LOMA Glossary

The LOMA Glossary of Insurance and Financial Services Terms

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G20. Commonly used name for the Group of Twenty Finance Ministers and Central Bank Governors, a forum for cooperation and consultation among representatives of key countries, the European Union, and a few non-governing institutions on matters pertaining to the international financial system.

GAAP. See generally accepted accounting principles.

GDP. See gross domestic product.

gender-based mortality table. See sex-distinct mortality table.

general account. A portfolio of assets that an insurer uses for the payment of contractual obligations to owners of non-investment-linked insurance products. General account assets are subject to the claims of a company’s general creditors in the event of a company insolvency. Contrast with separate account.

general agent. An independent business person who is under contract to an insurer to represent the company in insurance sales and who establishes and finances an insurance field office known as a general agency.

general and administrative expenses. The expenses that result from undertaking normal business activities to generate sales of products and to support products; include expenses for contractual benefits and operating expenses.

general insurance company. See property/casualty insurance company.

general management risk. For an insurer, the risk of losses resulting from the insurer’s ineffective general business practices or from the need to pay a special assessment to cover another insurer’s unsound business practices. One of four officially recognized C risks. Also known as C4 risk.

Generally Accepted Accounting Principles (GAAP). A set of financial accounting standards that all publicly traded companies in the United States and all companies in Canada follow when preparing their financial statements.

GI benefit. See guaranteed insurability benefit.

GIC. See guaranteed investment contract.

GIO. Guaranteed insurability option. See guaranteed insurability benefit.

GLB Act. See Gramm-Leach-Bliley Act.

GLWB. See guaranteed lifetime withdrawal benefit.

GMAB. See guaranteed minimum accumulation benefit.

GMDB. See guaranteed minimum death benefit.

GMIB. See guaranteed minimum income benefit.

GMWB. See guaranteed minimum withdrawal benefit.

going-concern concept. An accounting principle that requires a company’s accounting records to reflect the assumption that the company will continue to operate indefinitely.

good-order check. A review performed by an insurer's sales producer or new business processing function to determine that an insurance or annuity application submission is complete and accurate.

government bond. A bond issued by a national, state, provincial, or city government.

GPAF. See guaranteed payout annuity floor.

grace period. (1) For insurance, a length of time (often 31 days) following each premium due date during which the contract remains in effect regardless of whether the premium is paid. If the premium is paid during the grace period, the premium is considered to have been paid on time. (2) For purchases on credit, a period of time between the date of a purchase and the date the lender begins to charge interest during which no interest accrues.

grace period provision. An insurance policy provision that specifies a length of time following each renewal premium due date within which the premium may be paid without loss of coverage.

graded vesting schedule. For qualified retirement plans in the United States, a minimum vesting schedule that provides a participant with a nonforfeitable right to employer-funded benefits or account values according to a schedule of gradual increases. Contrast with cliff vesting schedule.

graded-premium whole life insurance policy. A whole life insurance policy that calls for three or more levels of annual premium payment amounts, increasing at specified points in time—such as every three years—until reaching the amount to be paid as a level premium for the remainder of the life of the policy.

Gramm-Leach-Bliley (GLB) Act. A U.S. federal law enacted in 1999 that removed many of the regulatory barriers between institutions in the various segments of the financial services industry. Also known as the Financial Services Modernization Act (FSMA).

gross domestic product (GDP). The total output of goods and services produced by labor and property located within a country, valued at adjusted market prices.

gross investment income. The amount of income that represents the total amount of income an insurer actually earned during the reporting year, before deducting investment expenses.

gross premium. The amount of money an insurer charges a policyowner for an insurance policy. Contrast with net premium.

gross reserve valuation method. A method of computing insurance policy reserves that makes provision for the insurer’s product-related expenses. Contrast with net reserve valuation method.

group annuity. An annuity purchased by an employer or plan sponsor to provide periodic income payments at retirement to members of a specified group.

group creditor life insurance. Group life insurance issued to a creditor, such as a bank, to insure the lives of the creditor’s current and future debtors.

group deferred annuity contract. A type of retirement plan funding vehicle that provides plan participants with annuities upon retirement. The insurer usually issues a master contract to plan trustees for the benefit of plan participants. Plan participants hold individual certificates as evidence of their promised annuity benefits. Each year, the sponsor uses the contributions made on behalf of each plan participant to purchase a single-premium deferred annuity.

group insurance. A method of providing life or health insurance coverage for a group of people under one insurance contract, called the master group insurance contract. Contrast with individual insurance.

group insurance policy. See master group insurance contract.

group insured. An individual covered by a master group insurance contract. Also called a covered person, certificate holder, or group life insured.

group life insured. See group insured.

group master contract. See master group insurance contract.

Group of Twenty Finance Ministers and Central Bank Governors. See G20.

group plan. See master group insurance contract.

group policyholder. The employer or other party that purchases group life insurance.

group prospect. A group that has applied for, but has not yet been approved for, group coverage from an insurance company. Also called the proposed group.

group Registered Retirement Savings Plan (RRSP). In Canada, a retirement savings plan in which employer and employee contributions are treated as if they were made by the employee, who can exclude all contributions from his current taxable income.

group representative. A salaried insurance company employee specifically trained in the techniques of marketing and servicing group products.

group RRSP. See group Registered Retirement Savings Plan.

growth and income mutual fund. A mutual fund that has the objective of long-term capital gains and some current income.

growth mutual fund. A mutual fund that focuses on achieving long-term capital appreciation or growth in value, but does not emphasize current income. A growth fund typically would hold common stocks.

guaranteed income contract. See guaranteed investment contract.

guaranteed insurability (GI) benefit. A supplemental life insurance policy benefit that gives the policyowner the right to purchase additional insurance of the same type as the basic life insurance policy—for an additional premium amount—on specified option dates (typically every three years) during the life of the policy without supplying evidence of the insured’s insurability. Also known as a guaranteed insurability option.

guaranteed insurability option (GIO). See guaranteed insurability benefit.

guaranteed interest contract. See guaranteed investment contract.

guaranteed interest-crediting rate. The minimum interest rate an insurer must pay on a fixed deferred annuity contract’s accumulation value. See also excess interest-crediting rate, current interest-crediting rate.

guaranteed investment contract (GIC). A type of retirement plan funding vehicle in which the plan sponsor makes a single deposit for the insurer to hold for a specified period of time, such as five years. GICs generally have a specified maturity date and guarantee the repayment at the maturity date of the amounts deposited under the contract, plus the amount of credited interest, less withdrawals. Also known as a guaranteed interest contract or a guaranteed income contract.

guaranteed level premium term insurance. See level premium term life insurance.

guaranteed lifetime withdrawal benefit (GLWB). A type of living benefit rider for variable annuities (VAs) that guarantees minimum withdrawals to a VA owner for life. The withdrawal amount is usually specified as a percentage of the contract’s living benefit value or accumulation value, whichever is greater.

guaranteed maximum mortality rate. For universal life (UL) products, a monetary amount specified in the contract which sets an upper limit on the mortality charge. The insurer guarantees not to charge a rate higher than the guaranteed maximum mortality rate. See also current mortality rate.

guaranteed minimum accumulation benefit (GMAB). A variable annuity contract feature that guarantees the value of the annuity will not fall below the principal investment amount (the accumulation), regardless of investment performance, as long as the contract remains in force for a specified period of time without any withdrawals.

guaranteed minimum death benefit (GMDB). A variable annuity contract feature which guarantees that, if the annuitant dies before periodic income payments begin, the beneficiary will receive at least a stated minimum amount, regardless of the contract’s accumulated value at that time.

guaranteed minimum income benefit (GMIB). A variable annuity contract feature that guarantees a minimum periodic income payment regardless of the annuity’s investment performance if the contract remains in force for a specified period of time—typically 7 to 10 years.

guaranteed minimum interest-crediting rate. For a fixed deferred annuity, the minimum rate that an insurer must credit to the contract’s accumulated value. See also accumulated value.

guaranteed minimum withdrawal benefit (GMWB). A variable annuity contract feature which guarantees that up to a certain percentage of the amount paid into the contract will be available for withdrawals annually during the accumulation period, regardless of investment performance.

guaranteed payout annuity floor (GPAF). For variable annuities, a living benefit under variable payout options which guarantees that the amount of each annuity payment after the first payment will never be less than a certain percentage of the first payment.

guaranteed renewable policy. An individual health insurance policy that gives the policyowner the right to renew the policy for as long as the premium payments are made when due. Medical expense and disability income policies may specify an upper age limit, such as 65, beyond which the policy does not have to be renewed by the insurer. Long-term care insurance typically must be renewed for the remainder of the insured's life. The insurer cannot increase the premium rate for an individual guaranteed renewable policy but may increase the premium rate for all policies in a particular class of policies. See also cancellable policy, conditionally renewable policy, optionally renewable policy, noncancellable policy.

guaranteed-issue basis. A way of offering insurance products in which no individual underwriting takes place; every eligible proposed insured who applies and meets specified conditions is automatically issued a policy.

guaranty association. In the United States, an organization that operates under the supervision of the state insurance commissioner to protect policyowners, insureds, beneficiaries, annuitants, payees, and assignees against losses that might result from the impairment or insolvency of an insurer that does business in the state.

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