Variable and Interest Sensitive Life Insurance

Glossary

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A
Accidental Death Benefit- ADB
This rider provides additional coverage if the insured's death is "accidental" as defined in the rider.
Account Selection
The policy offers you a choice between the Fixed Account or Plus Account option. The Account option you select determines the interest crediting methodology applied to the Policy’s Account Value.
Accrued Interest
This amount is the loan interest charged, from the last policy anniversary date, on the Loan Amount.
Alternate Contract Fund Adjustment
The amount by which the Contract Fund is increased as a result of the Alternate Contract Fund.

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B
Basic Interest Account
The fixed account which serves as the clearing account for policy funds is formally known as Basic Interest Account (BIA). All premiums and loan principal repayments applied to an IUL policy are applied initially to this account. Like the fixed accounts on UL policies and the fixed funds on VUL, interest rates are set periodically by the Company and will not be less than a minimum guaranteed rate established for the account in the contract.
Base Policy Death Benefit

  • Level Death Benefit Type - Amount on any date is equal to the greater of:
    1. the Basic Insurance Amount;
    2. the Contract Fund before deduction of any charges due on that date, multiplied by the insured's attained age factor as shown in the policy. If the Contract Fund is less than zero, we will consider it to be zero.
  • Variable Death Benefit Type - Amount on any date is equal to the greater of:
    1. the Basic Insurance Amount plus the Contract Fund before deduction of any charges due on that date;
    2. the Contract Fund before deduction of any charges due on that date, multiplied by the insured's attained age factor as shown in the policy. If the Contract Fund is less than zero, we will consider it to be zero.
  • Return of Premium Death Benefit Type - Amount on any date is equal to the greater of:
    1. the Basic Insurance Amount plus accumulated total premiums paid less withdrawals;
    2. the Contract Fund before deduction of any charges due on that date, multiplied by the insured's attained age factor as shown in the policy. If the Contract Fund is less than zero, we will consider it to be zero.
Beneficiary
The person, persons, or entity that will receive the Total Death Benefit payable at the Insured's death, or at the death of an insured spouse or dependant child.
Basic Insurance Amount
This is the amount of insurance shown as "Face Amount" in your policy.

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C
Cash Value

  • Variable Appreciable Life, Pruvider - This amount equals the total Contract Fund minus any Surrender Charge plus any Termination Dividend, if applicable.
  • Variable Universal Life, Prulife Universal, Indexed Universal - This amount equals the total Contract Fund minus any Surrender Charges.
Children Level Term Rider
A rider that provides term insurance coverage for each eligible child. In addition, it allows each eligible child the opportunity to convert term insurance to permanent insurance. Refer to your policy for more information.
Contract Fund

  • Variable Appreciable Life, Pruvider, Variable Universal Life - This amount equals the total value of the variable investment options and the Fixed-Rate Option, plus the principal amount of any outstanding loan, plus any interest credited on the loan. For a detailed description of how the Contract Fund can vary each day, refer to your policy for more information.
  • Prulife Universal, Indexed Universal, Single Premium Universal Life - This amount equals the total invested premiums accumulated at interest, less charges and withdrawals, plus the principal amount of any loan, plus any interest credited on the loan. If monthly charges exceed the amount available in the Contract Fund, they are reflected in Outstanding Charges.
Current Interest Crediting Rate
Prulife Universal - This is the interest rate credited to the Contract Fund, excluding the Loan Amount, if any The rate may change over time, but your contract guarantees a minimum interest rate of 4%.
Current New Money Rate
This is the interest rate that applies to any premium payments (except loan repayments) received on the previous business day and money transferred in the Fixed-Rate on the previous business day. After approximately one year the funds will earn a different rate.

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D
Death Benefit

  • Variable Appreciable Life, Pruvider - This is equal to the Policy Face Amount plus any Excess Death Benefit and Termination Dividend, if applicable. This is the amount (excluding any additional death benefits provided by riders) that would have been paid to the beneficiary(ies) if the Insured had died on the previous business day, and did not have an outstanding loan. The Death Benefit will be reduced by any charges due up to the date of death. Refer to your policy for more information.
  • Variable Universal Life - This is the amount (excluding any additional death benefits provided by riders) that would have been paid to the beneficiary(ies) if the Insured had died on the previous business day, and did not have an outstanding loan. The Death Benefit will be reduced by any charges due up to the date of death. Refer to your policy for more information.
Death Benefit Guarantee
A guarantee that the policy will not end. It is available provided you pay sufficient premiums and you do not take loans.

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E
Enhanced Cash Value Rider
This rider provides payment of an additional amount as defined in your policy. This amount may be payable upon surrender of the policy but is not payable when the insured is changed or when the policy is exchanged pursuant to Section 1035 of the U.S. Internal Revenue Code.
Enhanced Disability Benefit
This rider provides for payment of at least all monthly costs for insurance and riders if the insured becomes "totally disabled" as defined in the rider. This rider is referred to in your policy as Rider For Payment Of Premium Benefit Upon Insured's Total Disability.
Estate
The property belonging to a deceased person that must be administered and distributed in accordance with a will or the laws of intestacy.
Excess Death Benefit
For the Variable Death Benefit, it is the excess amount in the Contract Fund over the Tabular Contract Fund and any increase in the Death Benefit amount so that your policy would qualify as life insurance under the Internal Revenue Code. For the Level Death Benefit, it is any increase in the Death Benefit amount so that your policy would qualify as life insurance under the Internal Revenue Code.

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F
Fixed Account
This is the account into which all net payments are applied. It is the source of all funds transferred to the Plus Account and the destination of all transfers from matured Plus Account Segments. Amounts in the Fixed Account earn interest, credited daily, at the guaranteed minimum rate of 2.5% per year, plus any excess interest at a rate periodically declared by the Company.

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G
Gibraltar Accidental Benefit - GAB
This is a supplementary benefit that provides an additional benefit for accidental loss of life. Under certain conditions, it also provides a benefit for accidental loss of limbs or sight. (Available on PRUvider only.)

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I
Indexed Accounts
One or more accounts that may be credited with index earnings. The value of an indexed account will vary based on an index value.
Index Earnings
Index earnings are calculated on each segment maturity date using the index value on the segment maturity date, the index value on the segment start date, the participation rate, the index growth floor, the index growth cap and the guaranteed minimum index growth floor. Index earnings may also be calculated on each segment anniversary if a segment has a segment duration of greater than one year.
Index Growth Cap
The index growth cap is a factor used in determining index earnings for each index segment. The guaranteed minimum index growth cap for each indexed account is shown in the contract data pages. We will determine the index growth cap for each segment in advance. The index growth cap for each segment will not be lower than the guaranteed minimum index growth cap.
Index Growth Floor
The index growth floor is a factor used in determining index earnings for each index segment. The guaranteed minimum index growth floor for each indexed account is shown in the contract data pages. We will determine the index growth floor for each segment in advance. The index growth floor for each segment will not be lower than the guaranteed minimum index growth floor.
Index Value
The index value on each date is the published value of the index, excluding any dividends that may be paid by the firms that comprise the index, as of the close of business on each date. If there is no published closing value for the index on a segment start date, a segment anniversary or a segment maturity date, we will use the most recent published closing value for the index.
Insured Disability Benefit
This is a supplementary benefit that pays certain premiums into the Contract Fund if the insured is totally disabled. Refer to your policy for more information.

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L
Level Death Benefit Option
Generally provides a level death benefit with an opportunity for a more rapid accumulation of cash values than a variable death benefit option.
Living Needs Benefit
This is a supplementary benefit that allows a policyowner, under certain circumstances, to obtain a reduced Net Death Benefit prior to the Insured's death.
Loan Amount
The principal amount of any outstanding loan. Refer to your policy for information on loans.

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M
Maximum Gross Withdrawal Amount
The largest amount that can be withdrawn while still keeping the policy active. Partial surrender charges may apply. Withdrawing this amount will reduce the death benefit and face amount of the policy.
Maximum Net Withdrawal Amount
The largest amount that can be withdrawn while still keeping the policy active net of partial surrender charges. Withdrawing this amount will reduce the death benefit and face amount of the policy.
Minimum Contract Fund Adjustment
The amount by which the Contract Fund is increased as a result of the Minimum Contract Fund.
Modified Endowment Contract (MEC)
Our records indicate that this policy has recently become classified as a modified endowment contract (MEC). This could affect the future tax treatment of your policy. Please call your Prudential customer service office to determine if you can reverse MEC status.
MyNeeds Benefits
The MyNeeds Benefit rider is available with this policy at no additional charge. If the insured is confined to a Nursing Home or receiving Hospice Care, this rider will waive any surrender charges applicable to a withdrawal or surrender if the conditions described in the rider are met.

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N
Net Death Benefit
  • Variable Appreciable Life, Variable Universal Life, Pruvider - This amount equals the Total Death Benefit minus any Policy Debt. This is the amount that would have been paid to the beneficiary(ies) if the Insured died on the previous business day and had an outstanding loan. The Net Death Benefit will be reduced by any charges due up to the date of death.
  • PruLife Universal, Indexed Universal - This is the amount that would have been paid to the beneficiary if the insured had died on the date this value was calculated, and there was an outstanding loan or the policy was in default and there were Outstanding Charges.
No Lapse Guarantee
A guarantee that the policy will not end. It is available provided you pay sufficient premiums and you do not take loans.

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O
Outstanding Charges
This amount equals the monthly charges that exceed the amount available in your Contract Fund. Any premium payments you make will be applied to these charges first.
Option to Purchase Additional Insurance (OPAI)
This is a supplementary benefit that allows the policyowner to purchase additional permanent insurance on the Insured, as specified in the policy, on certain future dates without providing evidence of insurability.

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P
Participation Rate
The participation rate is a factor used in determining index earnings for each index segment. The guaranteed minimum participation rate for each indexed account is shown in the contract data pages. We will determine the participation rate for each segment in advance. The participation rate for each segment will not be lower than the guaranteed minimum participation rate shown in the contract data pages.
Plus Account
This is the account that offers the possibility of both Basic Interest and Index-linked Interest. Amounts in the Plus Account earn Basic Interest, credited daily, at the sum of:
  • A rate equivalent to the annual rate that would have been credited if these amounts had been in the Fixed Account less 2.5%
  • The guaranteed minimum index growth floor rate
Plus Account Segment
Whenever a transfer is made from the Fixed Account to the Plus Account, a new Plus Account Segment is created. The effective date of the transfer is the segment’s start date. The segment has a specified duration of one year, and once the duration has elapsed, the segment matures on its segment maturity date.
Policy Debt
The Loan Amount plus the Accrued Interest to date.
Policy Face Amount
This is the amount of insurance shown as "Face Amount" in your policy.
Preferred Loan Available
This is the amount which can be borrowed at a lower interest rate, on or after the tenth policy anniversary. Refer to your policy for information on loans.

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R
Return of Premium Death Benefit Option
Under this option, the Death Benefit allows the beneficiary to recover the accumulated net premiums paid in addition to the policy face amount. Accumulated net premiums is equal to the premiums paid less withdrawals, accumulated at an interest rate specified by the policy owner.

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S
Scheduled Premium
This is the premium specified in your policy. Refer to your policy for more information.
Segments
Each time a transfer is made from the basic interest account to an indexed account a new index segment is created. The segment start date is the date as of which the transfer is made. The segment duration is shown in the contract data pages for each indexed account. The segment maturity date is shown in the contract data pages for each indexed account. If a segment has a segment duration greater than one year, the segment anniversary is any anniversary date of the initial transfer to that segment occurring before the segment maturity date.
Standard Loan Available
All loans within the first 10 years of the policy are Standard Loans and are charged an interest rate of 5.00 percent. After 10 years, the policy also may be eligible for a Preferred Loan. Refer to your policy for information on loans.
Supplementary Benefits
These are additional features that enhance your policy through riders and endorsements. Some may increase the Death Benefit payable. Others do not increase the Death Benefit, but serve to enhance your policy.
Surrender Charge
  • Variable Appreciable Life, Variable Universal Life, Pruvider - This is the charge that would be deducted had the policy been surrendered in whole or in part, or lapsed on the previous business day. After your policy has been in force for 10 years from issue and 10 years from the last face amount increase, there are no surrender charges.
  • PruLife Universal, Indexed Universal - This amount equals the charge that would have been deducted if the policy had been fully surrendered on the date this value was calculated. If the Basic Insurance Amount is decreased but the policy remains in force, a partial Surrender Charge applies. After your policy has been in force for 20 years, there is no Surrender Charge.
Surrender Charge Free Withdrawal Amount
The amount that can be withdrawn from the policy without incurring a surrender charge.
Surrender Value
This amount equals the Net Cash Value plus any cash value enhancements (which are explained in "Enhanced Cash Value"). This is the amount you would receive, before any tax withholding, if you should surrender your policy.

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T
Tabular Contact Fund
This is approximately the amount the Contract Fund would be if: (1) Scheduled Premiums are paid when due; (2) earnings are equal to a net annual compounded rate of 4 percent; (3) maximum contractual charges are deducted; and (4) no loans or withdrawals are taken. Refer to your policy for more information.
Termination Dividend
This is an additional dividend amount paid upon either the death of the Insured or the surrender of your policy. This amount is not guaranteed and may change.
Total Death Benefit
This amount equals the Death Benefit plus any riders on the Insured. This is the amount that would have been paid to the beneficiary(ies) if the Insured died on the previous business day and did not have an outstanding loan. The Total Death Benefit will be reduced by any charges due up to the date of death.

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U
Unscheduled Premium Benefit
This is a supplementary benefit that enhances the Waiver of Premium benefit. It provides for us to make additional unscheduled premium payments into your policy according to the benefit's terms and conditions.

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V
Variable Death Benefit Option
  • Variable Appreciable Life, Pruvider - Under this option, the Death Benefit can increase over the face amount on a dollar-for-dollar basis by the excess of the actual Contract Fund over the Tabular Contract Fund. It provides a Death Benefit that can keep pace with changing needs.
  • Variable Universal Life - Under this option, the Death Benefit can increase over the face amount on a dollar-for-dollar basis by the amount of the Contract Fund. It provides a Death Benefit that can keep pace with changing needs.

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W
Waiver of Premium
This is a supplementary benefit which, under certain circumstances, allows us to waive the premiums due if the Insured becomes and remains disabled, as defined in your policy, for more than six months. Special conditions apply for Insureds who become disabled at age 60 and over.

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