G – L
Gain
The difference between the amount received in the sale and the basis of the property.
General Agent
An independent business person who acts under a grant of authority from a life insurance company to develop insurance business within a defined territory. The general agent is frequently an active sales person, as well as the administrator of the agency.
Generation Skipping Transfer Tax
A flat 55 percent federal tax levied on any transfers, either during lifetime or at death, made to beneficiaries or others at least two generations below the transferor. This tax is assessed in addition to other taxes, such as estate or gift taxes.
Grace Period
The period of time between a premium’s due date and the date the policy will lapse if the premium is still unpaid (usually 31 days). If the insured dies during the grace period, the unpaid premium is deducted from the policy proceeds.
Grantor
The individual who transfers property. Commonly used to describe an individual who establishes and transfers property to a trust.
Group Insurance
Insurance purchased for a group of people which must provide coverage to all people who qualify on a class basis, regardless of individual considerations. The insurance company may refuse to renew a group contract.
Guaranteed Cash Value
The minimum values guaranteed by the policy that will be available on surrender of the contract, assuming all required or illustrated premiums have been paid to the date of surrender.
Guaranteed Issue
The maximum amount of insurance coverage available without submission and approval of medical evidence of insurability. The amount guaranteed could be the full policy amount, a portion thereof, or none at all.
Guardian
An individual legally appointed to manage the rights and/or property of a minor or person incapable of taking care of his or her affairs.
Insurance Broker
A salesperson who represents the client in finding insurance coverage from any of several insurance companies, and who has no exclusive contract requiring that all the business first be offered to any particular company.
Key Person Insurance
Insurance placed on an important person in a business to indemnify the business for loss of profits, goodwill and the increased expenses of having to replace the individual in the event of death or disability.
Lapse
Policy owner’s failure to pay the premium by the end of the grace period. The policy will either terminate without value or fall under one of the non-forfeiture options.
Level Premium
A premium that remains the same, not increasing with the insured’s age, throughout all the premium payment years of the contract.
Life Annuity
An annuity in which payments are guaranteed to be paid at regular intervals for the life of the annuitant.
Life Annuity with Period Certain
A life annuity that guarantees payments will continue for a specified number of years. If the annuitant dies before the period certain has expired, payments will be made to a beneficiary for the duration of the period certain.
Life Expectancy
The average number of years of life remaining to a number of people of a given age according to a given mortality table.
Life Insurance
A product which provides indemnification for the economic loss caused by a person’s death. The indemnification is made possible by spreading the cost of the financial loss over a large group of people who are exposed to the same risk.
Living Benefits
Benefits available to owners of life insurance contracts while the insured is still living. This term may refer to the availability of policy loans and collateral assignments, but it is sometimes used to refer to advances on policy proceeds taken in the case of terminal illness.
Living Trust
A trust established during the grantor’s life; also called an inter vivos trust.
Living Will
Document that provides instructions to physicians, health care providers, family and courts as to what life-prolonging procedures are desired if an individual becomes terminally ill or incapacitated.
Load Fund
A mutual fund with shares sold at a price that includes a sales charge — typically 4% to 8% of the net amount indicated. A load implies that the fund purchaser receives some investment advice or other service worthy of the charge.
Long-Term Care Insurance
A plan designed to cover the insured’s long-term care (nursing home) costs. Long-term care insurance includes coverage for medical, social and/or personal care services required by a person with a chronic illness or disability over a long period of time. Designed to help maintain independence, these services may be provided by in the home, the community or in nursing homes.
Lump Sum
A one-time deposit to purchase additional paid-up insurance. Can be made at issue and/or after issue on policies. Evidence of insurability may be required for after-issue lump sum purchases.