The amount paid into a stock, or non-mutual, company for shareholders' interest.

Difference between an asset's purchase price and the price at which it is sold. If the difference is positive it is a capital gain; if negative it is a capital Loss.

Payments to mutual fund shareholders of profits realized on the sales of the funds portfolio securities. Frank Russell Investment Company funds usually pay capital gains in December.

A program for gauging the amount of capital on-hand, the immediate cash, and the long term income needs that would be incurred by survivors upon a person's death. The level of the need is determined by weighing sources of cash after death against continuing obligations.

Net worth; generally, total assets minus total liabilities.

The underwriting insurance company.

The dividend option that provides for the dividend to be sent in cash to the owner on the policy anniversary.

A type of annuity which guarantees that, should the annuitant die before receiving payments equal to the amount paid to establish the annuity, the difference will be refunded to a beneficiary in a lump sum.

The amount of cash available to the owner when a policy is surrendered to the life insurance company. Most of the cash value is also available to policyowners in the form of policy loans.

An asset account on a financial balance sheet representing paper currency, negotiable money orders, checks, bank balances and all debt obligations coming due within one year.

The originating insurance company when a risk has been transferred to a reinsurance company.

A statement issued to individuals insured under a group insurance policy, setting forth essential provisions relating to their insurance coverage.

A highly-negotiable short-term investment vehicle that is characterized by its set date of maturity, rate of interest, and its wide acceptance among investors, companies and institutions.

A professional designation conferred by the International Society of Certified Employee Benefit Specialists and the Wharton School of the University of Pennsylvania to candidates who pass examinations demonstrating their in-depth knowledge and insights, as well as commitment and dedication, to the field of employee benefits.

A professional designation conferred by the College of Financial Planning to candidates who pass examinations demonstrating a high level of competence in the analysis and development of client-oriented personal financial plans. To qualify for this designation, a person must meet both educational and work experience requirements.

A contract provision that allows the owner of the insurance policy to change the beneficiary whenever desired, unless the beneficiary has been designated as irrevocable. In which case, the beneficiary's written permission would be required before a change could take place.

A provision or rider allowing the owner of a policy to change the insured (with evidence of insurability). This provision may be included in a life contract and may involve additional charges. The provision is most useful in business situations where an insured employee terminates employment and coverage is then required on the life of the replacement. The change eliminates new acquisition expenses and provides coverage at the new-insured's age when the policy was originally issued. Substantial changes may cause the policy to be classified as a Modified Endowment Contract.

A change from one plan of permanent insurance to another, whether this involves a greater risk or lesser risk.

A marketing program which utilizes life insurance as part of a charitable giving plan. A donor/insured can make a tax-deductible gift of life insurance, and possibly qualify for simplified underwriting.

A trust that has a charitable, not-for-profit organization as a beneficiary.

A professional designation conferred upon an individual by the American College as a result of the successful completion of financial courses. This designation indicates that the individual has a broad and in-depth knowledge of the financial planning process as well as the various financial products available in the marketplace. ChFC candidates must pass a national exam in insurance, investment, taxation, employee benefit plans, estate planning, accounting, and management.

A professional designation conferred upon an individual by the American College as a result of the attainment of high standards of education and proficiency in the art and science of life underwriting. The CLU program delves deeply into the life insurance business, its place in the economy, its operation and distribution systems, and its investment basis. CLU candidates must pass a national examination that covers life insurance, insurance law, taxation, group benefits, investments, and retirement and estate planning.

A professional designation granted by the American Institute for Property and Liability Underwriters in Malvern, Pennsylvania. Curriculum includes courses in management, economics, accounting and finance.

A gummed sticker sent out when Electronic Funds Transfer or Pre-Authorized Check is activated for payment of premiums, to notify the payor of the amount and date of payments to be withdrawn from the payor's bank account.

A demand presented for payment of the benefit due under the terms of an insurance contract.

Northwestern Mutual's rated underwriting classifications, used to structure pricing. Classes 1-9 range from moderate to major health impairments

Insurance on lives not eligible for coverage at the best premium rates, often because of medical conditions.

An article or added provision in a life insurance contract such as the Suicide Clause or the Incontestability Clause.

A formally executed document that amends a will.

The pledge of a life insurance policy as security for the repayment of a loan, which provides the assignee with rights that are superior to the rights of the original policyowner and beneficiary, to the extent of the obligation owed to the assignee.

An agreement between an employee and employer. The employee, as policyowner, assigns the policy values over to the employer as collateral. The amount assigned is usually equal to the employer's contribution.

A mortality table used by actuaries to determine premium levels by estimating the probability of death at any given age.

A fee or percentage of premium allowed to a salesperson or Financial Representative for services rendered.

A form of property ownership that can be created under the laws of nine (9) states. People that that live or have lived as married persons in the following states may have this type of property: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

The beneficiary's option to take remaining income payments under the settlement payment plan of an annuity or life insurance policy in single lump sum pay-out. The present value of these payments can be commuted to a single lump sum payment.

The present value of a series of future installment payments, primarily used in the context of settlement options.

Northwestern Mutual's family of flexible, blended products. They are whole life insurance policies consisting of permanent and term insurance and/or paid-up additional life insurance. The paid-up additions may be purchased with dividends, additional premiums, or lump sum payments.

The interest earnings rate that would be required on an outside investment or savings account to match a whole life insurance policy's total cash value, after a specific duration of time, in order to "buy term and invest the difference." The calculation involves adjusting the amount of term insurance, each year, so that the combination of the term insurance and the savings account equals the total death benefit on a whole life plan.

An agreement with the applicant who submits a payment along with the insurance application. It defines the conditions and limits on coverage before a policy is actually issued and delivered.

A telephone service that enables an attending physician to submit a medical report on an applicant to Northwestern Mutual at any time.

A legal process during which the court appoints someone to act as conservator and be responsible for the assets of an individual who is no longer mentally competent.

An index of prices used as a measurement of changes in the cost of basic consumer goods and services, as determined monthly by the U.S. Bureau of Labor Statistics.

The time period during which the insurer is not obligated to pay a claim, because of material misrepresentations found in the application (usually two years). A policy becomes "incontestable" when the contestability period is over.

Reserves that provide a margin of safety to assure that a company's assets and liquidity are sufficient to pay claims.

A secondary beneficiary who will receive any policy proceeds remaining unpaid upon the death of the direct beneficiary.

Also referred to as a standby trust. This type of trust operates when a specific event occurs in the future.

The change of one policy to another. See Term Conversion.

A one-time credit given when converting term insurance to permanent insurance. The credit may be based on one or all of three factors: reserves, dividends, or current year's premiums.

A CompLife policy designed specifically for members of the corporate marketplace, offering a lower gross premium on the Term Insurance Benefit and a non-level death benefit schedule with level premium capabilities.

An institution that acts for the benefit of another. A bank acting as a trustee.

The monthly mortality charges on a universal or interest-sensitive whole life plan.

Life insurance issued for use in debtor/creditor transactions to cover the debt, should the debtor die or become disabled. Generally, the debtor pays premiums to the insurer and purchases the coverage as part of a loan transaction.

A strategy to preserve the value of a business when a change of ownership is necessary because of the death or disability of an owner or partner. It typically involves having each partner buy insurance on the lives of the other partners. When a death or disability occurs, the beneficiaries of the proceeds use the cash to secure the deceased/disabled partner's interest in the business.

A provision often found in an irrevocable life insurance trust which gives trust beneficiaries the right to withdraw amounts gifted to the trust for a stated period of time (e.g. 30 days) after the gift has been made. Such a provision is designed so that gifts made to the trust will qualify under the $10,000 (per beneficiary) annual gift tax exclusion. An amount of $20,000 per beneficiary may qualify under the annual exclusion if the donor's spouse joins in the gift. See Irrevocable Trust.

Current interest and mortality rates, rather than historic rates, used in the calculation of life insurance premiums and benefits. It provides the basis for interest-sensitive products such as Universal Life.

One of Northwestern Mutual's blended CompLife policies that can be custom-tailored to accommodate the individual owner's needs and budget concerns.

A general account universal life policy designed for death benefit protection and cash value accumulation. The high level of death benefit and premium flexibility allows you to "customize" the policy to help meet a wide array of insurance objectives, now and in the future.

A general account universal life policy designed to meet long-term death benefit needs. It offers a high level of death benefit and premium flexibility that allows you to match your protection to your insurance needs.