Life Insurance Glossary provided by LOMA's Glossary of Insurance and Financial Services Terms
UCR Fee
UL
Ultimate Mortality Table
A mortality table that shows the expected mortality rates of people who have not recently been underwritten for insurance policies. Contrast with Basic Mortality Table and Select Mortality Table.
Umbrella Liability Insurance
Insurance that provides additional liability coverage over and above that provided by a homeowners', automobile, professional liability, or comprehensive personal liability policy.
Unallocated Pension Funding Contract
A type of pension plan contract in which some or all of the plan sponsor's contributions are held in a pooled account and are not attributed to plan participants until the time arrives for the disbursement of benefits. Contrast with allocated pension funding contract.
Unassigned Surplus
See Divisible Surplus.
Unauthorized Insurer
In the United States, an insurer that does business in a particular state without becoming licensed to do business in that state in accordance with that state's law. Also known as nonadmitted insurer.
Unauthorized Reinsurer
A reinsurance company that is not licensed, admitted, accredited, authorized, or otherwise recognized by the insurance department in the jurisdiction of a ceding company.
Unbundled Product Structure
Insurance or annuity product design in which an insurer explicitly discloses various expense charges to customers and also specifies the rate of investment return being credited to customers. Contrast with Bundled Product Structure.
Uncollected Premiums
For U.S. insurers, individual life insurance premiums and annuity considerations that were due on or before the Annual Statement date, but for which the insurer has not received payment by that date. These amounts are called premiums outstanding in Canada.
See also Premiums Outstanding.
Undeliverable
Term used for an insurance policy that is refused by the buyer when the agent attempts to deliver it. Also referred to as not taken.
Underinsured Motorists Coverage
Insurance that protects an insured and his passengers when the other driver has insurance coverage, but that coverage is inadequate to cover their injuries.
Underwriter
The person in an insurance company who evaluates proposed risks, accepts or declines insurance applications, and determines the appropriate premium amount to charge acceptable risks.
Underwriting Function
The area within an insurance company that is responsible for (1) assessing and classifying the degree of risk represented by a proposed insured or proposed group with respect to a specific insurance product and (2) making a decision concerning the acceptance of that risk.
Underwriting Guidelines
An insurer's general standards that specify the parameters within which a proposed insured may be assigned to a risk class for a particular insurance product.
Underwriting Manual
A paper or electronic guide to underwriting action that includes the information an insurer uses to assign relative values to life insurance risks and typically provides descriptive information on impairments.
Underwriting Objective
Underwriting Philosophy
A set of objectives for guiding all of an insurer's underwriting actions that generally reflects the insurer's strategic business goals and includes its pricing assumptions for products. Also known as underwriting objectives.
Underwriting Worksheet
For a particular insurance case, a document that contains records of telephone calls and other communications, documentation of requests for reinsurance, underwriting requirements and other information requested, and other notations that explain clearly the manner in which the case has been handled from the time it was submitted to the insurer.
Undirected Deposit
For an annuity contract, a contribution for which the contract owner gives no specific instructions as to how the deposit should be allocated among the available subaccounts.
Unearned Income
The subset of collected income that has been collected but not yet earned.
Unearned Premium
A portion of the insurance premium received in one period, but applicable to the insurance coverage to be provided in the following period but before the next policy anniversary date.
Unemployment Insurance Act
In Canada, federal legislation that provides covered individuals with protection against loss of income resulting from unemployment. Benefits are provided for covered employees who are laid off or who are unable to work due to accidental injury, sickness, or pregnancy.
Unfair Claims Settlement Practices Act
In the United States, a National Association of Insurance Commissioners (NAIC) model act that specifies a number of actions that are unfair claim practices if committed by an insurer transacting business in the state in conscious disregard of the law or so frequently as to indicate a general business practice.
Unfair Trade Practices Act
A law that many states have enacted that defines certain business acts as unfair and prohibits those practices in the business of insurance.
Unfavorable Variance
In accounting, a cost variance in which the actual cost is higher than the standard cost. Also known as unfavorable deviation.
Contrast with Favorable Variance.
Uniform Accident and Sickness Insurance Act
A model law adopted by the Canadian Council of Insurance Regulators (CCIR) and enacted by all of the common law provinces of Canada to regulate health insurance contracts.
Uniform Individual Accident and Sickness Policy Provision Law (UPPL)
In the United States, a National Association of Insurance Commissioners (NAIC) model law that specifies the provisions individual health insurance policies must contain.
Uniform Life Insurance Act
Model legislation governing life insurance contracts agreed upon by the Canadian of Council of Insurance Regulators (CCIR) and enacted with minor variations by all of the common law jurisdictions of Canada.
Unilateral Contract
A contract between two parties, only one of whom makes legally enforceable promises when entering into the contract.
See also Bilateral Contract.
Uninsurable Risk Class
See Declined Risk Class.
Uninsured Motorists Insurance
Insurance that covers an insured driver and her passengers for physical injuries incurred in an accident with a driver who carries no liability insurance.
Uninsured Plan
Unisex Mortality Table
A mortality table that shows a single set of mortality rates that reflect one mortality rate for both males and females at each age.
Contrast with Sex-Distinct Mortality Table.
Unit Cost
(1) The incurred expense attributable to a single measured amount of work.
(2) In insurance, the amount charged per $1,000 of coverage, based on the level of risk presented by a specific insured. Also known as cost of insurance rate.
Unit of Coverage
A basic amount of insurance coverage that insurers use when calculating premiums for their products. For life insurance, a unit of coverage usually is $1,000 of coverage.
Universal Life II
Universal Life (UL) Insurance
A form of permanent life insurance characterized by flexible premiums, flexible face amounts, and unbundled pricing factors.
Unpaid Premiums Provision
An individual health insurance policy provision which states that when a claim is paid, any premium due and unpaid may be deducted from the claim payment.
Unrealized Gain (or loss)
A gain (or loss) that has not become actual because the investment has not matured or been sold.
UPPL
UR
See Utilization Review.
Usage Variance
In accounting, the difference between the actual quantities to be sold or processed and the budgeted quantities sold or processed, multiplied by the budgeted rate.
Use of Funds
See Cash Flow.
Usual, Customary, and Reasonable (UCR) Fee
The maximum dollar amount of a given covered expense that the insurer will consider as eligible for reimbursement under a medical expense policy.
Utilization Review (UR)
A process by which a managed health care plan evaluates the necessity and quality of an insured's medical care, using techniques such as preadmission certification, concurrent review, and retrospective review.
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