Trust established to distribute life insurance proceeds. Because insurance companies cannot act as trustees or guardians, the policy proceeds are paid to a trust company and distributed under the terms of a trust agreement creating greater flexibility in distribution of the proceeds. The trustee has control over both the policy proceeds and also securities or other property to provide funds out of which to pay the premiums. This type of arrangement is a funded life insurance trust.
Tag: MEDICAL
Funding agency
Entity that holds the assets of a retirement plan, which is often the insurance company.
Funding deficiency
See: accumulated funding deficiency .
Funding instrument
See: funding vehicle .
Funding level
Dollar amount of funds needed to finance a medical care program.
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UK: The comparison of a pension scheme’s assets and liabilities.
Funding method
System used by employers to pay for health insurance plans such as prospective premium payment, retrospective premium payment, shared risk, or self-funding.
Funding standard account
Bookkeeping account that is kept to determine if a defined benefit pension plan (DBPP) meets minimum funding standards set by law. Some of the entries to the account are derived actuarially. Failure to satisfy minimum funding standards can cause penalty taxes and enforcement actions. Also called minimum funding standard account and minimum funding standards .
Funding vehicle
Legal document (insurance contract) that states the policies and management of pension funds by a funding agency such as an insurance company. Also called funding instrument .
Future increase option
Insurance provision that allows an insured individual to buy additional stated amounts of life or disability income insurance at certain future dates without consideration of the insured’s physical condition. Also called guaranteed insurability option .
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A provision found in some policies that allows the insured to purchase additional disability income insurance at specified future dates regardless of the insured’s physical condition.
Future medical treatment
In workers’ compensation cases, potential medical care that may be necessary to maintain an injured worker’s best possible condition or handle deterioration from the effects of an injury over time. Monetary awards for future medical treatment are established when a worker’s condition is permanent and stationary (P & S).