Administrative expenses incurred by a company to maintain and service a policy from year to year, such as billing, record keeping, and dividend crediting.

The amount paid by a mutual fund to an investment adviser for services. The fee may be based on the fund's average assets or on a sliding scale that declines as the dollar amount of the fund increases. The average annual fee industry wide is about one half of one percent of fund assets.

The difference between guaranteed and actual experience. If positive it is, in a sense, profit which may be distributed to policyowners or stockholders. It may also refer to the difference between a company's rate of earnings on its investments and the rate it actually credits to policyowners.

An allocation of a company's fixed expenses to its existing policies. If employed, new policy illustrations can be enhanced because they are based on assumptions which exclude fixed overhead costs.

Transfers of property between spouses that are not subject to tax.

The loan interest rate of variable and increasing whole life products that changes with market conditions. This policy feature results in higher dividends and a greater tax deduction. The Northwestern Mutual contract refers to this option as the Variable Loan Interest Option.

(1) A portfolio consisting of all assets available to investors, with each asset held in proportion to its market value relative to the total market value of all assets.

(2) In the Capital Asset Pricing Model (CAPM), the optimum portfolio of risky assets for all investors. Graphically, it is located at the point of tangency of a line drawn from the risk-free rate of return to the efficient frontier of risky assets.

An open-end management investment company (mutual fund family), registered with the Securities and Exchange Commission (SEC). Mason Street Advisors, LLC serves as the investment adviser for each of the eleven funds. Northwestern Mutual Investment Services, LLC (NMIS), member NASD & SIPC serves as the distributor for the funds.

A change in a life insurance contract which may cause it to become a modified endowment contract under IRC §7702.

A statement made by the applicant or proposed insured in the policy's application which is not factually correct. If the truth had been disclosed, the insurer would not have issued the policy or would have issued it without additional benefits or at a higher premium.

The date which the policy endows for its total face amount.

The amount payable under a whole life insurance policy if the insured person lives to the last age on the mortality table on which the values of the contract were based.

In disability and long-term care insurance, this is the longest period of time that the insured can normally collect benefits. The maximum benefit period varies with the type of coverage.

The maximum amount of salary an employee is allowed by law to defer and contribute to a 403(b) Tax-Deferred Annuity plan; a calculation is involved in determining the amount.

The maximum loan interest rate, as determined by the laws of the original state of issue.

A medical history and exam completed by a doctor that an insurance company may require of the applicant during the underwriting process.

A service utilized by all life insurance companies who are members of the MIB. Member companies are required to provide brief, coded reports of significant underwriting information to the MIB on a confidential basis. These reports do not include indication as to whether or not an application is issued, rated, or declined. The information is used to protect against the omission of significant underwriting information by forgetful or dishonest applicants. Only member companies have access to this information.

An independent, international association of life insurance agents devoted to continuing education for professional and personal development. An agent can become a member by achieving the production and earnings qualifications required by the association.

The systematic borrowing of cash value increases to pay the premiums and loan interest on a life policy. The method was rendered less attractive after the Tax Reform Act of 1986 began to eliminate the personal interest deduction.

For mutual funds, the amount required to open a new account (minimum initial purchase) or to deposit into an existing account (minimum additional purchase). These minimums may be lowered for buyers participating in an automatic purchase plan.

Refers to a blended policy structured with the minimum amount of whole life insurance. For example, a minimum-mix ACL policy in the individual market need consist of only $1,000 in permanent insurance, with the balance of the face amount being made up of Term Insurance Benefit.

Making, issuing, circulating, or causing to be issued or circulated any written or verbal statement that does not correctly represent policy terms. Also, use of a name or title for any policy or class of policies that does not reflect its true nature.

Life insurance policies deemed "investment-oriented" under TAMRA '88. Distributions (loans or surrenders) taken from these policies while the insured is living are taxed as gain-out-first rather than tax basis-out-first. Also, distributions taken before age 59½ are subject to an additional 10% surcharge tax on any gains. Death benefits are treated the same as non-MEC contracts.

A product which has a guaranteed premium change in a future year. It may be an increase or a decrease.

A mutual fund that invests only in short term securities, such as bankers' acceptances, commercial paper, repurchase agreements and government bills. The fund attempts to maintain its net asset value at $1.00 per share, but it is possible to lose money in a money market fund. Such funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other federal agency, although the portfolio may consist of guaranteed securities and/or the fund may have private insurance protection.Mutual Fund

Reference to the charges deducted monthly from the account value on a universal life contract. The charges consist mainly of mortality and expense costs, and premiums for riders and supplementary benefits.

Determining whether or not an insurance applicant's financial situation and moral behavior represent a hazard that could affect that person as a standard insurable risk, as revealed by considering the applicant's habits, environment, mode of living, and general reputation. This information is usually obtained during a personal history interview conducted by telephone with the home office underwriting department, or by an inspection report conducted by a consumer investigative agency.

Refers to the potential loss of health for a specific population.

The frequency of deaths in proportion to a specific population.

The cost of the insurance protection (death benefit minus cash value) on a life product. On an illustration, mortality charges referred to as "current" are not guaranteed. Those stated as "maximum" are the contract guarantees. The mortality charge is similar to a one-year term rate and increases with the insured's attained age. Commonly associated with universal life, the mortality charge is multiplied by the net amount-at-risk to determine the cost of providing insurance protection.

A provision of an annuity contract under which the company agrees to continue to pay benefits, even though the annuitant lives longer than is predicted in the annuity table.

A rough measure of mortality experience that can be calculated from annual statement data. This ratio reflects the actual cost experienced by the company (death benefits paid minus reserves released) compared to that predicted by valuation assumptions (tabular cost) for a company's individual line of business.

The difference between the estimated number of deaths listed on a mortality table and actual mortality experience.

A table or chart listing the probabilities of death occurring at various ages.

Debt instrument by which the borrower gives the lender a lien on real property as security for the repayment of a loan.

A convenient billing arrangement that Northwestern Mutual offers to organizations that pay premiums for groups of three or more contributors. An example would be a charity with multiple life insurance donors.

An insurance company organized for the mutual protection and benefit of its members and others who have beneficial interests in insurance policies and annuity contracts issued by the company. Its members are the policyowners who hold insurance policies or annuity contracts issued by the company. Policyowners share in the company's financial success by receiving policy dividends. They also participate in the election of the board of directors. A mutual company has no stockholders.

Pooled money from shareholders that is invested in a variety of securities, including stocks, bonds and money market securities. Mutual funds offer the individual investor the advantages of diversification and professional management. Variable life and annuity products are invested in mutual fund-type accounts.