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GAAP reserves
Reserves that are calculated in accordance with generally
accepted accounting principles.
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general account
An undivided account in which life and health insurers formerly
recorded all incoming funds. General accounts are still usually
insurers' largest accounts, but since the early 1960s, life
and health insurers have begun using other accounts as well.
See also separate account.
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general agency
distribution system
Along with the branch office system, the general agency distribution
system is part of the agency system, which is the most common
system used to sell individual life insurance products. Under
the general agency system, each field office is headed by
a general agent, who is an independent entrepreneur under
contract to the insurer. As an independent entrepreneur, the
general agent has a great deal of control over how the field
office is to operate. Typically, the staff of the field office
is employed by the general agent, not the insurer; salaries
and office expenses are paid by the general agent, not the
insurer; and the soliciting agents are under contract to the
general agent, not the insurer. In a traditional general agency
system, all commissions from the insurer are paid to the general
agent. The general agent keeps a portion of each commission,
called an overriding commission, and then pays the remaining
commission to the appropriate soliciting agent. Some insurers
have modified this procedure and now pay commissions directly
to soliciting agents and overriding commissions directly to
general agents. See also agency system, branch office distribution
system, and overriding commission.
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general agent
(GA)
The individual in charge of a field office of an insurer that
uses the general agency distribution system. The general agent
is an independent entrepreneur who is under contract to the
insurer.
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generally accepted
accounting principles (GAAP)
The set of accounting principles used by most firms outside
the life insurance industry and sometimes used by life and
health insurance companies. GAAP is based on the going-concern
concept of asset valuation.
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GIC
See guaranteed investment contract (GIC).
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GI rider
See guaranteed insurability (GI) rider.
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good health
provision
A provision contained in some group credit policies stating
that a policy is void if the insured was not in good health
when the application was signed or when the policy was delivered,
whichever was specified in the contract.
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grace period
The length of time (usually 31 days) after a premium is due
and unpaid during which the policy, including all riders,
remains in force. If a premium is paid during the grace period,
the premium is considered to have been paid on time.
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graded-premium
whole life insurance
A type of whole life insurance in which premiums increase
once or at specified points in time, such as every three years,
until a premium that remains level is reached.
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gross premium
The amount that policyowners actually pay for their insurance.
The gross premium equals the net premium plus the loading.
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group creditor
life insurance
Group insurance coverage wherein a master contract is issued
to cover the lives of current and future debtors of the policyowner.
The beneficiary of such coverage is the policyowner.
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group deferred
annuity
A type of annuity sometimes used to fund a pension plan. Employer
contributions under a group deferred annuity contract are
used to purchase deferred annuities to provide for the retirement
benefits of plan participants.
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group insurance
Insurance that provides coverage for several people under
one contract, called a master contract.
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group life insureds
In Canada, the persons who are insured by a group life insurance
contract. Usually simply called "insureds" in the United States.
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group ordinary
life insurance
Group life insurance in which at least a part of the coverage
is permanent and builds a cash-value.
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group paid-up
insurance
A type of contributory group life insurance in which the employee's
contributions are used to purchase paid-up whole life insurance
and the employer's contributions are used to purchase term
insurance. The amount of insurance coverage on each employee
remains level each year. Therefore, as the amount of paid-up
insurance on an employee increases over time, the amount of
term insurance which the employer must purchase to make up
the difference decreases.
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group permanent
life insurance
Any of several types of life insurance which build a cash
value and are underwritten on a group basis. Group permanent
life insurance is often used to fund group pension plans and/or
to provide life insurance coverage that will continue after
retirement.
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group persons
insured
In Canada, the persons who are insured by a group health insurance
contract. Usually simply called "insureds" in the United States.
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group practice
model (GPM)
A means of organizing a health maintenance organization (HMO)
in which the physicians in the HMO share a central facility.
See also individual practice association (IPA).
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group representative
A salaried insurance company employee who deals solely with
the distribution of group insurance products. The primary
responsibilities of group representatives include finding
prospects, designing proposals, installing the product, and
renegotiating the policy at renewal.
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group RRSP
In Canada, a collection of individual registered retirement
savings plans (RRSPs) established and maintained by an employer
in order to help employees save for retirement. Each RRSP
within the group is owned entirely by the employee. Employer
contributions therefore become vested as soon as they are
made.
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group universal
life insurance (GUL)
Group life insurance for which the insured usually pays the
full premium and can choose the amount of premium to pay,
and in which the death benefit is determined by the amount
of the premium. The insured can vary the premium and death
benefit amounts during the life of the policy. Like individual
universal life insurance, GUL is designed to combine insurance
protection with a savings/investment element. In addition,
GUL is usually "portable," which means that a group member
who leaves the group can continue coverage under the group
plan. Sometimes called a Group Universal Life Program (GULP).
See also universal life insurance.
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Guaranteed Income
Supplement (GIS)
In Canada, a supplemental monthly benefit available to Old
Age Security (OAS) recipients who receive less income than
a stated amount.
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guaranteed insurability
(GI) rider
An amendment to a life insurance policy that gives the policyowner
the right to purchase additional insurance of the same type
as provided in the original policy. The additional insurance
can equal no more than an amount specified in the policy contract
and can be purchased at specified premium rates and at specified
times without new evidence of insurability. Also called a
policy purchase rider.
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guaranteed investment
contract (GIC)
A pension plan funding vehicle in which an insurer accepts
a single deposit from a plan sponsor for a specified period
of time, such as five years, and holds the deposit at a specified
rate of interest. At the end of the period, the deposited
funds, including accumulated interest, are returned to the
plan sponsor, who can reinvest the plan assets with the insurer
or with another party. Also called a guaranteed income contract
or a guaranteed interest contract.
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guaranteed-issue
insurance
Insurance coverage for which there is usually no individual
underwriting. All eligible members of a particular group of
proposed insureds who apply for the policy and who meet certain
conditions are automatically issued a policy.
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guaranteed renewable
policy
An individual health insurance policy that specifies that
the insurer will continue the policy until the insured reaches
a specified age, if premium payments are made when due. The
insurer can change premium rates for broad classes of insureds.
See also cancellable policy, conditionally renewable policy,
noncancellable and guaranteed renewable policy, noncancellable
policy, and optionally renewable policy.
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guaranty association
In the insurance industry, an organization whose purpose is
to protect policyowners from losses suffered through the insolvency
of an insurance company.
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Guidelines Governing
Group Accident and Sickness Insurance
In Canada, Superintendents' Guidelines that regulate several
aspects of group health insurance contracts, including the
types of groups to which a group health insurance contract
may be issued and the particulars that must be included in
the certificate issued to each person insured by the contract.
See also Superintendent's Guidelines.
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Guidelines Governing
Group Life Insurance
In Canada, a set of guidelines issued by the Canadian Council
of Insurance Regulators which specifies, among other things,
the types of groups which are eligible for group life insurance.
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guide to buying
life insurance
In Canada, a written statement developed by the Canadian Life
and Health Insurance Association (CLHIA) which describes all
of the types of life insurance available and is intended to
help prospects for life insurance compare the advantages and
disadvantages of each type of policy.
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