LIFE SETTLEMENT GLOSSARY EXAMPLE

G

general account

An non-segregated account life insurance companies use to maintain funds from guaranteed insurance products such as whole life or fixed universal life.

grace period provision

For whole life insurance, the 31 day period following the premium due date during which past premiums can be paid without penalty or loss of coverage. For universal life insurance, generally a 60 day period starting from the time the cash value is no longer sufficient to support the current monthly deduction. For both policy types, coverage stays in force during the grace period, but may lapse if additional premiums are not paid before the grace period expires.

graded premium policy

A kind of modified-premium whole life policy that calls for increasing premiums that rise at specific points in time until ultimately reaching a level premium that remains unchanged for the remaining duration of the policy.

GRAMM-LEACH-BLILEY ACT

Financial services legislation that was passed by Congress in 1999 to allow banks, insurance companies and securities firms to engage in each others' activities and own each other.

grantor trust

A type of trust that is created by a trust agreement and not a will and may allow the creator of the trust to control the trust property to the extent they (and not the trust) are taxed on the property's income.

gross premium

The total premium paid into a policy before deducting expense charges (universal life) or receiving back dividend credits (whole life).

gross return

Generally a term for variable universal life meaning the long-term average return assumed before deducting management fees and expenses.

group permanent life insurance

Permanent (cash value) life insurance that is made available to members of a group, often on a contributory basis.

group term life insurance

Term (temporary) life insurance that is provided and/or made available to members of a group, either on an employer pay-all basis, a contributory basis, or a combination of the two.

guaranteed insurability option

A life insurance policy rider that allows the policy owner to purchase of additional coverage on the life of the insured at specific ages or the occurrence of certain life events. The additional coverage is based upon the age of the insured when the option is exercised, but does not require the insured to provided medical or other underwriting evidence of insurability.

guaranteed-issue insurance

Life insurance that usually does not require any type of individual medical, avocational, or financial underwriting and is offered to all eligible members of a specific group who apply and meet required conditions of eligibility.

guaranty fund

A state-by-state fund supported by solvent insurance companies to help offset losses of the policyholders of failed insurance companies operating in that state.

guideline premium

A term applying to universal life policies indicating the maximum allowable premium payable that will still allow the policy be taxed as life insurance instead of an investment under Federal tax guidelines.