Type of nonparticipating whole life insurance that specifies both a maximum possible premium rate and a lower premium rate. The policy owner pays the lower rate for a certain period from when the policy is purchased and later the rate changes depending on the investment earnings of the insurance company. The premium rate will never be greater than the maximum premium rate. Also called flexible premium life insurance, nonguaranteed premium life insurance , and variable premium life insurance .
Insurance Encyclopedia
Index
A means of continually measuring the movement of a particular set of statistics over periods of time. Most unit trust fund managers measure their fund’s performance against that of an appropriate ‘benchmark’ index with the aim of at least matching or beating its progress. Weather derivatives are based on movements in an underlying index.
Index bureau experience
A method of tracking losses stemming from claims made during a year-long time frame.
Index case
First infected person who started the outbreak of a disease (e.g., state department of health will investigate students attending a school to locate the index case of an outbreak of meningitis).
Index clause
See: stability clause.
index convention
Space-saving rule used in the Index, which is the last section of the annually published Current Procedural Terminology code book. For example:KneeIncision (of)In this example, the word in parentheses (of) does not appear in the Index, but it is inferred. As another example:PancreasAnesthesia (for procedures on)In this example, because there is no such entity as pancreas anesthesia , the words in parentheses are inferred (i.e., anesthesia for procedures on the pancreas).
Index linked
See: INDEXATION.
Index or Stability clause
A clause in liability excess of loss Reinsurance tying treaty limits to an appropriate price or earnings index.
Index tracking
An index tracking fund aims to follow a particular index as closely as possible, not necessarily aiming to beat it. It invests only in the companies that make up that index. Index tracking removes the need to employ fund managers and so reduces charges.
Index-based products
Option contracts based on an index. The value of a derivative is derived from the underlying index as in the case of weather derivatives. Variations between the actual losses and those derived from the index creates the basis risk.