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TriTech Services Insurance Tax

  • Tax Glossary



    TriTech Services, Inc. - Tax Glossary
     
           

     

    Valuation Reserve:

    A reserve against the contingency that the valuation of assets, particularly investments, might be higher than what can be actually realized or that a liability may turn out to be greater than the valuation placed on it.

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    Valuation:

    A calculation of the policy reserve in life insurance. Also, a mathematical analysis of the financial condition of a pension plan.

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    Variable Annuitization:

    The act of converting a variable annuity from the accumulation phase to the payout phase.

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    Variable annuity:

    A contract in which the premiums paid are invested in separate accounts which holds funds, including bond and stock funds. The selection of funds is guided by the level of risk assumed. The account value reflects the performance of the funds that the owner has chosen for investment.

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    Variable Life Insurance:

    A type of permanent insurance providing death benefits and cash values that vary with the performance of a portfolio of investments. The policyholder may allocate premiums among investments offering varying degrees of risk, including stocks, bonds, combinations of both, and accounts that guarantee interest and principal. The face value fluctuates depending upon the value of the dollar, securities or other equity products supporting the policy at the time payment is due.

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    Variable Universal Life Insurance:

    A combination of the features of Variable Life Insurance and Universal Life Insurance under the same contract. It combines the premium flexibility of universal life insurance with a death benefit that varies as in variable life insurance. Excess interest credited to the cash value depends on the investment results of separate accounts investing in equities, bonds, real estate, and others. The policyholder selects the accounts to which premium payments are made.

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    Vesting:

    The right of an employee to all or a portion of the benefits he or she has accrued, even if employment terminates. Employee contributions, as in a 401(k) plan, always are fully vested. Employer contributions vest according to a schedule defined by the plan and are usually based on years of service.

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    Viatical settlement companies:

    Life insurance companies that purchase life insurance policies at a discounted value from a policyholder who is elderly or terminally ill. The companies then assume the premium payments and collect the face value of the policy upon the death of the person originally insured.

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    Viatical Settlement Provider:

    Someone who serves as a sales agent, but does not actually purchase policies.

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    Viator:

    The terminally ill person who sells his or her life insurance policy.

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    Void:

    Denotes when an insurance policy is freed from legal obligations for reasons specified in the policy contract (ie., a policy could be voided by an insurer if information given by a policyholder is proven untrue).

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    Voluntary Reserve:

    An allocation of surplus not required by law. Insurers often accumulate such reserves to strengthen their financial structure.

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