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Early retirement age: An age specified in a pension plan that is earlier than the plan's normal retirement age but at which a plan participant can still receive an immediate pension benefit. The benefit received at early retirement is usually actuarially reduced from the amount that would have been received had retirement occurred at the normal retirement age. See also late retirement age and normal retirement age.
EFF DATE (Table: GI_RATES): The date from when the rates became effective.
EFFECTIVE DATE (Table: BANK_TRANSACTIONS_DONE): Effective date when bank transaction has been reconciled with policy
EFFECTIVE DATE (Table: GENACCTRN): This field contains the processing date of the accounting entry.
EFFECTIVE DATE (Table: LETTERS_SENT): Life System Effective Date sent
Election period: A 60-day period following notification of an insured's eligibility for COBRA continuation coverage, during which the individual can accept or decline the coverage.
Elective contributions or elective deferrals: In the United States, contributions to an employee's Section 401(k) plan (cash or deferred arrangement) that are made by the employer on the employee's behalf. The contributions are made using before-tax dollars obtained through a voluntary reduction of the employee's salary. The contributions are tax-deferred to the employee. See also matching contributions and nonelective contributions.
Eligibility period: In contributory group insurance plans, the period of time, usually 31 days, during which a new employee may apply for group insurance coverage.
Eligibility requirements: The conditions a person must meet in order to be a participant in a group life insurance, group health insurance, or retirement plan.
Elimination period: See waiting period.
Employee contribution: See percentage contribution.
Employee Retirement Income Security Act of 1974 (ERISA): A United States federal law establishing (a) the rights of pension plan participants, (b) standards for the investment of pension plan assets, and (c) requirements for the disclosure of plan provisions and funding. ERISA also established the Pension Benefit Guaranty Corporation (PBGC).
Employee stock ownership plan (ESOP): Generally, any qualified employee-benefit plan which invests some or all plan assets in employer stock. In the United States, ERISA further defines an ESOP as either a qualified stock bonus plan or a combination qualified stock bonus plan and defined contribution pension plan designed to invest primarily in employer securities. The employer's contributions are tax deductible for the employer and tax deferred for the employee.
Employee's cost basis: In the United States, an amount that is subtracted from the total amount of a distribution to a pension plan participant, in order to determine the portion of the distribution that is subject to federal taxation. The cost basis is the amount on which an employee has already been taxed. It includes the amount of the nondeductible contributions made to the plan by the participant, any cost of plan-provided life insurance that was reported as taxable income by the participant, and other factors, including the amount of any employer contributions previously taxed as income to the participant.
Employees Profit Sharing Plan (EPSP): In Canada, a type of profit sharing plan in which the employer deposits funds into a trust account and may deduct the deposited amount for tax purposes. Employees are generally taxed on contributions on their behalf in the year the contributions are made and on interest earnings when they are not taxed when they leave the plan and receive the benefits. There are few limitations on the size of the contributions employers may make or on the ways that plan funds may be invested.
Endorsement: See rider.
Endorsement method: A method of changing the beneficiary of a life insurance policy. The change may be made in one of two ways: (a) The policy owner returns the policy to the insurance company, and the insurer attaches the endorsement with the name of the new beneficiary to the policy, or (b) the policy owner does not send the policy to the insurer but only requests the change by letter or telephone, and the insurer sends an endorsement with the change to the policy owner. Contrast with recording method.
Endowment insurance: A type of life insurance that provides a benefit (a) if death occurs during a specified number of years or (b) if, at the end of the specified number of years, the insured is alive.
ENDOWMENT RATE (Table: PLAN_VALUES): Enter the Endowment Rate factor per thousand for this age and duration.
Enhancement type policy: A life insurance policy in which part of each dividend provides paid-up additions, while the other part provides one-year term insurance to produce a predetermined total death benefit.
Enrolled actuary: In the United States, a pension actuary who meets the standards of and is enrolled by the federal agency known as the Joint Board for the Enrollment of Actuaries.
Entire contract provision: A life insurance policy provision which states that the policy itself, along with a copy of the application for insurance, if attached, constitutes the entire agreement between the insurer and the policy owner.
Equitable assignment: An assignment that does not meet the requirements of a legal assignment but which will be enforced in an equitable action if fairness so requires.
Equity pension: A pension which provides benefit amounts that, at least in part, vary in accordance with the investment results of a portfolio of common stocks and other investment vehicles. The equity portion of the pension benefit is meant to provide retirees with benefits that increase as inflation rises.
Equity-based insurance product: A life insurance or annuity product in which the cash value and benefit level fluctuate according to the performance of a portfolio of equity investments. The owners of this type of insurance product accept the risk of sharing in the insurer's investment gains and losses. Equity investments are investments by virtue of which investors gain part ownership in a corporation. The primary type of equity investment is corporate stock. See also variable annuity, variable life insurance, and variable universal life insurance.
Equivalent level annual dividend: One amount presented to consumers as part of the interest-adjusted method of comparing the costs of life insurance policies. The equivalent level annual dividend is meant to represent the part of the interest-adjusted payment and the cost that is, in effect, not guaranteed by the insurer, because dividends will change in the future as the insurer's experience changes. This amount gives the buyer an indication of the extent to which these nonguaranteed amounts affect the interest-adjusted payment and the cost of a policy.
Equivalent single payment: One payment that can replace several other payments, because it equals the value of the other payments.
Equivocal suicide: An apparent suicide in which there is doubt about whether the deceased intended to die as a result of an apparently self-destructive act.
ERISA: See Employee Retirement Income Security Act of 1974 (ERISA).
Error and Omissions (E&O) insurance: Insurance designed to cover claims that result from the negligent acts or mistakes of an agent, including (1) his or her vicarious liability stemming from negligent acts or (2) mistakes committed by individuals for whom the agent is legally liable.
ESOP: See employee stock ownership plan (ESOP).
Estate planning: An insurance program designed not only to provide funds for the prospect's dependents upon the death of the prospect, but also to conserve, as much as possible, the personal assets that the prospect wants to bequeath to heirs. Estate planning usually involves accountants, lawyers, and the trust officers of banks, as well as insurance agents.
Evidence of insurability: Proof that a person is an insurable risk.
Excess interest: The amount of interest above the guaranteed amount, that an insurance company pays on a settlement option when interest rates are high.
Exchange program: A program that allows a proposed insured who is replacing a policy to obtain the new policy on the basis of little or no evidence of insurability if his or her insurability has recently been established by the company that issued the original policy.
Exclusion rider: See impairment rider.
Exclusions: Losses for which an insurance policy does not provide benefits. For accidental death benefit coverages, exclusions describe causes of death which do not qualify as accidental. In health insurance policies, exclusions describe losses not covered, such as those related to pre-existing conditions, cosmetic surgery or self-inflicted injuries.
Exclusive agents: Career agents who are under contract with one insurance company only and who are not permitted to sell the products of other insurers. Also known as captive agents.
EXCLUSIVE SYSTEM USE (Table: REPORT): This flag indicates if the menu option requires the exclusive use of the system or not.
Exclusive territory: Under the general agency distribution system, a territory in which no individual other than the general agent is permitted to offer the insurer's products. Compare to nonexclusive territory and overlapping territory.
Exculpatory statute: Legislation in community-property states that allows an insurer to pay the proceeds of a life insurance policy in accordance with the terms of that policy without fear of double liability.
Exoneration statutes: Statutes that excuse the insurer from liability if a party claims policy proceeds which the insurer has already paid to a third party in good faith and without knowledge of any conflicting claim.
Experience rating: The process of using a group's own premium and claims experience to calculate premium rates. If the claims experience for the previous year was favorable, the insurer considers reducing the premium rates for the coming year. If the experience was unfavorable, the insurer attempts to discover the reason and may propose higher premium rates for the next year. See also blended rates and manual rates.
Experience refund: (1) The portion of a group insurance premium that is returned to a group policyholder whose claims experience is better than had been expected when the premium was calculated. Also called a dividend, an experience rating refund, and a retroactive rate reduction. See also dividend. (2) The portion of a reinsurance premium that is returned to the ceding company when claims experience is better than had been expected when the premium was calculated.
Experimental underwriting: The practice of cautiously accepting specific types of risk that are considered uninsurable according to the insurer's normal underwriting guidelines.
Express authority: The authority that a principal explicitly confers on an agent. See agent and principal. Compare to apparent authority and implied authority.
Extended spouse's allowance: In Canada, an Old Age Security (OAS) benefit payable to a person who has been receiving a spouse's allowance and whose spouse dies. The benefit is payable until the recipient reaches age 65 or remarries. See also spouse's allowance.
EXTENDED TERM DAYS (Table: PLAN_VALUES): Enter the Extended Term Days for this age and duration.
Extended term insurance option: A nonforfeiture option in which the cash value of a policy is applied as a net single premium to purchase paid-up term insurance. The amount of term insurance is equal to the death benefit of the policy being surrendered less any outstanding policy loans. The insured maintains the same amount of coverage but usually for a shorter period of time than the original coverage. See also nonforfeiture options.
EXTENDED TERM YEARS (Table: PLAN_VALUES): Enter the Extended Term Years for this age and duration.
Extra-percentage tables method: A commonly used plan for rating substandard risks. Under this method, each substandard class is charged a premium rate that is a certain percentage above the standard premium rate. Contrast with flat extra premium method.