Glossary

 
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Valuation Day

Is a day on which the net asset value of a mutual fund is calculated (on a per unit basis). It can be any day on which the NYSE is open for business. This excludes days during which trading on the NYSE is restricted, or on which an SEC-determined emergency exists, or on which the valuation or disposal of securities is not reasonably practicable, as determined under applicable law.

 

Valuation Period

Is the period beginning immediately following the close of business on a Valuation Day and ending at the close of business on the next Valuation Day.

 

Variable Account

Is an account consisting of any or all variable sub-account(s) investing in shares of the fund(s). Variable account assets are usually separate account assets of an insurance company; the investment performance of which is usually kept separate from that of the general assets of the insurance company. Variable account assets are typically not chargeable with the general liabilities of the insurance company.

 

Variable Annuity

Is an annuity contract into which the premiums paid are invested in separate funds such as bond and stock funds. The selection of funds is governed by the required level of risk assumed. The account value correlates with the performance of the funds that the owner has opted to invest in.

 

Variable Investment Options

Are the underlying investment options made available in a variable life insurance policy.

 

Variable Life Insurance

Is a form of permanent insurance that provides death benefits and cash values which will vary according to the performance of a portfolio of investments. The policyholder allocates premiums to a range of different investments providing varying degrees of risk. These will include stocks or bonds, or blends of both, as well as accounts that offer a guarantee of interest and principal.

 

Variable Universal Life Insurance

Is a form of permanent insurance that combines the premium flexibility of Universal Life Insurance with a death benefit that varies as it does in Variable Life Insurance. The additional interest credited to the cash value is reliant upon the investment results of separate accounts that are invested in equities, bonds, real estate etc. As with Variable Life Insurance, the policyholder chooses the accounts to which the premium payments are made.

 

Verification of Cover

Is a document issued by an insurance company upon request confirming that a life insurance policy is in-force at the time requested. It provides basic data on the policy including any loan details.

 

Vesting

Is the right of an employee to all or a portion of the non-forfeitable benefits he or she has accrued, even if his or her employment is terminated. The employee’s contributions, as in a 401(k) plan, are always fully vested. The employer’s contributions vest in accordance with a schedule defined in the plan and are usually calculated based on the number of years of service.

 

Viatical Settlement Companies

These are companies that purchase life insurance policies at a discounted value (typically much higher than theie cash surrender values) from policyholders who are elderly or terminally ill. The companies then assume the premium payments and collect the face value of the policy upon the death of the originally insured individual(s).

 

Void

Is a term that denotes when an insurance policy is freed from all legal obligations for reasons specified in the policy contract. For example, a policy could be voided by an insurer if statements made by a policyholder are proven to be false.

 
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