Death benefit

The amount payable to the beneficiary, according to the certificate terms, upon death of the insured or annuitant.  

Decreasing term
A form of term life insurance where the death benefit decreases each year per a predetermined formula. Premiums remain level. This type of certificate is frequently sold as mortgage insurance.  

Deferred annuity
An annuity contract providing income payments that begin at a future date.  

Deferred compensation plan
An agreement between an employer and an employee under which the employee will receive compensation during periods in which he or she is no longer working – after retirement, death and/or disability.  

Defined benefit plan
A pension plan under which the employee's retirement benefit is fixed or is determinable and is calculated per a formula – for example, 50 percent of salary at retirement. The employer's contribution to the plan will vary from year to year to meet the pension funding requirements.  

Defined contribution plan
A pension plan through which the employer's contributions are fixed and are made into individual accounts. As such, the retirement amount varies by individual. For example, the plan may require an employer contribution of 5 percent of gross salary. The actual retirement benefit, however, is unknown.  

A decline in prices, often caused by a reduction in the supply of money or credit.  The opposite of inflation.  

A decline in the value of a property due to general wear and tear or obsolescence; opposite of appreciation.  

Disability income insurance
Insurance that provides a benefit to replace a portion of an individual's earned income in the event the insured is too sick or hurt to work.  

An investment strategy designed to reduce exposure to risk by combining a variety of investments, such as U.S. stocks, international stocks,  bonds and cash, which are unlikely to all move in the same direction.  

A return of part of the premium on a participating certificate to reflect the difference between the premium charged and the combination of actual mortality, expense and investment experience. Such premiums are usually calculated to provide some margin over the anticipated cost of the insurance protection.  

Dividend option

The method selected by the certificate owner for payment of dividends on a participating life insurance certificate.
  • Paid in Cash - The dividends are paid in a check directly to the insured.
  • Accumulate at Interest - The company holds the money for the insured, allowing it to gain interest, which may be withdrawn at any time.
  • Paid-Up Additions - The dividends are used to purchase paid-up insurance of the same plan that the certificate was issued as.
  • Premium Reduction - The dividends are used to reduce the annual premium each year. This dividend option is available on the annual premium paying mode only.