Term Life Insurance Glossary
M
Material Fact
A fact that is relevant to an insurance company’s underwriting decision regarding issuing or rating a policy.
Material Misrepresentation
In insurance, a misstatement by an applicant that is relevant to the insurer’s acceptance of the risk, because, if the truth had been known, the insurer would not have issued the policy or would have issued the policy on a different basis.
Medical Application
An application for insurance in which the proposed insured is required to undergo some type of medical examination. The results of the medical examination are then reported to the insurance company.
Medical Report
A report on a proposed insured’s health that is completed by a physician and is based on a physical examination and questioning of the proposed insured. Such a medical report serves as part of a medical application.
Misrepresentation
(1) A false or misleading statement made to induce a prospect to purchase insurance. Misrepresentation is a prohibited insurance sales practice.
(2) A false or misleading statement made by an applicant for insurance. Certain misrepresentations provide a basis for the insurer to avoid the policy.
Misstatement of Age or Sex Provision
A provision that is typically included in term life insurance and annuity policies and that describes how the amount of the policy benefit will be adjusted if the age or sex of the insured or the annuitant is incorrectly stated.
Mode of Premium Payment
The frequency with which premiums are paid (for example, annually, quarterly, monthly).
Modified-Premium Whole Life Insurance
A type of whole life insurance in which the policyowner pays a lower than normal premium for a specified initial period, such as five years. After the initial period, the premium increases to a stated amount that is somewhat higher than usual. This higher premium is then payable for the life of the policy.
Morbidity
Sickness, injury, or failure of health.
Morbidity Rate
The rate at which sickness, injury, and failure of health occur among a defined group of people. The premium that a person pays for health insurance is based in part on the morbidity rate for that person’s age group.
Morbidity Table
A chart that shows the rates of sickness and injury occurring among given groups of people categorized by age.
Mortality Charge
The cost of the insurance protection element of a universal life policy. This cost is based on the net amount at risk under the policy, the insured’s risk classification at the time of policy purchase, and the insured’s current age.
Mortality Curve
A line graph that represents the mortality rates as they change from age to age.
Mortality Rate
The frequency with which death occurs or is expected to occur among a defined group of people.
Mortality Table
A chart that displays the incidence of death among a given group of people categorized by age.
Mutual Insurance Company
An insurance company owned by its policyowners.
Contrast with stock insurance company.
Mutualization
The process of converting a stock insurance company to a mutual insurance company.
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