LIFE SETTLEMENT GLOSSARY EXAMPLE

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National Association of Insurance Commissioners (NAIC)

The national organization of state insurance commissioners that shares information and creates laws to regulate the insurance industry

National Association of Securities Dealers (NASD)

A self-regulatory organization of the securities industry that operates Nasdaq and over-the-counter stock markets in addition to administering exams for investment professionals.

National Council of Insurance Legislators (NCOIL)

An organization comprised of state legislators who serve on insurance committees in their respective states to encourage information sharing and common legislative proposals impacting insurance regulations and legislation.

needs analysis

A process of collecting information and developing an assessment of insurance needs based on assumptions supplied by or agreed to by a client or prospective client.

net amount at risk

The difference between the death benefit of a life insurance policy and the accumulated or cash surrender value.

net cash value

The cash value of a life insurance policy after deducting surrender charges and any outstanding loan balance.

net death benefit

The death benefit of a life insurance policy after deducting any outstanding loan balance.

net payment cost comparison index

A cost comparison index often included in life insurance buyers guides and used to compare life insurance policies according to the time value of money and uninterrupted premium payments over 10 and 20 year durations.

net premiums written

The total premiums written by an insurer during a stated period of time.

net present value

The standard method for measuring the effect of the time value of money on a series of cash flows over longer time horizons.

net return

The return paid on interest sensitive life insurance policies after decocting investment management expenses.

new life settlement

A recent life settlement transaction that has not yet been traded.

no lapse guarantee

A provision or rider that, subject to payment of minimum premiums at required times, guarantees to keep a universal life insurance policy in force that would otherwise lapse due to insufficient cash value.

non-recourse premium finance

A premium finance arrangement where a life insurance policy is the sole collateral for a loan or series of loans allocated to the payment of the same policy's premiums. Once popular and legitimate, the technique is seldom viable due to current market conditions and life insurance opposition to the arrangements.

non participating products

Life insurance policies that do not pay dividends. Most common to stock life insurance companies but also available from mutual life insurance companies.

non-admitted assets

Assets that life insurance companies are not allowed to carry on their balance sheets due to their questionable value or their improbability of materializing.

non-admitted insurer

Life insurance companies that are licensed in some but not all states.

noncontributory group insurance

A type of group insurance where the employer pays all costs.

nonforfeiture factors

Factors unique to each insurance company that allow them to compute policy cash values.

nonforfeiture option

The various options a policyowner has to apply cash values when a policy lapses.

nonforfeiture values

The values and periods related to the life insurance policy non-forfeiture options of cash surrender, extended term, and reduced paid up insurance.

nonguaranteed elements

The elements of earnings, expenses, and mortality costs within a life insurance policy that are based on the life insurance companies performance beyond what the policy guarantees.

notice of loss

The written notice of loss an insurance company requires to initiate a claim under a policy.