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Veralytic Glossary of Terms

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Illustrations:  Illustrations (often referred to as ledgers) consist of tables of hypothetical policy values typically including columns for premiums, account values, cash values and death benefits usually calculated based on non-guaranteed pricing assumptions as to cost of insurance charges for death claims, policy expenses as to premium loads, fixed administration expenses, and cash-value-based "wrap fees", and policy interest/investment earnings assumptions.

In-House Retention:  In-house retention is the amount of life insurance which a primary insurer can issue "on their own paper" without the need for any reinsurance.  While many insurers of all sizes can use reinsurance from the first dollar of a risk, in-house retention is a barometer of a primary insurer’s ability to control pricing even if reinsurers fail and/or withdraw from the market.

Institutional pricing:  Policies identified as institutional are designed to include volume discounts and economies of scale available to large individual transactions and/or large groups of policies.  As such, institutional policies are characterized by high minimum policy face amounts and/or high minimum premium requirements, and offer low and/or levelized premium loads, and/or low cash-value-based "wrap fees", and/or low or no termination fees (i.e., surrender charges), and/or low fixed administration expenses, and/or low cost of insurance charges.  Depending upon the administrative requirements and/or underwriting concessions (e.g., Guaranteed Issue or GI arrangement in corporate benefits settings) for a given policy/group of policies, institutional policies can include higher fixed administration expenses, and/or higher cost of insurance charges than "Retail" policies, so long as the total overall cost remains less than retail policies.

Insurance Banking®:  The practice of assembling and managing portfolios of insurance, typically with policies of larger than average face amounts, often in excess of a single insurer’s retention limits. The ability to provide high quality Insurance Banking® services depends upon negotiating and placing large blocks of insurance and requires lead underwriting experience and established relationships with many insurers.