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Maintenance expenses: The costs of keeping a policy in force. Maintenance expenses include the cost of processing premium payments and making policy dividend payments and the time that agents and customer service personnel spend in servicing and conserving policies that are in force.
Major medical insurance: A type of medical expense insurance that provides broad coverage for most of the expenses associated with treating a covered illness or injury. See also comprehensive major medical insurance and supplemental major medical insurance.
Major services: In dental insurance, dental services, such as inlays, crowns, prosthodontics, and orthodontics, which are often covered at 50 percent of their reasonable and customary charges.
Managed care: The name given to a broad spectrum of techniques by which insurance companies attempt to reduce health care costs by participating in decisions concerning the treatment given to those they insure. See also case management and utilization review.
Managing general agent (MGA): An independent contractor who is authorized to appoint PPGAs on a company's behalf and who may represent more than one company.
Mandated benefit: A benefit required by state law to be included in a health insurance policy.
Mandator: In Quebec, a party who authorizes another party, the mandatory, to act on the mandator's behalf in contractual dealings with third parties.
Mandatory: In Quebec, a party who is authorized by another party, the mandator, to act on the mandator's behalf in contractual dealings with third parties.
Mandatory Securities Valuation Reserve (MSVR): In the United States, a liability account that is designed to absorb, within certain specified limits, realized and unrealized capital gains and losses resulting from an insurer's investments.
Manual rates: Premium rates that are established for broad classes of groups. Manual rates are often used to establish premium rates for small groups with no credible loss experience, and to establish initial premium rates for large groups. See also blended rates and experience rating.
Master contract: The legal contract between an insurance company and a group insurance policyholder. The master contract insures a number of people under a single contract. Also called the master policy. See also certificate of insurance.
Master plan: A standardized form of pension or other employee-benefit plan developed by a financial institution to simplify plan drafting for plan sponsors. Although similar to a prototype plan, a master plan usually refers to a plan document developed by a financial institution (like an insurer) that can be adopted only by plan sponsors who use that financial institution to fund the plan.
Master policy: See master contract above.
Matching contributions: In the United States, contributions made by an employer to an employee's Section 401(k) plan (cash or deferred arrangement) and designed to equal the employee's contributions up to a certain amount or percentage of compensation. See also elective contributions and nonelective contributions.
Material fact: A fact that is relevant to an insurance company's underwriting decision regarding issuing or rating a policy.
Material misrepresentation: In insurance, a misstatement by an applicant that is relevant to the insurer's acceptance of the risk, because, if the truth had been known, the insurer would not have issued the policy or would have issued the policy on a different basis.
Matured endowment: An endowment insurance policy that has reached the end of its term during the lifetime of the insured and is therefore payable.
MATURITY DATE (Table: BONUS_PRT): The policy's maturity date.
Maximum benefit: The largest benefit amount that a defined benefit pension plan is legally permitted to provide to a plan participant. In the United States, the maximum benefit is determined under Section 415 of the Internal Revenue Code. The maximum benefit is subject to legislative change and is generally indexed to inflation so that it increases as price levels increase. In Canada, a maximum pension benefit is also established under taxation rules. See also contribution limit and section 415 limits.
Maximum benefit period: The maximum length of time for which disability income payments will continue.
Maximum benefits for related confinements provision: A provision included in basic hospital and surgical policies that limits the maximum benefits for all hospital confinements and for all surgery performed during one period of sickness or for any single injury.
MEAN RESERVE (Table: PLAN_VALUES): Enter the Mean Reserve factor per thousand for this age and duration.
Medicaid: A government-funded program in the United States that provides medical expense coverage for eligible people under age 65 who are indigent and meet certain other criteria. The program is administered by the states and is supported by state and federal funds.
Medical application: An application for insurance in which the proposed insured is required to undergo some type of medical examination. The results of the medical examination are then reported to the insurance company.
Medical expense insurance: Any of several types of health insurance designed to pay for part or all of an insured's health care expenses, such as hospital room and board, surgeon's fees, visits to doctors' offices, prescribed drugs, treatments, and nursing care. See also hospital confinement insurance, hospital-surgical expense insurance, major medical insurance, and specified expense coverage.
Medical Information Bureau (MIB): An organization that serves as a clearinghouse for medical information for the life insurance industry. When a person applies for life insurance, the insurance company sends the applicant's medical test results and any indication of health impairments to the MIB. This information is then available to other insurers when they are investigating an applicant's insurability. Access to MIB-coded information is restricted to authorized medical, underwriting, and claim personnel in member companies. No member company can request information from the MIB unless the individual being investigated gives written consent. An insurance company cannot base its underwriting decision solely on information provided by the MIB.
Medical necessity provision: A condition included in most major medical expense plans, stating that medical services that are educational or experimental in nature are not eligible for coverage.
Medical report: A report on a proposed insured's health that is completed by a physician and is based on a physical examination and questioning of the proposed insured. Such a medical report serves as part of a medical application.
Medicare: A United States government program that provides medical expense coverage to persons age 65 and over and to people with certain disabilities, as specified by Congress.
Medicare carve-out: Medical expense coverage offered by employers to retired employees that reduces medical expense benefits to the extent that those benefits are provided by Medicare.
Medicare supplement: Medical expense coverage that provides benefits for certain expenses not covered under Medicare. This coverage is available only to individuals who are covered by Medicare and can by purchased by individuals or by employers to cover retired employees.
Minimum age requirement: In pension planning, a requirement that an employee attain a certain age before being permitted to participate in the employer's pension plan. In the United States, a private employer's qualified pension plan cannot have a minimum age requirement greater than age 21. See also minimum service requirement.
Minimum deposit arrangement: An arrangement whereby a policy owner can apply the first-year cash value of a policy to the initial premium amount.
Minimum deposit business: The use of policy loans to pay premiums. In minimum deposit business, a policy owner instructs the insurance company to pay the premium out of the policy's cash value and to bill the policy owner for a premium only if the cash value is insufficient to pay the premium. Also called leveraged business.
Minimum funding standards: In the United States, standards established under Section 412 of the Internal Revenue Code relating to the advance funding of qualified pension plans. The standards are designed to ensure that contributions to a qualified plan are adequate to meet the plan's current and future obligations. Failure to satisfy minimum funding standards can lead to penalty taxes and enforcement actions. See also funding standard account.
Minimum premium plan (MPP): A group health insurance plan that is partially self-insured by the group policyholder but fully administered by an insurance company. The premium is small because the group policyholder pays most of the claims itself. See also administrative services only (ASO) contract and self-insured group.
Minimum service requirement: In pension planning, a requirement that an employee complete a certain period of employment (often known as a probationary or waiting period) before being permitted to participate in the employer's pension plan. In the United States, an employee who meets minimum age requirements generally cannot be subject to a waiting period of more than one year, although a plan with full and immediate vesting of benefits can require a two-year waiting period. In Canada, a two-year waiting period is permissible. See also minimum age requirement.
Misrepresentation: (1) A false or misleading statement made to induce a prospect to purchase insurance. Misrepresentation is a prohibited insurance sales practice. (2) A false or misleading statement made by an applicant for insurance. Certain misrepresentations provide a basis for the insurer to avoid the policy.
Misstatement of age provision: Life insurance policy wording that specifies the action the insurer will take if, at the insured's death, the insurer discovers that the insured's age was misstated in the application and the misstatement has resulted in an incorrect premium for the amount of insurance purchased. In an individual life insurance policy, this provision specifies that the policy's benefit amount will be adjusted. In a group insurance policy, this provision generally specifies that the policy's premium amount will be adjusted.
MODE METHOD (Table: GRP_POL): The mode / method of payment.
Mode of premium payment: The frequency with which premiums are paid (for example, annually, quarterly, monthly).
Model bill: Sample legislation developed by the National Association of Insurance Commissioners (NAIC) in the United States or the Canadian Council of Insurance Regulators (CCIR) in Canada. States and provinces may adopt this sample legislation exactly as written or use it as the basis for developing their own laws.
Model Life Insurance Solicitation Regulation: In the United States, a regulation adopted by the NAIC in 1976 that requires insurers to give life insurance consumers (1) information that will improve their ability to select the most appropriate plan of life insurance to meet their needs, (2) an understanding of the basic features of the policy that has been purchased or that is under consideration, and (3) the ability to evaluate the relative costs of similar plans of life insurance.
Model Rules Governing the Advertisement of Life Insurance: In the United States, an NAIC model law which provides a set of comprehensive guidelines covering nearly all aspects of advertisements for life insurance policies and annuity contracts.
Model Unfair Trade Practices Act: In the United States, an NAIC model law that prohibits unfair trade practices, such as defamation, rebating, unfair discrimination, and unfair claim settlement practices; the law contains a general prohibition against any form of insurance advertising that is "untrue, deceptive, or misleading."
Modified net premiums: Net premiums that are other than level, generally being lower for the first year than for subsequent years.
Modified-premium whole life insurance: A type of whole life insurance in which the policy owner pays a lower than normal premium for a specified initial period, such as five years. After the initial period, the premium increases to a stated amount that is somewhat higher than usual. This higher premium is then payable for the life of the policy.
MODULE TYPE (Table: REPORT): Periodic Processes run from a Batch End-of-day run are normally a single process. Other entities are allowed, for example, other Periodic Processing Menus. This would allow a Daily run to run, if required, other processes such as a Monthly or an EFT menu.
Money market fund: A low-risk mutual fund that achieves great liquidity by investing primarily in short-term securities.
Money-purchase pension plan: A type of defined contribution plan that specifies a rate of contribution to each participant's account (for example, 8% of annual compensation) and results in a benefit that is equal to the amount in the participant's account (including investment gains and losses) at retirement. Upon retirement, the money that the employer has contributed, plus investment earnings, is often used to purchase an annuity which will provide a regular pension benefit.
Monthly Debit Ordinary (MDO) insurance: Ordinary life insurance that is marketed under the home service system and paid for by monthly premium payments, usually made to an agent. See also home service distribution system.
Monthly outstanding balance method: In group creditor insurance, a premium-paying arrangement for contributory plans whereby, every month, the lender adds to the outstanding balance of the loan an amount sufficient to insure that balance for one month. Contrast with single-premium method.
Moral hazard: The danger that a proposed insured might deliberately attempt to conceal or misrepresent information. Moral hazard is a risk factor that affects the underwriting decision.
Morbidity: Sickness, disability, or failure of health.
Morbidity rate: The likelihood that a person of a given age will suffer an illness or disability. The premium that a person pays for health insurance is based in part on the morbidity rate for that person's age group.
Morbidity table: A chart that shows the rates of sickness and injury occurring among given groups of people categorized by age.
Mortality charge: The cost of the insurance protection element of a universal life policy. This cost is based on the net amount at risk under the policy, the insured's risk classification at the time of policy purchase, and the insured's current age.
Mortality curve: A line graph that represents the mortality rates as they change from age to age.
Mortality experience: The actual number of deaths occurring in a given group of people.
Mortality rate: The frequency with which death occurs among a defined group of people. The premium that a person pays for life insurance is based in part on the mortality rate for that person's age group.
Mortality table: A chart that displays the rates of death among a given group of people categorized by age. See also aggregate mortality table, annuity mortality table, basic mortality table, select and ultimate mortality table, select mortality table, and ultimate mortality table.
Mortgage redemption insurance: A form of decreasing term insurance that covers the life of a person who takes out a mortgage. If the person dies during the term of insurance, the policy proceeds will approximate the remaining amount of the mortgage loan.
Multi-company representation: In Canada, an arrangement by which a life and health insurance agent is allowed to represent more than one insurance company.
Multi-employer plan: A pension or other employee-benefit plan involving more than one employer and established by collective bargaining (negotiation between a union and employers). Coverage under the plan is portable within the group, which means that an employee who leaves one employer who is a member of the group and goes to work for another member of the group may continue coverage under the plan.
Multiple-employer trust (MET): (1) An arrangement whereby several employers (often in the same industry) cooperate to procure group insurance for their employees. (2) An arrangement made by an insurance company to cover several employers under one master policy, usually with specific benefit packages and limitations.
Multiple-line agency (MLA) system: A personal selling distribution system that uses full-time career agents to distribute both life and health and property/casualty insurance products for groups of financially interrelated or commonly managed insurance companies. Also known as the multiple-line exclusive agency system or all-lines exclusive agency system.
Mutual benefit method: An early method of funding life insurance, formerly used by fraternal orders or guilds. Under the mutual benefit method, the promised death benefit was provided by charging participating members an equal amount after the death of an insured member. Also called the post-death assessment method. See also assessment method.
Mutual insurance company: An insurance company owned by policy owners rather than stockholders.
Mutualisation: The process of converting a stock insurance company to a mutual insurance company.
MX FACTOR (Table: PLAN_VALUES): This is the MX factors used in traditional policy surrender calculations.