Glossary
Life Insurance and IUL Glossary
Every IUL and life insurance term you will run into, defined in plain English.
GlossaryAG 49-AThe NAIC rule capping how optimistic an IUL illustration can be.GlossaryCap rate (IUL)The ceiling on index-linked interest an IUL segment can credit.GlossaryCost of insurance (COI)The monthly mortality charge an IUL deducts from cash value.GlossaryFloor (IUL)The minimum index credit an IUL segment can post, usually 0%.GlossaryGuaranteed columnThe illustration column built from the contract's worst-case numbers.GlossaryIllustration (IUL)The regulated projection insurers use to show how a policy could perform.GlossaryLapse (IUL)When an underfunded IUL's cash value can no longer cover its own charges.GlossaryModified endowment contract (MEC)A policy that failed the 7-pay test and lost favorable loan and withdrawal tax treatment.GlossaryParticipation rate (IUL)The share of index gain an IUL segment actually credits.GlossaryPolicy loan (IUL)Borrowing against IUL cash value, using the policy itself as collateral.GlossarySection 7702The tax code test a policy must pass to be treated as life insurance.GlossarySeven-pay testThe premium-funding limit that decides whether a policy becomes a MEC.
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