Term Life Insurance Glossary
O
Option A Plan
A plan used in universal term life insurance in which the potential policy proceeds remain level. In an option A plan, the policy proceeds are equal to the policy's death benefit. Consequently, the net amount at risk is equal to the difference between the policy's death benefit and the policy"s cash value. As the cash value increases, the net amount at risk decreases.
Contrast to option B plan.
Option B Plan
A plan used in universal term life insurance in which the potential policy proceeds increase. In an option B plan, the policy proceeds are equal to the death benefit plus the policy's cash value. Consequently, the net amount at risk is always equal to the death benefit of the policy.
Contrast to option A plan.
Original Age Conversion
The conversion of a term life insurance policy to a whole life policy at a premium rate based on the age of the insured at the time the term policy was purchased.
LOMA's Glossary appears on this Web site by special permission of LOMA. However, LOMA makes no representation or endorsement, express or implied, regarding AccuQuote or its products or services.
LOMA's Glossary of Insurance Terms (c) 1997 LOMA (Life Office Management Association, Inc.). Used with permission from the publisher. All rights reserved. Copying or downloading this information without permission from the publisher is a violation of federal and international law. For information on purchasing a copy of the Glossary or for additional information on LOMA and its educational programs, visit LOMA's Web site at www.loma.org.
