend. Currently, an age 35 and 55 historic comparison with interest-adjusted net cost rankings is published each year in Best's Review.

A mathematician employed by an insurance company to calculate premiums, reserves, dividends, and insurance, pension, and annuity rates, using risk factors obtained from experience tables. These tables are based both on the company's history of insurance claims and other industry and general statistical data.

Premiums applied directly towards the purchase of paid-up additional life insurance on certain CompLife plans. Additional Premiums can be scheduled in advance, at issue, and/or any time after the issue, possibly with additional underwriting.

An optional component of Estate CompLife and Joint CompLife that provides protection in addition to the base (whole life) amount. It is initially comprised entirely of term insurance. Over time, the term element within the Additional Protection component is gradually replaced with paid-up additional (permanent) insurance through the application of dividends, additional premiums, and/or lump sum payments.

An optional policy benefit which guarantees the insured the right to buy more life insurance at future dates without providing further evidence of insurability. The additional coverage may be purchased at attained ages (policy anniversaries nearest the insured's 22nd, 25th, 28th, 31st, 34th, 37th, and 40th birthdays) or after major life events (marriage, child's birth/adoption). A similar benefit is also available on DI policies.

Northwestern Mutual's most popular blended product, made up of a permanent whole life component and an optional term insurance component. The optional term insurance component (Term Insurance Benefit) is replaced over time with permanent paid-up additional insurance. The paid-up additions may be purchased by dividends, additional premiums and/or lump sum payments.

A form of ordinary life insurance which allows the policyowner to change protection from term to whole life and back, raise or lower the amount of the coverage, and increase or decrease the premium. Conceptually, the desired premium level and face amount determine the type of coverage and guarantee period.

The management of an estate, including collection of estate assets, distribution of assets to appropriate parties (creditors and beneficiaries) and the complete accounting of an estate.

Usually a fixed-dollar amount per year, used to pay for record keeping and policy reports.

Services provided by an insurer or its subsidiary on a contract basis. Services may include actuarial, plan design, claim handling, benefit communications, financial advice, preparation of data for government reports, stop-loss coverage, etc. The insurer provides these services for self-funded plans.

Individual appointed by the court to manage the estate of a person who dies without a will.

Annual premiums paid in advance at a discount. The interest earned on the amount deposited before the premium due date reduces the cost of the premiums.

The tendency of persons with poorer-than-average health expectations (higher risk) to apply for or continue insurance coverage to a greater extent than persons with average or better-than-average health expectations (lesser risk).

The midpoint between birthdays. At this time, the premium rate changes according to the age at the next birthday.

Method for pricing substandard risks which adds years to an insured's actual age to compensate for a sub-Select risk classification. Using the older age allows the insured to be treated as a Select risk.

A life insurance salesperson who represents an insurance company.

In reference to Adjustable CompLife or other blended plan, it is a policy mixed without a term element and comprised entirely of permanent, whole life insurance.

This refers to the practice of using non-cash sources, such as the annual dividend or policy values, to cover or reduce the amount of premium due and payable on an out-of-pocket basis.

An institution that offers professional certification and graduate degree education to men and women seeking career growth in today's sophisticated and competitive financial services marketplace. The college awards the CLU, RHU and ChFC designations.

Located in Washington, DC, it is an association of both participating and non-participating life insurers who are concerned with issues that affect the life insurance industry on the federal, state, or local level. It lobbies on behalf of the industry and the information it compiles is available to the public.

A national professional organization dedicated to maintaining the high ethical standards in the life insurance and financial services industry, and to providing programs for its members to continue their professional education through sponsorship of its own education activities as well as American College courses.

An accounting procedure that accounts for depreciation by gradually reducing the cost value of an asset through periodic charges to income.

The insurance company's death claim risk on a policy at a point in time. Essentially, it is the difference between the total insurance benefit and the policy's cash value (reserve, account value). The net amount-at-risk is used to determine the mortality charge assessed to the policy at a given point.

Refers to the date one year (or more) following the effective date of the contract.

The annual exclusion allows an individual to give up to $10,000 per year, per recipient, without paying gift tax or using any of the unified credit. The amount of the annual exclusion is adjusted annually for inflation.

Under current law, individuals are allowed to give up to $10,000 each year (married couples can give up to $20,000) to as many recipients as they choose. The gift must be one of "present interest"—the recipient must be given an immediate right to possession or enjoyment of the gift.

Individual statements, providing specific policy information and values, which are sent to policyowners on each contract anniversary.

In disability insurance, an optional benefit that provides comprehensive inflation protection. AIB will increase the face amount of a Northwestern Mutual Disability Income policy before, during, and after a disability to reflect any increase in the Consumer Price Index. Increases apply to benefits for both total and partial disabilities.

One of five different premium structures available, depending on which Disability Income plan is selected. It is renewable on an annual basis, and starts at a rate lower than level or step rate and increases with the insured's attained age.

The person on whose life the annuity values are based.

The period of the policy when the amount built-up or accumulated during the accumulation phase is paid out to the annuitant in the form of systematic payments.

To begin a series of payments from an annuity. An amount and payout schedule is selected and accumulated capital is paid to the annuitant or, in some cases, to a beneficiary. This term also refers to the settlement of a life insurance policy under the contract's annuity options.

A contract sold by a life insurance company that provides fixed or variable payments to an annuitant, either immediately or at a future date, usually to supplement retirement income. The income is paid from a stipulated date either until the death of the annuitant or for a specified number of years. Annuities can be classified as either deferred or immediate.

A variable annuity unit held during the variable annuity payout period.

Often listed on annual statements, they represent the value of a company's total annuity policies and fund deposits in force.

The person applying for the insurance policy. The applicant is not necessarily the owner or the insured.

A form which must be completed by an individual who is requesting that life, disability or annuity insurance be issued. The applicant provides personal information about finances and health, and the underwriter uses the information to determine the appropriate classification and rate for the proposed insured.

A supplement to the application which documents that the non-guaranteed elements of the contract have been disclosed to the applicant during the sales process.

A life insurance company that assesses premiums to its members when it is required to pay death claims. It underwrites group plans for fraternal societies, associations and professional organizations.

An item having commercial or exchange value that is owned by an individual, business or institution. Assets owned by life insurance companies are comprised largely of financial instruments and are used to back life and health insurance and annuity obligations. These assets are purchased with premiums and investment earnings.

A conditional reserve required to cover potential future investment losses, other than those caused by changes in market interest rates.

The person who gains certain rights to an insurance policy under an absolute or collateral assignment.

Generally, a transfer of a property, or right therein, to a separate entity. In life insurance, it is the transfer of a policy's ownership rights to a third-party.

An employee of the agency's group corporation. The Associate Employee Benefit Specialist's responsibilities involve the selling and servicing of employee benefit programs.

A full-time employee of a Financial Representative. The Financial Representative is responsible for the selection, training and supervision of the associate agent. An associate agent's responsibilities may include processing applications, collecting initial premiums and providing service to policyowners.

A designation available to actuaries who pass a series of examinations on the mathematics of insurance. This designation indicates that the individual has developed an understanding of the basic mathematics underlying actuarial science and of the application of fundamental mathematical concepts to technical actuarial concepts. The Society of Actuaries prepares the course materials and administers the national exams.

This refers to the insured's age, at any given point, which is rounded up to the next age six months after each birthday.

Information from a proposed insured's physician covering medical history and results of medical examinations. It is used to determine the appropriate underwriting classification for the proposed insured.

Permission from the policyowner which allows release of information to a named party.

A policy non-forfeiture provision which is typically elected at the time of application. It specifies that any unpaid premium will automatically be paid through a premium loan at the end of the grace period.

A mutual fund billing term that represents the accumulation of each daily market value divided by the applicable number of days of investment.