death benefit
The amount of money
paid or due to be paid when a person insured under a life insurance
policy dies. This amount does not include adjustments for
outstanding policy loans, dividends, paid-up additions, or late premium payments.
See also basic death benefit and policy proceeds.
death claim
A request for payment under the terms of a
life insurance policy.
debits
In the numerical rating system, debits represent
underwriting factors that have an unfavorable effect on an
individual's mortality rating. Debits are assigned positive values.
See also credits and numerical rating system.
debtor-creditor groups
A group composed of lending
institutions -- banks, credit unions, savings and loan associations,
finance companies, retail merchants, and credit card companies --
and their debtors. See also group creditor life insurance.
decreasing term insurance
A type of term life insurance
in which the amount of coverage decreases during the term of
coverage.
decrement
A reduction in the number of participants in
a pension plan caused by factors such as retirement, disability,
death, or termination.
deductible
The amount of money you must
pay up front each year to cover your medical care expenses before
your insurance policy starts paying.
deferral date
A date some time after the first
anniversary of a group insurance policy to which an insurance
company defers the payment of the policy's first renewal premium. An
insurance company might defer this payment so that it could use the
full first year's experience to help calculate the new premium.
deferred annuity
(1) A series of payments in which the
first payment is postponed (deferred) for one or more periods. (2)
An annuity contract under which premiums are accumulated at interest
but the annuity payment period is postponed (deferred) for one or
more periods. See also deferred life annuity and group deferred
annuity.
deferred compensation plan
A plan established by an
employer to provide benefits to an employee at a later date, such as
after the employee's retirement.
deferred life annuity
A deferred annuity that provides
a series of payments, each of which is made only if a designated
person is alive.
deferred premium arrangement
In group insurance, an
agreement between an insurer and a policyholder to lengthen a group
insurance policy's grace period, on a permanent basis, usually by
30, 60, or 90 days. This arrangement allows the policyholder to use
the deferred premium amounts for the length of time by which the
grace period is extended. The arrangement is usually only granted to
companies with excellent credit ratings. Also called a premium-delay
arrangement.
deferred premiums
Premiums that are due after a
policy's statement date but before the next policy anniversary.
Deferred Profit Sharing Plan (DPSP)
In Canada, a type
of profit-sharing plan in which employer contributions, up to
certain limits, are tax deductible for the employer and tax deferred
for the employee, and in which the employee can withdraw the benefit
before retirement. The ways that plan funds can be invested are
restricted. See also profit-sharing plan.
defined benefit formula
A formula used to determine the
periodic payment amounts that each participant in a defined benefit
pension plan will receive at retirement. The benefit amount is often
related to number of years of participation in the plan.
defined benefit pension plan
A pension plan that
specifies the benefits that the plan promises to pay to a
participant upon retirement, with the benefits determined according
to a specified formula. Contrast with defined contribution pension
plan.
defined contribution formula
A formula that describes
the amount of money that will be deposited into a pension plan each
year on behalf of each plan participant. Usually, the contribution
is a specified percentage of the participant's compensation.
defined contribution pension plan
A pension plan that
specifies the amount of annual contributions that the plan sponsor
will make on behalf of a plan participant. A defined contribution
plan does not guarantee a specific amount of retirement benefits. A
participant's benefits at retirement are based on the amount that
has been contributed to the participant's account, plus investment
earnings. Contrast with defined benefit pension plan.
demutualization
The process of converting a stock
insurance company to a mutual insurance company.
dental maintenance organization
An organization like an
HMO which provides only dental care.
dentist-consultant
A licensed dentist who understands
the underwriting intent of dental plan language as well as the
accepted standards of dental practice, and who advises insurers as
to the appropriateness of dental treatment.
dependent life insurance
Group life insurance made
available to group members, usually on an optional and contributory
basis, to cover the spouse, children, or other dependents of the
group member. It is usually sold in small amounts which are intended
to pay funeral expenses.
deposit administration contract
A funding vehicle for a
pension plan in which the plan sponsor places plan assets in an
insurance company's general account. When a plan participant
retires, the insurer withdraws sufficient funds from the general
account to buy an immediate annuity for the plan participant. A
deposit administration contract usually protects the plan sponsor
against investment loss and guarantees minimum investment returns.
See also immediate annuity and immediate participation guarantee
(IPG) contract.
deposit term insurance
A type of level term insurance
that requires a substantially larger premium payment in the first
year than the amount of level annual premiums payable in subsequent
years.
determination letter
In the United States, a ruling by
the Internal Revenue Service (IRS) as to whether the design of a
pension plan satisfies the criteria necessary for the plan to be a
qualified plan.
deviated rate
In group creditor insurance in the United
States, a premium rate for a contributory plan which is higher than
the prima facie rate and based on the group's actual claims
experience. Insurers can charge a deviated rate only after the prima
facie rate has been in effect for a certain period of time and only
after being granted permission by the state insurance commissioner.
Contrast with prima facie rate.
diagnostic related groups (DRGs)
In the United States,
a prospective payment method used in the Medicare Program, in which
payment is not based on the number and kinds of medical services
that a patient receives, but instead is based on the diagnosis of
each patient.
direct response distribution system
In insurance, a
distribution system that relies on advertisements, telephone
solicitations, and mailings to generate sales. No agents visit
customers to induce sales.
D: Part
Two
