STATE FARM INSURANCE TERMINOLOGY

0-9 06000 Series Policies Implementation of the Q kind code is handled as a phased approach. Due to the phased approach of implementing these products see 2001 CSO Table for State, Plan and Effective date. 06000 Series UL State Farm's current Universal Life policy written July 20, 2008* to the present. It is a mixed load policy. *CA & NJ started October 25, 2008. 10 Year Term Rider Provides temporary insurance protection during a ten year period. The rider is renewable. Premiums are payable throughout the term of coverage. 100, 1000, 700 Series Policies issued before 1948. 111 account Premium credited account. 114 account Loan account. 136 account A temporary debit account used to reconcile grouped premium payments such as pre-authorized checks (PAC), government allotment, agent's payroll deduction, employee's payroll deduction, and salary allotment. 138 account Credit card account. 139 account A premium debit account. 145 account Returned check account. 181 account Account used to transfer amounts between policies. Used to clear outstanding items on other listings primarily 284, 277, 255, and 136.

190 account The account that reflects electronic flow of fund (EFF) transfers on an account history or accounting screens. 195 account The account that is used for electronic funds transfers (EFT) to SFPP for Returned Checks and Credit to Clear items. 1035 Exchange An Internal Revenue Code provision which allows the tax-free exchange of one insurance contract for another. The exchange is not taxable and the tax cost basis of the old contract is carried over to the new one. However, the exchanged contracts must be similar products and the insured and owner may not change. 1099 (form) IRS definition: Form 1099 is a form promulgated by the Internal Revenue Service (IRS) and is used in the United States income tax system to prepare and file an information return to report various types of income other than wages, salaries, and tips (for which Social Security Administration Form W-2 is used instead). 1099INT A tax form for reporting interest earned on various non-tax qualified plans. 1099R A tax form for reporting distributions from a contract of various types. 201 account The 201 account is associated with suspense amounts on variable products; both applications and policies. General comments about the 283 account apply to the 201 account. 240 account Claims suspense account. 242 account Unclaimed Funds Account. Used to keep funds that we cannot place back into an in-force account. 254 account

Transaction account used for paid-in-advance (PIA) premiums. 257 account Commonly used in reconciling monthly payments received for policies paid through special monthly modes to minimize exception handling each month. 258 account PDR - Premium deposit reserve account. 277 account Used to balance entries associated with payments(disbursements) to policy owner s, beneficiaries and third parties. 283 account The 283 account is a credit account only. It cannot have a debit balance. 284 account An account that is used as a pass thru and correction account. This account is often used if cash cannot be applied to an individual policy, processing a returned check transaction, or when making entries to help clear outstanding items on listings. 3B Issued, Not Paid for record status. 35 Day Hit The automatic computer activity which occurs 1 month plus 5 days after the premium due date. It is the first action of unpaid premium handling (UPH). 319 account A forced accounting entry. 4C Premium paying record status. 4D Disability Claim record status. 4G Fully paid up record status. 4H

Reduced Paid up record status. 422 account Cash value account for annuities. 424 account Cash value account for life insurance. 430 account A dividend account for death, maturity, or surrenders. 440 account Dividend accumulation account. 4800 Series Life policies issued from 1-1-48 through 12-31-63. 5 Year Term Rider Provides temporary insurance protection during a 5 year period. The rider is renewable. Premiums are payable throughout the term of coverage. 522 account A miscellaneous gain or loss account. 5498 form An annual tax from that reports contributions and account values for the prior tax year to the policy owner. 600 account Accounts that only apply to Variable Life or Annuity Products. 6400 Series Life policies issued from 1-1-64 through 12-31-69. 7 Year Test Period A 7 year period which begins effective the original policy date; or, the material change effective date, or when a policy is reinstated after it has been out of force for 90 days + Grace period and the policy (and benefits) has been in force greater than 7 years. 90 days + Grace Period. Variable Universal Life is calculated as 151 days (90 +61). 734 account Deposits in transit account. Entries are internally generated by the General

Accounting transaction. All 734 entries will appear on the Life Company transaction register. 748 account The General Fund Account at Bank One in Bloomington. All U.S. Regional Office and Home Office checks are drawn on this account. 757 account General Fund Account at the Montreal Bank in Montreal, Canada. All Canadian checks are drawn on this account. 7000 Series Life policies issued from 1-1-70 through 12-31-77. 7702 Specifies that a contract must meet at least one of two alternative actuarial tests in order to be considered life insurance. They are: 1. The Cash Value Accumulation Test (CVAT); or 2. The Guideline Premium Test Both tests regulate the relationship between the premiums, the death benefits, and the cash values of a given contract. 7702A A life insurance contract meeting the requirements of section 7702 will be characterized as a Modified Endowment Contract (MEC) if it fails to meet the 7-pay test. The 7-pay test compares cumulative premiums paid to the cumulative MEC Reference Premiums during a 7 year period. If at any time during a 7 year period after issue or after a material change, cumulative premiums paid into the contract exceed the cumulative MEC Reference Premiums, the policy will become a MEC. 7800 Series Life policies issued from 1-1-78 through 12-31-81. 8200 Series Policies Policies issued between January 1, 1982 and December 31, 1985. 8200 and Later Series Life policies issued after 1981. 8200 Series UL

State Farm's first Universal Life policy issued 1984-1985. It is a front load policy. 86000 Series Policies Policies issued after January 1, 1986. 86000 Series UL State Farm's second Universal Life policy written 1986-1993. It is a mixed load policy. 900 account Accounts that only apply to Universal Life or Annuity products. 94000 Series Policies Policies issued beginning January 1, 1994. 94000 Series UL State Farm's Universal Life policy written January 1, 1994 to July 19, 2008. It is a mixed load policy.

ABA Routing Number The nine-digit number (found on the lower left-hand corner of a check) assigned to a financial institution to transfer funds through the Federal Reserve System. Absolute Assignment The transfer of all incidents of ownership of a life insurance policy to a separate entity. The assignee becomes the new owner. Academy of Life Underwriting (ALU) A program specifically designed for professional underwriters. Designations include: a certificate in Risk Selection, Associate of the Academy of Life Underwriting (AALU), and Fellow of the Academy of Life Underwriting (FALU). Accelerated Death Benefit

A life insurance option that provides policy proceeds to insured individuals over their lifetime, in the event of a terminal illness. This is in lieu of a traditional policy that pays the beneficiaries after the insured's death. Such benefits kick in if the insured becomes terminally ill, needs extreme medical intervention, or must reside in a nursing home. The payments made while the insured is living are deducted from any death benefits paid to beneficiaries. Acceleration of Payments Some of the Guaranteed Income (Single Premium Immediate Annuity) policies issued on or after July 1, 2003 provide that the payee can access all or part of the remaining certain period income. Accidental Death A supplementary life insurance policy benefit that provides a death benefit in addition to the policy's basic death benefit if the insured's death occurs as the result of an accident. Effective July 1, 2004, this is no longer available except on Corporate Pension Plans and Keoghs. Accounts "Account" as it is used at State Farm is best described as a vehicle for holding a financial transaction. It is a record of any such transaction that holds data. Account History The history of all the activity on a particular policy or reference number over a period of time. An account history is generally only provided going back six years, however, the history can be accessed back to 1993. Account Identifier Is fixed at 6 digits and is comprised of a type code, regional office code, and 3-digit account number. The individual account identifier is unique to each Special Monthly Type. Account Number An account number is a number assigned to a specific type of accounting activity. For instance, all premium receipts are kept track of in the 111 account. Account Trailer A unique combination of numbers and letters that identifies a policy as being

on a particular special monthly mode. Account Value The cash value of a Universal Life Policy from which the monthly cost of insurance, fees, or expenses are taken and upon which interest is paid. Account Value at Death The account value at death is comprised of the account value stored in the PMR plus pro-rata interest and cost of insurance refund. Account Value at Death is used only under the Option 2 death benefit and establishing the corridor insurance Accumulated Dividend amount at death for both option 1 and 2. The increased value that results from leaving dividends with the Company to earn interest under dividend Option 3. Accumulated Principal The total principal plus the guaranteed interest portion of the stated interest rate paid on contract-WPD premium is never included in the accumulated principal. Accumulation The increased value that results from leaving dividends with the Company to earn interest under dividend Option 3. Accumulation Phase The period of the policy during which cash value is accumulated through premium payments and investment return. ACH Deposit The transfer of funds between financial institutions providing next day time service. The client is not charged for this service. Acquisition Cost The cost of placing new business. It typically includes Agent commissions, fees for medical and credit reports, underwriting, marketing, and other administrative expenses. Acted Upon Count Count given for each application life issued or incomplete. Action(s) WLM: the manner or method of performing a transaction/process.

UNDERWRITING: Underwriting decisions related to a case. Allowable actions include: table rating, flat extra, aviation exclusion, WPD/WMD amendment, and RNA. Active Case A case that is placed in a users Workload Management in-tray and is ready to be worked. Active (status) An item in a users Workload Management in-tray that is currently being worked on. Activities of Daily Living Bathing, preparing and eating meals, moving from room to room, getting in and out of bed or chairs, dressing, using the toilet. Activity This is work that needs to be completed on a case. A case may have several activities. Activities are assigned to users to be worked through activity assignments. Activity Assignment The process of assigning activities to authorized and available assignees based on pre-defined assignment criteria or manual assignment. Activity Owner The user who is currently assigned to the Activity. There are three ways a user can become an Activity Owner: 1. Case Assignment assigned the Activity to the user 2. The Activity was reassigned to the user by another user 3. The user took action on an Activity that had been assigned to another user. The system automatically reassigns the Activity to the user taking action. Actual Cash Value The internal value builds' up in a policy, guaranteed by the contract. This results from investment of premiums in excess of expected mortality in the early policy years. Cash value can be taken out of the policy in the form of a loan, withdrawal, or by terminating the policy Actuary A mathematician employed by an insurance company to calculate premiums, reserves, dividends, and insurance, pension, and annuity rates, using risk

factors obtained from experience tables. These tables are based both on the company's history of insurance claims and other industry and general statistical data. Add Coverage Addition of a benefit or rider by specific request from the policy owner. Add Index The process of changing or adding additional index values for an imaged document. Added Benefits Riders/benefits added after the base policy is issued. Additional Annuity Purchase Date (AAPD) A13, P13 and prior policies Additional Billing Party (ABP) An individual or organization, other than the policy owner that has an interest in the policy. Additional Contribution The Economic Growth and Tax Relief Reconciliation Act of 2001 changed the contribution limits for all Tax Qualified contract for individuals' attained age 50 or greater. The Act increased contribution limits starting in the tax year 2002. Also known as the "catch up provision". Additional Days of Protection This term is used when calculating the last date of protection for a future excess policy loan. Additional Deposit Rider Enables the insured to make a single deposit at the time of payout to increase the amount of the monthly payments. Beginning January 1, 1994, ADR is available with Estate Protector, Whole Life, Universal Life, and Deferred Life Annuity policies funding tax qualified retirement plans. ADR is no longer available with IRAs, SEPs, and TSAs. Additional Insured Someone other than the principal insured. Usually, this is the spouse on life policies.

Additional Named Insured An individual or entity, other than the first named insured, identified as an insured in the policy. Additional Policy Owner Two or more individuals or entities that own an insurance policy or annuity contract. Adjusted Closing Balance The fair market value of the IRA at the end of the computation period, plus the amount of any distributions taken from the IRA during the computation period. Adjusted Opening Balance The fair market value of the IRA at the beginning of the computation period, plus the amount of any contributions (including the excess contribution) made to the IRA during the computation period. Administration (of Estate) The management of a deceased's estate including collection of estate assets, distribution of assets to appropriate parties(creditors and beneficiaries) and the complete accounting of an estate. Administrative Fee Usually a fixed-dollar amount per year, used to pay for record keeping and policy reports. Administrative Incomplete Applications that are set up in error are unissued by an administrative incomplete. Administrative Processing Team (APT) A Life Service support unit that is responsible for address changes, preparing documents for imaging (batch prep), additional billing parties, bar-coding, mail distribution, returned mail, and replacements. Administrator Individual appointed by the court to manage the estate of a person who dies without a will. Adverse Selection

The tendency of persons with poorer-than-average health expectations (higher risk) to apply for or continue insurance coverage to a greater extent than persons with average or better-than-average health expectations (lesser risk). Adverse Underwriting Decision An adverse underwriting decision is said to occur when: 1. A policy is issued subject to the applicant agreeing to a change in the original application, including any rating, restriction, reduction in amount or denial of a benefit on the principal or additional insured. 2. A base plan eligible for the Non-Tobacco Premium is applied for, the tobacco question is answered no, but we do not issue the policy with the non-tobacco premium rate. 3. A decision is made to decline coverage on the principal or additional insured. 4. We refuse to reinstate coverage, we make a counter-offer, and when we refuse to remove or lower a rating when reconsideration is formally requested. 5. Information received from any source is significant enough to lead us to incomplete the case, terminate coverage provided by the binding receipt and continue our handling on a non-binding basis. 6. The policy is being issued without the additional insured's coverage because underwriting information has not been received for the additional insured. Adverse Underwriting Information (WLM) Adverse underwriting information in the Client Database. To view adverse underwriting information in the Client Database, the user must be granted access to adverse underwriting information when a Profile is created or updated. Affiliate Record Details Life record details in the Client Database. To view Life record details in the Client Database, the user must be granted access to Affiliate Record Details when Profile is created or updated. Age of Majority Age at which a person has full legal rights and responsibilities; usually, age

18. Agency Adjustment Request Form A form on the Intranet completed and sent when a manual adjustment is needed on a policy. Agency Administration Department Regional Office department that coordinates State Farm assignments, awards, and production credits. Agency Business System (ABS) The Agency Business System is the application framework for the Agent's workstation that emphasizes application integration, Agent workflow and support for insurance and financial services products. ABS consolidates the Agent's access points to customer information. Agency Field Consultant (AFC) An Agency Field Consultant (also called an AFC) is an AFO leadership role. An AFC can be assigned to a Market AFO or a Developmental AFO (DAFO). (The AFC is also called a DAFC when assigned to a DAFO.) AFCs report to AFEs. AFCs may work in the same office as an AFE or, when a DAFC, may be considered a telecommuter working from their home or another State Farm site. Agency Field Executive (AFE) An Agency Field Executive is a leadership position that is the head of an Agency Field Office (AFO). An AFE's primary responsibility is to manage the business. An AFE can be assigned to Market AFOs or DAFOs. (An AFE is also called a DAFE when assigned to a DAFO.) DAFEs will work in a State Farm (owned or leased) office location. Agency Field Office (AFO) An Agency Field Office is a type of State Farm Office which contains the following roles: AFE, AFC, AFS and AFO Employees. There are two types of AFOs: Market AFOs and Developmental AFOs (DAFO). Agency Field Specialist (AFS) An Agency Field Specialist is an employee located within an AFO. Their primary responsibility was originally helping and training Agents on technical issues. Each AFO has the ability to assign different responsibilities to an AFS agents'

depending on that AFO's needs. Agency Sale Resources (ASR) The Agency Sales Resource Center (ASR) is comprised of two locations: one in Irving (Dallas), Texas, and another in Toronto, Ontario. The ASR in Texas handles all of the Agency Operations Processing activity to support the Agency workforce (Agents, Staff, AFOs, etc.) for the U.S. The Canadian ASR handles all Agency-related processing for Canada. Agent Status Record (ASR) The ASR screen visually displays agents summary record information for agents in the Life Operation. Agent A party who has a contract with State Farm to sell State Farm products. Agent Code A four position code used to identify an agent. A unique code is assigned to each State Farm agent. Note that this code is changed in situations such as when an agent incorporates or moves to a new region. Also note that a state-agent code includes a two position state code number unique within each state. Agents Communication Management System (ACMS) A system host program that sorts and edits transactions from a State Farm Agent. These transactions are then passed to the operating divisions (Auto, Life, Fire, Client, etc.). Agent Compensation The pay received by an agent from the sale or service of insurance policies. Agent Draft Authority (ADA) Program allowing Agents to handle the settlement of certain claims by issuing and signing drafts to Policyholders. The type of claim and the amount or value of the claim must fall within certain limits. Agent's Life Statement A detailed summary listing of all transactions on an agent's written or serviced business. The statement is produced on the 15th and final day of each month. Agent's Payroll Deduction

State Farm agents may elect to have premiums for State Farm Life policies paid by monthly deductions from their pay. Agent's Simplified Employee Plan (ASEP) These plans were funded with State Farm Mutual Funds and the sale of them was discontinued in 1999. All existing plans were amended to SEP/IRA plans. Agent's Summary Record A record of agent information, including state/agent codes, address, phone number, and active or inactive status. Also utilized in Notice Letter Printing (NLP) when an incorrect state/agent code is entered. Agent's Trusteed Keogh Plan Self Employed Individuals Trusteed Retirement Plan for State Farm Independent Contractor Agents. Agent's Trusteed Plan (ATP) The Agent's Trusteed Plan allows State Farm agents and managers to purchase or invest in various funds, such as life insurance, annuities, a side fund, the Growth Fund, Balanced Fund, or Interim Securities Fund. This plan allows agents to invest their finds in much the same way as employees are able to invest in mutual funds. Alanine Aminotransferase (ALT) An enzyme used primarily to detect liver disease. Also called SGPT. Albumin Albumin constitutes approximately 60% of the total protein in the blood. It is a measure of liver function and overall nutritional status. Alkaline Phosphatase (AP) An enzyme used primarily to detect liver and bone disease. Allotment The total deducted from a service member's pay for policies on Government Allotment. Allotment Account Trailer An allotment account number is required on all special monthly modes. It contains two parts: 1. An account identifier is 6 digits including a type code, regional office

code, and a 3-digit account number. 2. An individual account identifier reflects each special monthly type. Alpha Master Record (AMR) An alphabetical file of all State Farm's policy owner s names. This record is used in UNIX when a policy number is unknown. Alpha Search (AS) A UNIX search of State Farm's policy owners throughout all of the Life Company Zones, to determine if policies exist on a particular insured. Alternate Address An address on a record in addition to the payees permanent address. The Alternate Address only affects payments. Amendment of Application Part of the policy that clarifies unclear or missing information on an application or Request Letter. Also used to communicate with the insured about a decline of coverage, a rating, or exclusion. American College An institution that offers professional certification and graduate degree education to men and women seeking career growth in today's sophisticated and competitive financial services marketplace. The college awards the CLU, RHU, and ChFC designations. American Council of Life Insurance (ACLI) Located in Washington, DC, it is an association of both participating and nonparticipating life insurers who are concerned with issues that affect the life insurance industry on the federal, state, or local level. It lobbies on behalf of the industry and the information it compiles is available to the public. Amortization Settlement of a mortgage in installment payments. Amount at risk The insurance company's death claim risk on a policy at a point in time. Essentially, it is the difference between the total insurance benefit and the policy's cash value (reserve, account value). The net amount-at-risk is used to determine the mortality charge assessed to the policy at a given point. Anniversary

Refers to the date one year (or more) following the effective date of the contract Anniversary Handling Any updating of the policy master record and notification about cash values, dividends, and coverage change occurs on the anniversary of the policy date. Annual Contact Contact made to the policy owner annually regarding their policy or contract. Can be in the form of an Annual Notice, Anniversary Notice, or an Annual Notice of Policy Status. Annual Notice Individual statements, providing specific policy information and values, which are sent to the policy owner s on each contract anniversary. Annual Notice of policy status Type of anniversary notice a UL policyholder receives if State Farm doesn't have to bill for the premium (mode is special monthly) or policy loan interest. Annual Renewable Term Policies (ART) Term life insurance that gives the policy owner the right to renew the coverage at the end of each year. The renewal right continues for a specified number of years or until the insured reaches the age specified in the contract. Annualized total mode gross premium Traditional policies: The mode premium times the frequency that the premium is collected annually. Universal Life: The planned premium or the minimum monthly premium times the frequency the premium is collected annually. Annuitant Person during whose life an annuity is payable. Usually, the person who receives the annuity payments. Annuity Under an annuity, an annuitant (policyholder) accumulates funds at interest for later withdrawal. Annuity policies are issued with an agreement to pay a specific amount at regular intervals during the lifetime of one or more

persons (straight life annuity), or at regular intervals for a certain period (annuity certain). Annuity Payout (APO) When an annuity policy reaches its withdrawal or maturity date, a policy owner can begin moving the money left with the Company in an annuity payout. The annuitant (policyholder) then receives money from the annuity in installments. Annuity/Supplementary Contract (ASC) The source of funds for a supplementary contract will usually come from the death benefit, surrender or maturity of a life insurance contract. Instead of taking a lump sum payment, the payee will select to receive a series of payments, usually monthly. Annuity/Supplementary Contract Death (ASCD) A Life Insurance Annuity or Supplement Contract on which the insured has become deceased. Anti-Money Laundering (AML) Engaging in financial transactions that are income derived by criminal activity. In regards to annuities if a loan/withdrawal/or termination request is received and is suspicious or frequent and unusual fund movements are requested, the policy needs to be reviewed for anti-money laundering. Anti-selection The tendency of people who possess a greater likelihood of loss to apply for or continue insurance. These people are also more inclined to take advantage of favorable options such as renewal and conversion of term life insurance policies. Also referred to as adverse selection and selection against the insurer. App File The paper or imaged file containing the original application for insurance along with other documents that are retained for legal purposes. Applicant The person or party applying for insurance. Application Can include the application, medical history, questionnaires, anything

pertaining to the file, and any other documents from the proposed insured. The process of entering Life applications into the Life Legacy System, Risk Advisor, or other associated screens. Application Statistics Transaction (AST) Application statistics are available at any time to the Life Operation via the Application Statistics (AST) Function. The AST function can be used to obtain a report giving life insurance application totals and volume by state, requesting region, and company, or an Annuity report giving only a count for annuity applications. Application Statistics are requested via UNIX, using the screen mnemonic of AST. Approval The process where the system automatically reassigns a new activity to the appropriate profile to work based on a selected type of activity. Activities are Check Approval, Claim Approval and Quality Review. Archive Documents Completed or draft copies of NLP documents. Army Post Office/Fleet Post Office (APO/FPO) The Department of Defense and the United States Parcel Service jointly operate a postal system to deliver mail to the military. Army Post Office Army & Air Force Post Office Aspartate aminotransferase Also called SGOT; is an enzyme used primarily to detect liver disease. Assignee Someone who receives either part or all the ownership rights under a life insurance policy through an assignment. Assignment Transfer of part or all of the ownership rights by the policy owner under a life insurance policy. WLM: The criteria used to distribute activities. Assignment criteria can include Company, Policy Type, Claim Type, Request Type, Department, Policy State/Province, Start Date, Agent Code, or AFO. These criteria can be used

individually or in combination. Assignment Management System (AMS) The Assignment Management System is a very complex system which manages the movement of policy and non-policy customer data from one "Agent" to another. Assignments can be done on an individual or block basis. The primary users of AMS are the Agency/Sales Resource Centers (ASR) and the Agency Field Office (AFO). Assignment Status There are three Assignments in Workload Management (WLM): Active, Pended and Complete. The status of the Assignment determines which Intray view the Case is in. Activities that have not yet been completed (i.e., new or in progress). Pended - Activities that are waiting for requested items or actions to be taken. A Pended Case is automatically changed to Active when requested information is received or waived, or when the Pend followup date is reached. Completed - Activities that are finished. Activities will stay in the Complete In-Tray for 31 days from the date the case is marked complete. Assignment Wizard The tool used to create and modify work assignment criteria. Associate Service Center (ASC) The Associate Services Center (ASC) is a centralized resource that provides responses to Human Resources, Benefits, Employee Compensation, Retirement and Relocation inquires made by Employees, Agents and their staff, and Retirees. The ASC also processes Human Resources, Group Insurance, MER and DCA transactions. Assurance Company State Farm Life Company established the Assurance Company in order to sell life insurance to people living in the states of Wisconsin and New York due to their particular state laws. Attained Insurance Age The insured's age as of the policy anniversary date. Attending Physician Statement (APS) Information from a proposed insured's physician covering medical history

and results of medical examinations. It is used to determine the appropriate underwriting classification for the proposed insured. Audit Selection Transaction (AUD) A list of issued policy numbers may be obtained from applications received in the office for each region from (beginning date) to (ending date) through AUD function within UNIX. Austin Operations Center (AOC) Authority to Receive Information that is not readily known to anyone other than that individual. These descriptors establish the authority of the caller to receive policy information. Authorization (AUTH) Permission from the policy owner which allows release of information to a named party. Automated Clearing House (ACH) The transfer of funds between financial institutions providing next day time service. The client is not charged for this service. (replaces ACH Deposit) Automated Streamlined Transaction (AST) ASTs (Automated Streamlined Transactions) are Microsoft Access macros that interact with host screens to reduce repetitive, manual entries in the zones. Automatic Premium Loan (APL) A policy provision elected by the policy owner which allows the system to automatically pay a premium that remains unpaid at the end of the grace period. APL "borrows" cash value from the policy in the form of a loan. Automatic Records Management System (ARMS) ARMS automatically track inactive files as well as miscellaneous department documents that are transferred to Administrative Services document storage operations. The file lookup tool allows access to search for, determine the status of, and request available files from document storage. Auxiliary Fund (AF)

Sometimes referred to as a side fund, the AF are payments made with pretax dollars that are allowed by some TQ plans in addition to the normal tax qualified payments. AF payments are recorded separately in the policy owner master record. Auxiliary fund payments may be received on traditional as well as Flex policies. Availability A way to indicate when an individual is or is not available (due to vacation, medical leave, etc.) to receive automatic work assignments in Workload Management (WLM). Awards Added incentives to encourage agents to sell life insurance.

B B-Batch Daily notices of action required on certain contracts. Backdating to save age The effective date of the policy is the day before the insured's last birthday. If a policy is backdated to save age, the insured will be charged a lower premium because of the lower issue age. You cannot backdate more than six months before the application date. Backdating is not allowed on Universal Life and Single Premium Life. Background report The background report concentrates on the applicants employment history, residence stability, and financial information. Is used as supplemental information for evaluating risk. Back-up withholding Withholding required by the IRS on non-tax-qualified interest only contracts. This is required due to name and social security number not matching or underreporting of income to the IRS. Banding A band is a range of coverage that is grouped by a certain premium rate. The

higher amount of coverage you purchase, the less you pay per-$1000.00. For example, a Select Term for $200,000 may cost the insured a premium of .50 cents per-$1000.00, or $100.00 (.50 x 200) per month. If that same person purchased $250,000, however, the premium may be reduced per-$1000.00 to .40 cents, allowing the individual to purchase more coverage for the same monthly premium (.40 x $250,000, or $100.00). Bank Disclosure Form (BDF) FDIC bank regulations state that where bank products are sold, certain disclosure wording is required on Non-deposit Investment Products (NDIPs). Specifically, the banking "Interagency Statement" requires that customers are fully informed as to which products are and are not insured by the FDIC. Certain products are considered Non-Deposit Investment Products (NDIPs). These products are not FDIC insured and require special disclosure to our customers. Bank of Montreal Life operating account bank for Canada. Barcode Labeling The use of barcode labels to assist in the indexing and validation of documents. Base plan Represents the policy type and the face amount of coverage selected by the insured or owner, minus any additional benefit riders. Base policy The initial amount of coverage for the principle insured on a Life policy. Base rate The rate that is established periodically by the company for each new and renewal guarantee period. Basic amount The principal insured's initial amount of coverage stated in a UL policy, plus any increases, less any decreases. The minimum basic amount is: 1. $25,000 for 8200 series. 2. $50,000 for 86000 series.

3. $50, 000, at ages 54 and under, for 94000 series. 4. $25,000, at ages 55 and over, for 94000 series. Basic Death Benefit Defined Assurance Policy (Pre-86000 Series) Under Option 1 the Assurance death benefit is comprised of the greater of the insurance amount (base plus increases) plus gross premiums paid or Corridor Insurance Amount at Death. Basic Death Benefit Defined Option 1 Under this option the death benefit is equal to the greater of the insurance amount (base plus increases) plus net premiums paid, net premium pro-rata interest, and Cost of Insurance Refund (COI) or the Corridor Insurance Amount at Death. Basic Death Benefit Defined Option 2 Under this option the death benefit is equal to the greater of the insurance amount (base plus increases) plus account value at death or Corridor Insurance Amount at Death. This approach is the same for Life and Assurance policies. Batch A group of approximately 50 sheets of like document classes. Batch Folders The colored folders used by each Life Operation to send a batch of bar coded documents to Insurance Records/CIOS for scanning. Batch Prep The process by which documents are grouped in batches by document class for imaging. Beneficiary The person or organization to which the proceeds of a life insurance policy are paid when the insured dies. Beneficiary Change Request A change request that can be made by the policy owner at any time. Often, a change in circumstances or life events may change the policy owner's wishes for distribution of life insurance proceeds. A change in the family structure such as additional children, divorce, or death may alter the plans of the owner. A change request can be made via a signed request letter. If there is

an assignee or irrevocable beneficiary on the policy, the request must also be signed by that party. Beneficiary Designation Identifies all beneficiaries and the method of settlement for the amount payable. Beneficiary Insurance Purchase Option (BIPO) A rider attached to a single life policy that allows a beneficiary to purchase a life insurance policy upon the insured's death. The new policy may be issued based on the beneficiary's age at the time the original policy was issued. Policy size is generally a multiple of the original face amount, up to a specified maximum. Upon the death of the original insured, the policy's proceeds are used to offset the reserves necessary to establish those required on the new policy. For instance, if the original insured's death occurs in the 20th year, the beneficiary's new policy requires reserves equal to those of a 20 year-old policy. Benefit Expands coverage provided under the base policy. For example, Accidental Death pays benefits if death results from an accident. Also known as a nonlife rider. Benefit Management Account (BMA) Settlement option State Farm has offered since 1988. It basically is an interest bearing checking account as an alternative to a one sum settlement. Benefits The monies paid or services performed under an insurance contract. Bilirubin Bilirubin is a breakdown product of red blood cells and is used to measure liver function. Billable amount The billable amount is the amount that the policy holder wishes to be billed. Billable Loan Repayment (BLR) A specified dollar amount to be applied to the policy loan. Billing Code

Each special monthly mode has its own number which identifies the type of special monthly mode. The billing codes are: 4 = Pre-Authorized Collection (PAC) 5 = Salary Allotment 6 = Government Allotment 7 = Agent's Payroll Deduction 8 = Employee's Payroll Deduction 9 = State Farm Payment Plan (SFPP) Billing Code 0 Non-billing. The policyholder is not receiving bills. For example, when special monthly plans are no longer eligible for special monthly handling, you can establish Billing Code 0. Use caution here, because the policyholder won't receive any system generated premium notices when the policy is on nonbilling status. Billing Code 2 Direct billing. When special monthly plans are no longer eligible for special monthly handling, we establish Billing Code 2. Billing Code 2 allows the policyholders to receive individual billing notices at the reduced premium rate until the next policy anniversary. Billing Trailer Refer to Account Trailer. Billing Online System (BOS) Billing Online System provides billing and payment information for all lines of business. It can assist with questions or add processing capabilities using the separate types of functions. Binder A temporary insurance contract that provides coverage until the policy is issued. Binding Receipt (BR) Provides temporary insurance coverage for death beginning with the date of application. Black Out Period Once a Universal Life (UL) policy has been Lapsed for over 90 days from the

Paid-to-Date, a break in coverage begins. This break in coverage is referred to as a "Black-out Period". The Black-out Period ends on the effective date of the Reinstatement. During the Black-out Period the Insured is not considered covered, even after the policy is Reinstated. This applies in the event that either Death or Disability Claims are filed during the Black-out Period. Blanket Allotment DFAS Allotment Payment Process. For companies receiving more than 25 allotments per month, DFAS sends a blanket payment, either by electronic funds transfer or check, to a location designated by the insurance company, usually a financial institution. Simultaneously, the DFAS site sends a detailed list containing the Service member's name, social security number, branch of Service, and amount for each allotment included in the blanket payment. The detailed list may be a magnetic tape, a computer file, or a hard-copy printout. Blanket check (aka Blanket EFT) (or Blanket EFT). The check or electronic fund transfer (EFT) received by Allotment Central from each branch of the service. The blanket check or EFT contains all the premiums from the particular branch of the service. Blood Profile A series of blood chemistry tests requested by the underwriter. Bloomington Operations Center (BOC) Book of business A total of all insurance accounts written by a company or agent. It may be treated in different ways. For example: an insurer's book of automobile business, or an agent's overall book of business, or an agent's book of business with each insurer. Boot Values released to policy owner during a 1035 Exchange. Buy-Sell Agreement A formal agreement to dispose of a business. It should include reference to the parties to the agreement, the price and other specific requirements of the sale, and any other possible problems that may come up. It is a legal

contract under which a business owner is obligated to sell his or her interest in a business if he or she dies or becomes disabled, and either the business itself or the other owners are also obligated to purchase that interest.

Call Back (CB) Canada Revenue Agency (CRA) Agency that requires federal withholding on certain distributions. Different withholding rates and procedures apply to residents and non-residents and Provincial withholding may apply. Distributions must be reported when necessary and are reported by magnetic media. Capitalization Refer to Loan interest Capitalization. Case A Workload Management (WLM) process that consists of activities, assignments and information for a particular policy. Case Assignment A Workload Management (WLM) process that consists of assigning a case to an authorized and available assignee based on pre-defined assignment criteria or manual assignment. Case Assignment History A Workload Management (WLM) process that consists of creating, retrieving, and updating archival assignment data for the case to be displayed in the case history. Case Creation A Workload Management (WLM) process that consists of building a case and activities which is initiated when an assignment is made. Case folder

The electronic folder which holds underwriting information on individual cases in Risk Advisor. Case History This is a log that captures actions taken within the Workload Management tool. Examples of actions include: 1. 2. 3. 4. Manually Assigned To Assignment Pended Reassigned, Activity Completed Case Completed

History entries are recorded and display in the order in which they occurred with the most recent entries showing first. Case Management A Workload Management (WLM) process that consists of managing the life cycle of a case and includes Case Creation and Case Assignment History. Case Reporting A Workload Management (WLM) process that consists of returning a case, activity, and assignment information that can be used to build different types of reports. Case Search A Workload Management (WLM) process that consists of Searching for a case by different search criteria including policy number, claim number, customer name, agent code, AFO code, agent name, request type, case status, and case creation date. Case Status A Workload Management (WLM) process that consists of whether the case is active or completed. Cash Control Screen used to open workstation for entering cash, balancing cash, and closing cash for the day. Cash Control Record (CCR) The CCR provides the means to balance cash/equivalent transaction. Each time a cash/equivalent transaction is entered, a record is generated which

contains the transaction code, policy number and surname, and cash amount. The record generated is identified by terminal identification (ID) and batch number. This record is generated entirely by the terminal itself and requires no formatting on the part of Life Operation personnel. Cash Dividend Option The dividend option that provides for the dividend to be sent in cash to the owner on the policy anniversary. Cash on Delivery (COD) An agent may take an application without collecting the initial premium. These apps are called COD and money must be collected prior to final action. Cash Surrender Value The amount payable to the policy owner upon the requested surrender of a permanent policy or annuity contract. Cash Value The internal value buildup in a policy guaranteed by the contract. It results from investment of premiums in excess of expected mortality in the early policy years. Cash value can be taken out of the policy in the form of a loan (or a withdrawal on Universal Life products) or by terminating the policy. Cash Value Accumulation Test (CVAT) The cash value accumulation test limits the relationship of the cash value and the death benefit under a contract. Under the CVAT, by the terms of the contract, the cash surrender value of the contract cannot exceed at any time the Net Single Premium for the death benefit. Cash Value Corridor The cash value corridor is satisfied if the death benefit at any time is not less than the applicable percentage of the cash surrender value at that time. Cash Value Effective Date The cash value effective date is generally the next premium due date for in force policies. For paid up policies, it is the next policy anniversary date. If a loan is processed with a premium currently due (and the mode is not special monthly), then the cash value effective date is the paid-to-date after the current premium is paid. Cash value is determined as of this date. Catastrophe

A severe event, such as a hurricane or tornado, affecting many risks. State Farm defines this as a loss occurrence which generates a combination of at least 500 claims and $500,000 of loss. Cathode-Ray Tube (CRT) Type of technology used in monitors that do not have flat panels. Central Imaging Operation Services (CIOS) The Unit responsible for imaging policy and claim records. The CIOS unit was developed by State Farm Administrative Services as a centralized document imaging (scanning, capture, indexing, and storage) operation. CIOS units in Corporate, Operation Center, and ISC locations offer production scanning support while providing efficient image capture processing. Administrative Services operates the CIOS/Optical Mark Recognition (OMR) unit because of the experience and efficiencies developed from managing similar production operations for the Company. There is also an excellent fit between management of Mail Center Operations and CIOS/OMR functions that minimizes the handling of documents, resulting in improved service to its customers. Central Operations Unit (COU) An Underwriting support unit that is responsible for application input, correspondence, policy assembly, and policy delivery. Certain period Time, under a life income settlement method, when State Farm will make payments whether or not the original payee is living. Certificate of no Illustration Given A form required in some states that certifies an illustration was not used during the sale of the life insurance. Certificate number A certificate number is coverage on an individual of a Group or Agent's Trusteed Plan. The certificate number is assigned to the individual who is covered under the plan. Certification Certification is a statement signed by a policy owner stating that the tax identification number (TIN) is correct on his/her policy contract.

Change Address (CA) The Unix transaction that changes the address on the policy master record (PMR). Change Mode (CM) The Unix transaction that changes the mode from SFPP or PAC to a mode other than special monthly. Change of Beneficiary (COB) A contract provision that allows the owner of the insurance policy to change the beneficiary whenever desired, unless the beneficiary has been designated as irrevocable. In which case, the beneficiary's written permission would be required before a change could take place. Change of Plan Any change from one type of policy to another where no provision for the change is specifically allowed in the policy contract. (i.e. permanent to permanent). Evidence of insurability is usually required. Chargeback When a customer disputes the charge to their credit card company and the credit card company requests reimbursement from the payee. . A customer has 180 days to initiate a chargeback. Charter Document establishing an organization. Chartered Financial Consultant (ChFC) A professional designation conferred upon an individual by the American College as a result of the successful completion of financial courses. This designation indicates that the individual has a broad and in-depth knowledge of the financial planning process as well as the various financial products available in the marketplace. ChFC candidates must pass a national exam in insurance, investment, taxation, employee benefit plans, estate planning, accounting, and management. Chartered Life Underwriter (CLU) A professional designation conferred upon an individual by the American College as a result of the attainment of high standards of education and proficiency in the art and science of life underwriting. The CLU program

delves deeply into the life insurance business, its place in the economy, its operation and distribution systems, and its investment basis. CLU candidates must pass a national examination that covers life insurance, insurance law, taxation, group benefits, investments, and retirement and estate planning. Check Box A box with associated text that represents a choice. When a selection is made, a check appears in the box to indicate that the choice has been selected. To remove the check, select the box again and the check will disappear. Check Digit The first initial of the insured's last name used to validate policy/claim information during indexing and re-indexing. Check Status The status (un-cashed, paid, void, unclaimed funds) of a payment or withdrawal check. Cheque Technically, a cheque is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified demand account held in the maker/depositors name with that institution. Both the maker and payee may be natural persons or legal entities. The date money is taken from the policyholder's bank account each month for policies on PAC. The policyholder chooses the date. Childrens Term Rider (CTR) Life rider that provides term insurance for each child of the insured under age 18 (at issue). Children added to the family after the rider is issued are automatically covered. Choice Text or graphics that can be selected. Examples of choices include: buttons, radio buttons, and menu items. Chol/HDL Ratio The ratio of total cholesterol to HDL cholesterol is used to assess the risk for atherosclerosis (fat accumulation in the walls of arteries). Ratios of 4 or less

are more favorable. Cholesterol Cholesterol is a fat (lipid) measured to assess the risk for atherosclerosis (fat accumulation in the walls of arteries). Claim Demand presented for payment of the benefit due under the terms of an insurance contract. Claim Approval Form (CAF) A form used in conjunction with Death Claim handling which is completed during the death claim process and provides information specific to the claim. Information on the form includes but is not limited to: name of operation center originating the claim, policy number on which the claim is being submitted, assigned claim number, name of deceased, and type of death claim. Claim Master Record (CMR) Information stored in the system on each claim. Claim Record Form (CRF) A system produced form containing information for a particular claim. Claim Review Relief (Jordan) One of two types of settlement relief that class members had the opportunity to elect regarding a class action complaint against State Farm. The other type was General Relief. Claimants Statement (CS) A form/statement that is completed by each beneficiary upon the death of an insured and is required unless the claim qualifies for a Simplified Claim Process. Class Action Unit The Class Action Unit coordinated all handling related to new policy issuance and reinstatements stemming from the Jordan settlement. The Class Action Unit handled all claims resulting in a cash award where backup withholding applied. Class Designation

Identification of beneficiaries by group rather than by individual names. Class Member Information Center (Note: We no longer have a Class Member Information Center) A specially trained group at the third party administrator (TPA) that is supervised by State Farm and performs the following functions: Handles specific inquiries from class members regarding potential claim benefits and the cost to reinstate a policy, conducting telephone interviews with applicants to pre-complete applications for new policies that were issued as part of a general or claim relief, and also to provide the claim award amount to the TPA for preparation of the claim award letters. Clause An article or added provision in a life insurance contract such as the Suicide Clause or the Incontestability Clause. Client Inquiry (CI) A search of records from all lines of business (Auto, Life, Fire, Health, and SFPP) Client Register (CR) A database which acts as the central data store for Enterprise Client data. Client data includes names, contact points, client details, and occupation, preferences, registrations, and profile information. Contract Master Record (CMR) Status of a Supplementary Contract. Cognos The web based reporting tool that is used to create and view workload summary and productivity reports. Collateral The cash value of paid-up additions (PUA) as collateral to secure a loan. Collateral Assignment The pledge of a life insurance policy as security for the repayment of a loan, which provides the assignee with rights that are superior to the rights of the original policy owner and beneficiary, to the extent of the obligation owed to the assignee. Collect on Delivery (COD)

Refer to Cash on Delivery. Collectible Premium Any premium due or currently billed for. Combination Box An area that combines the functions of an entry field and a list box. A combination box contains a list of objects that can be scrolled through and select from to complete entry field. Entry field can also be typed directly. Combination Notices Notices sent to the policy owner when more than one unpaid premium activity occurs. For example, a Credit to Avoid Lapse (CAL) in combination with loan interest capitalization will cause the computer to send a combination notice. Commission That portion of the premium paid to the agent as compensation for his services. Commission Adjustment An adjustment that is made to an agents commission to allow only one set of commissions and credits for the same (or similar) coverage on one life. Commissioners' Standard Ordinary (CSO) Table used in calculating minimum no forfeiture values and policy reserves for ordinary life insurance policies. These tables, which give minimum values that must be guaranteed to policy owner s as approved by the National Association of Insurance Commissioners (NAIC) depict the number of people dying each year out of the original population, not as individuals, but in age groups. Communication Record A single representation of "contact" made between the Response Center and a caller and is the foundation upon which Service Requests are built. Commutation A substitution of one form of payment or charge for another. Comparative Information Form Some state replacement regulations require this form to illustrate the

differences in the replacing/replaced policies. Compensation General term used to refer to the money we pay an agent for producing or servicing business. Compensation Agent The agent who originally wrote the insurance coverage. Compensation Pay An agent's pay based on policies sold and in-force. Agents receive no "salaries" just compensation pay (commissions). Completed A Workload Management (WLM) process that indicates items are complete and finished and that will remain in the completed in-tray for 31 days after completion. Compliance Coordinator Assists Life Management in the development, maintenance, and follow-up of the department compliance plan, monitors and addresses potential risk exposures, acts as liaison between Operations, Corporate Law, and Corporate Life Compliance, coordinates the handling of complaint files, and monitors company compliance programs (i.e. code of conduct). Compliance Database A stand-alone Access database used to manage Life settlement agreements. It isn't connected to the Life Unix system in any way, so updates to the data entry are all done manually. Computation period The period beginning immediately prior to the time the particular contribution made to the IRA and ending immediately prior to the removal of the contribution being returned. Computer Output Notice (CON) A computer response which is printed or viewable on the CON screen or the SFnet In-Tray. Conservatorship

A legal process during which the court appoints someone to act as conservator and be responsible for the assets of an individual who is no longer mentally competent. Consumer Price Index (CPI) An indicator of the changes in consumer prices. The CPI is calculated by comparing the prices for goods and services from a designated time period called the base year to the current price of those same goods and services. Consideration Amendment A consideration amendment exists when the policy anniversary and the premium anniversary dates are not the same. Also see policy date change. Contact Policy Number Employer's Policy Number. Contestable period The time (usually two years) after a life insurance policy is issued, when the life insurance company can cancel the policy, with no obligation to pay the death benefit. The law allows the Company to void a policy in the early years when the Company discovers that the information given on the application was not entirely true. The contestable period does not start over on Conversion (no increase in coverage). A Conversion is a contractual right provided in a Term policy, and does not require evidence of insurability. However, on a Change of Plan, the contestable period starts over because no contractual right exists. Contract A term which may apply to a Supplementary Contract, Immediate Annuity Contract, or a Life Insurance Policy. Contract Master Record (CMR) Status of a Supplementary Contract. Within ASC System Screens, you would use the CMR screen to view a contract record or search for contract number by payee's name. Contract types Identifies the agent's type of contract. Examples: TA8 Note: Type of contracts:

LA540 (Old agent contract) AA4/Modified_____(Agent contract prior to 1/1/97) AA4____(Agent contract prior to 1/1/97) AA97____(Agent contract) TICA04 (Term Agent contract effective 7/1/04) AA05 (Agent contract as of 7/1/04) No Contract A generic term which may apply to a Supplementary Contract or an Immediate Annuity (Guaranteed Income) Contract. Contribution Amount paid into a tax-qualified plan policy. Control-D CONTROL-D is a software product used throughout State Farm to manage, or access, documents created by production system processes. CONTROLD/Web-Access is a web based application which allows you to locate, view or print documents. CONTROL-D replaced TRMS. Control Ownership When the insured's age is less than 16 at the time of the application, the policy is issued with controlled ownership to the age of 21. Controlling Interest The five classes of ownership (controlling interest) other than the insured include the following: 1. 2. 3. 4. 5. Purchaser-Owner Assignee Irrevocable Beneficiary Tax Qualified status Joint Purchaser/Additional Owner

Conversion Contractual right to change term insurance to the same face amount of permanent insurance without the insured providing evidence of insurability. Conversion Credit A one-time credit given when converting term insurance to permanent insurance.

Convertible Sometimes used in the name of a term contract to show it has a Conversion privilege. This provision allows the owner to continue coverage beyond the expiry of the term contract by changing to a permanent policy. Convertible Amount Amount of coverage available for Conversion. To find it, look at the Alpha Search on the Initial Action CON or order a Commuted Value Quotation (Q screen). Copy From The process of allowing a user to duplicate profile information or assignment criteria from an existing individual profile or assignment. Corporate Money Laundering Reporting Team (CMLRT) Team established to review potentially suspicious transactions to determine if they require reporting Corporate Pension Plan (CORP) A retirement plan for corporations. Corridor Corridor is the gap between the account value and the minimum death benefit. If the minimum required death benefit exceeds the current death benefit, then the policy is in corridor. Corridor Insurance Amount at Death The Corridor percentage, applicable at the insured's current age, is applied to the Account Value at Death. If the resulting amount is larger than the basic death benefit, it becomes the base amount. Cost Basis In general, the purchase price of your shares. Also defined as the Net Total Value less any Non-Reportable Gain. Cost of Insurance On a UL policy, part of the monthly deduction the Company uses to pay for the basic plan and rider coverages. The cost of insurance is based on the insured's current age, sex, and rate classification. Another term for cost of insurance is mortality charge.

Cost of Insurance Refund A portion of insurance cost that is deducted on the monthiversary prior to death, which corresponds to the period from the date of death to the next monthiversary day minus one day. Cost of Living Benefit Rider (COLO) A rider that enables the insured to purchase additional insurance each year in response to increases in the Consumer Price index. The additional insurance provided each year is in the form of One Year Renewable Term Insurance. This was discontinued as of January 1, 1986. Cost of Living One Year Term Insurance (COLA) The system abbreviation of the Cost of Living One Year Term Insurance elected and carried in one of the five available life rider PMR fields. Cost of Living Rider (COLR) Issue of the Cost of Living Rider was discontinued as of January 1, 1986. The COLO became a part of State Farm's Life line on January 1, 1982. This rider enables the insured to purchase additional insurance each year in response to increases in the Consumer Price index. The additional insurance provided each year is in the form of One Year Renewable Term Insurance. Cotinine (COT) Cotinine in the urine or oral specimen of an applicant indicate the use of products containing nicotine. These tests are used for setting appropriate rate classifications. Creatinine Creatinine is a byproduct of the body's energy production process and is used to measure kidney function. Credit Card A payment that is made using a card issued to a person for purchasing goods and services against a line of credit established by the issuer. Credit of Premium for Disability Waiver of Premium/Credit of Premium for Disability (WPD). Credit Report A document completed by a credit-reporting agency providing information about the buyer's credit cards, previous mortgage history, bank loans and

public records dealing with financial matters. Credits An increase in an account (either in amount or value). Some sources of credits for insurance policies may be dividends, monies held in suspense accounts, or premium deposit reserve. Credits to Avoid Lapse (CAL) Automatic action taken by the computer on each system hit date to apply any available credits toward the due and unpaid premium. Use of CAL is allowed by policy provisions and helps the policy remain in force. This provision is automatically included on some Life policies, but must be elected on Assurance and certain Life policies. The computer looks for these credits in the Special Monthly Overpayment (257), Suspense (283), Premium Deposit Reserve (258), Current Dividend (426), and Accumulated Dividends (440) accounts. Cross Company Change This usually involves Assurance Company policyholders moving to a state where the Assurance Company is not licensed for business. It can also involve Life Company policyholders moving to a state where the Life Company is not licensed for business. Current Dividend Dividend to be earned on the policy anniversary. Current Excess Loan A situation that occurs when the outstanding loan plus interest is greater than the maximum loan value. Current Interest Rates Rates that State Farm is currently paying on Annuities, Universal Life policies, Variable Universal life policies, accumulated dividends, and premiums paid in advance, Second to Die Policies, and Variable Loan Interest. Current Purchase Option Includes anyone who owns a policy on someone else's life. For example, people who own policies on their spouses, or business partners who own policies on each other's lives. Cursory

Suggests a lack of thoroughness or a neglect of details. Custodian Person designated as a guardian under the Uniform Gifts to Minors Act or Uniform Transfer to Minors Act of a state. Customer Assurance Program (CAP) A program designed to assist companies in addressing the auditing and monitoring aspects of their compliance programs. Customer Identification Program (CIP) A form that is required when changing ownership and before completing the ownership change on a Variable Policy. Customer Information Management Suite (CIMS) Formerly known as Client Database(Search) Used to retrieve customer information, including date of birth, social security number, name, mailing address, household policies, etc. This data is accessed from WLM through Client Search. Customer Response Center (CRC) The Customer Response Center is designed to work in partnership with the agent's office to meet those customer expectations. Customer Service Center (CSC) Refer to Life Response Center (LRC). Customer Voice Response Unit (VRU) The physical component of the Interactive Voice Response (IVR) technology, that is set up to allow customers to make renewal payments for their Life Policies 24 hours a day, 7 days a week, 365 days a year.

D Daily increase in cash value (ICV) This amount is the cash value at the end of the discount period minus (next premium anniversary) (-) the cash value at the beginning of the discount period (loan interest paid-to-date), divided by the number of days in the discount period.

Daily loan interest factor (LIF) This amount is obtained by dividing the interest on the outstanding loan for the number of days in the discount period by the number of days in the discount period. Deactivate Profile The process of allowing a user to deactivate a selected profile. Death Benefit Policy face amount plus any dividends, less any policy loan and loan interest due. The payment State Farm makes to the beneficiary when an insured dies. Death Benefit Option On a Universal Life policy, the policy feature that determines the death benefit. The policyholder can choose between Option 1 and Option 2. Death Certificate (DC) A document containing a certified statement of a person's death. Death, Maturity, Surrender Dividend (DMS) A DMS (Death, Maturity or Surrender) dividend is payable upon the death of the insured providing the conditions in the dividend scale are met. The system calculates the DMS dividend at 5% of the cash value of the policy at the time of death, maturity, or surrender for cash. DMS dividends start at the end of the 10th policy year. Debits A debit refers to a decrease in an account (either in amount or value). A credit is the corresponding term for an increase in an account (again, either in amount or value). Decreasing Term Provides a declining amount of insurance over the duration of a term contract. Default Choice A preselected choice displayed in a field. Usually, it is the most frequently selected choice. The default choice may be changed. Defense of Marriage Act The Defense of Marriage Act, enacted September 21, 1996, is a United States

federal law signed into law by President Bill Clinton whereby the federal government defines marriage as a legal union between one man and one woman. Under the law, also known as DOMA, no state (or other political subdivision within the United States) may be required to recognize as a marriage a same-sex relationship considered a marriage in another state. Federal law indirectly restricts limits on premiums or cash value for samegender spouses. Defer To put off to a future time. The policy owner is putting off reporting the taxable gain until a future date. Deferred Annuity An annuity contract under which premiums are accumulated at interest and the annuity payout benefits begin at a later date. Deferred Fixed Annuity (DFA) This policy is a single premium policy that allows the policyholder to lock the interest rate earned for a period of several years known as the interest rate guarantee period. The policy renews at the end of each interest rate guarantee period until the final maturity date unless the customer chooses to terminate the policy. Deferred Life Annuity (DLA) Annuity that provides income at some future date. Deferred Profit Sharing Plan (DPSP) A retirement plan that gives the employee a share in the profits of the company. Each employee receives a percentage of those profits based on the company's earnings. Delayed Interest Additional interest paid with a scheduled payment because that payment is being sent after the due date (often the first payment under a new Contract.) Delete (DLT) To remove. Delete Coverage

Termination of a benefit or rider by specific request from the policy owner . Delivery Instructions (DI) Instructions provided to the agent outlining the delivery requirement for newly issued policies. Denied Other (DPX) When a claim is denied using the DPX function (denied payment-other), there will be a charge back to the agent and manager of all compensation and premium credits earned on this contract. The agent's persistency will not be affected. Department of Motor Vehicles (DMV) A state department responsible for administering driver and vehicle licensing and records. Descriptive Text Optional text that provides additional information about an entry field. It is included within the field caption and enclosed within parentheses. Example: (mmddyy). Deselect The process of removing a selection from a previously selected object. Detail Listing Will provide a complete list of all individual policies paid on the extract date. These policies will appear in policy number order by account number. Additions, deletions, and changes will not be identified as individual items on a detail listing, but the net billing difference (from previous billing) will appear in the recap. Dialog Box Dialog boxes are used for a variety of purposes throughout the Notice Letter Printing, NLP. Direct Deposit Refer to Electronic Funds Transfer (EFT). Direct Imaging Automatic imaging of the file copy of NLP letters. Direct Inward Dial (DID)

This is the telephone number the caller dialed directly. Example: Variable Unit, the caller will dial a 1-888 number. Direct Pay Monthly A mode classification of monthly premium paying policies apart from special monthly plans. This mode is available to policyholders who wish to mail their premiums directly to the Company each month. Direct Rollover - ASC Transfer of funds from any type of qualified plan to an IRA directly from one financial institution to another. The amount will be reported to the IRS. Direct Rollover (RVR) A direct rollover is reported to the IRS as a non-taxable rollover. The money is sent directly by one financial institution to the other financial institution. Disability Claim An insured who becomes disabled may make a claim for disability benefits (usually waiving or not requiring payment of the premium by the policyholder) if they are provided by the contract. Disbursements Money disbursed from a Life Insurance Policy or Life Annuity in the form of a loan, dividend withdrawal, withdrawal, surrender, transfer or rollover. Discount Factor The system calculates interest on any existing loan from the loan interest paid-to-date to the effective date of the loan increase. Then, the system discounts this amount from either the next premium anniversary or the policy paid-to-date, back to the loan increase effective date. There are two methods for discount factors depending on policy series. See glossary: New Method and Old Method. Discount Period (DP) The discount period is the number of days from the loan interest paid-todate to the next premium anniversary date. Disinterested Party Someone who will not benefit from the transaction. Displays

A display is a form of prompt which appears on the screen following your response to an earlier prompt. Distribution Money disbursed from a Life Annuity or Life Insurance Policy in the form of a loan, dividend withdrawal, withdrawal, surrender, transfer or rollover. Dividend 1. Dividends are refunds of excess premiums charged that may be returned to policyholders. This occurs when the Company has fewer losses than expected in a given period and more premiums were collected than needed. The Company declares dividends at its own discretion and does not guarantee them. 2. A distribution of cash from a fund's net income to its shareowner's. Dividends can be reinvested to purchase additional shares. Dividend Accumulation Advance Code (DAAC) Immediate handling of dividend withdrawal requests received within 21 days of a premium anniversary is allowed. When withdrawing dividends and interest prior to the premium anniversary, the 21 day hit must have already occurred before a 139 debit will be automatically set up. At the time this processing occurs, a Dividend Accumulation Advance Code (DAAC) is established in field 01 of the master record to indicate that part or all of the accumulated dividends plus interest has been advanced to the policy owner . At Anniversary Handling, a 440-139 accounting entry will be generated and the DAAC removed from the PMR. Dividend Option A policyholder may select a method of dividend payment. Options are: 1Reduce Premium, 2-Purchase Paid-Up Additions, 3-Accumulate at Interest, 4Paid in Cash, 5-Purchase One Year Term Insurance. Dividend Withdrawal Disbursement of accumulated dividends. Do Not Share (DNS) A database that reflects which policy/contract owners do not want their information shared across the various State Farm business lines. Document

A piece of paper, booklet, offline and online document, file document, official or legal documents, etc., that provide information pertaining to a particular contract or policy. Document Class Describes the scanning, indexing, and security characteristics of a group of documents. Examples include Life Policy, Life Checks, and Health Policy. Document Code A numerical value assigned to each document type. For example, document code "1" represents document type "Application". Document Identification The identification number for the image of the retrieved document. Document Labeling The use of barcode labels to assist in the indexing and validation of documents. Document Preparation The process by which documents are prepared for imaging. This includes removing staples, repairing tears, and assigning indexing information. Document Types Index value that defines the kind of document. For example, all applications (new business, reinstatement, added coverage, etc.) are grouped under the document type "Application". For WLM: Before incoming mail can be imaged into the Life Workload Management (WLM) system, a document type is identified and assigned. Document types represent Request Types (i.e. loans, mode changes, ownership changes, etc.) Drivers' Privacy Protection Act (DPPA) Legislation that adds restrictions on the disclosure of personal information obtained from state Motor Vehicle Department records. Drop-down List A list that drops down from a menu bar or field. A drop-down list only displays one item. Other choices are available by clicking on the down arrows.

Due Dividend This status enters the master record on the policy anniversary if the dividend has not been paid. One reason a dividend isn't paid is because the premium due hasn't been paid. Another reason is because of a payment date change or pro rata exists on the policy. Duration in force The number of years policy has been in force - arrived at by comparing the original policy date to the current paid to date.

E
Earned Income Derived from personal services including salary, wages, and commissions. For self-employed people this would mean profits of the enterprise or net income from the insured's occupation after expenses and before taxes. Electronic Communication with Home Office (ECHO) A Life system that provides agents with a method of requesting Life transactions and receiving an immediate response. These transactions are available during normal Life System operating hours and are processed as top priority. ECHO Computer Service Representative (ECSR) A system utilized only in Canada that provides a series of screens and programs used for a wide variety of agent related processes. ECHO Drafts Process by which an agent can request loans and dividend withdrawals up to $10,000 per policy per day. The agent will initiate the disbursement request on ECHO and receive a "draft" or error message. If a draft message is returned, the agent will print the draft on a laser printer and present the draft to the policy owner. ECHO Payment This system allows agents to submit Auto and SFPP applications, associated premiums, and loan repayments for overnight transmittal to the Operations Center. ECHO PT with Money

This system allows agents to submit miscellaneous money and remarks via ECHO. Any funds submitted via this system will be applied to the 283 or 201 fields (suspense) in UNIX to be applied to the policy or contract. Edit - WLM Toolbar option that may appear in Workload Management's Menu Bar. Effective Date (Eff) Date on which the transaction or change is in effect. Elect At the time an application is written, an applicant chooses or elects between policy provisions. A policy owner may make other elections while the policy is in force. Elective Withholding An individual can choose whether to have withholding apply or not on a distribution. Elect Out The policy owner may choose not to have an amount withheld for the federal or state government. Electronic Bill Presentment and Payment (EBPP) Electronic payments from third party bill paying services. Allows customers to view and pay their bills on the Internet. Electronic Claim Kit (E-Kit) This is a death claim checklist for the agent in the form of an e-mail. It includes hyperlinks to forms and other pertinent information relating to the claims process. Electronic Data Interchange (EDI) A computer to computer information exchange that establishes a uniform, standardized format for information, so that computer-readable data may be exchanged efficiently and cost effectively. Electronic Flow of Funds (EFF) This system allows the State Farm Bank or the Life Operation to move funds on behalf of the customer. Electronic Funds Transfer (EFT)

This is an alternative to the normal check disbursement process. Electronic Fund Transfers (EFT) are available upon request as either an Automated Clearing House (ACH) deposit of funds or a Wire Transfer of funds from the policy owners bank to our vendor bank. Electronic Inserting Machine (EIM) Equipment that sorts and matches policy issuance forms and inserts them in an envelope for mailing. Located in Administrative Services. Electronic Life Correspondence Form (E-LUC) Form used by the Underwriting Section to advise the agent what evidence of insurability or other information is needed to process an application. Electronic Signature (E-Sig/E-Signed) A means of electronically signing documents that are being transmitted electronically. Electronically Mailed Carbon Copy (EMC) The acronym appears on NLP documents below the processor's title and indicates that the agent's copy of the letter was sent to the agent electronically via email. Elite Preferred Non-Tobacco An underwriting class that equates to a person with health characteristics that are significantly better than average and meets our most stringent qualifications. Emergency Service Program (ESP) Personnel providing service when an agent is not available to service an inactive account. Service is provided for the inactive account by State Farm Insurance Companies, through the guidance and supervision of an AFE. Employee's Payroll Deduction State Farm Employees may elect to have premiums for State Farm Life and Assurance policies paid by Employee's Payroll Deduction. Premiums collected through Payroll Deduction are deducted from the second check of each month. Employer Identification Number (EIN) Also known as the Federal Tax Identification Number, it is used to identify a business entity with the IRS.

Endorsement A typed designation that is physically placed in the policy contract that clarifies the beneficiary designation, coverage, or ownership of the policy. Endowment A type of life insurance which pays the face amount of insurance if the insured should die during a specified term of years, or pays the same amount if the insured survives to the end of the specified term. Enhanced Value Annuity - Jordan (EVA) The Jordan class action suit members with terminated policies could elect to purchase this if they did not seek Claim Review Relief. Enhanced Value Policy - Jordan (EVP) The Jordan class action suit members with terminated policies could elect to purchase Whole Life or Estate Protector policies based on the age and the policy amount as long as they did not seek Claim Review Relief. Enterprise Complaint Tracking (ECT) An intranet application used to monitor and track all complaints received by State Farm. Entity Not a person. For example, a corporation, charity, fund, or church. Entry Field An area in a window where information is entered. Estate Assets and liabilities of a deceased person usually overseen by an executor or administrator. Estate Planning The process of analyzing an individual's estate before death and taking the necessary steps to assure that the assets and liabilities will be dispersed according to their wishes. Estate Tax A tax imposed upon the right of a person to transfer property at death. This tax may be imposed not only by the federal government but also by the state government.

Evidence of Insurability A fully completed life application along with any medical information requested by an underwriter (such as, exam or doctor's report). Required on any change where the coverage amount is being increased or on any change which could prove harmful to the Company (antiselection). Includes changes not provided for by policy provisions. Exception Listing Will list only accounts that have changed in some way from the previous billing. All changes will be identified in each account and a recap will show the net change in the total billing. Exception Tape Code A two character code which appears in the upper right corner of the notice.The first character is the destination code. The second character is the condition code and indicates the reason the notice went to the exception tape. Excess Contribution Refund (ECR) Excess refunds are payment reversals on U.S. IRA, ROTH-IRA, TSA, and Canadian Flexible Premium RRSP policies due to an excess contribution. Several requirements must be met for a refund to qualify as an "excess refund." Excess Interest Additional interest paid above the guaranteed interest amount stated in the policy. Excess Loan This situation occurs when the amount of loan value released to the policy owner , plus the loan interest due exceeds the cash value. Exclusion Provision that indicates a circumstance or event, such as an act of war, that would cause the benefit to be denied. Exclusion Ratio The percentage of each payment that is a return of cost basis and not taxed. Executed Request Letter Request letter that is used to make a beneficiary change.

Executor Person appointed to carry out the directions in a will. Expenses The costs of doing business in life insurance. These costs can include such items as agent commissions, employee salaries, and expenses for underwriting, issuing, and servicing policies. Expiry When a renewal premium is not paid to continue a policy for another term or if a term policy reaches the end of its period, the insurance policy is said to "expire." This term is also used when a policy on extended term insurance reaches the end of its coverage. Expiry Age The age term coverage runs out or expires. Explanation of Benefits (EOB) A statement from an insurer giving specific details to an insured group member about how and why benefit payments were or were not made. Exposed Count A count given when a policy is issued and the initial premium is paid. Extended Control Agreement An agreement to extend the purchaser's control of a policy until the insured's 21st birthday. Extended Interview Source of underwriting information that consists of a professional interviewer talking directly with an applicant to obtain medical history. The interview is transmitted to the underwriter as a Question and Answer Document. Extended Term Insurance During non-forfeiture activity, when there is not enough cash value to pay the full premium due, the remaining cash value is applied as a single premium to purchase level term insurance as far into the future as the single premium will carry it. This is the automatic non-forfeiture option on most policies.

External Check Creation (XCK) Transaction in the UNIX system that is used to create a check. External Replacement A State Farm policy being replaced by an outside company, or State Farm issuing a policy to replace another company's policy. External Transaction A transaction entered on your computer to request information or to update a master record. Transaction created by manual input. Example: withdrawal. Extra Life Protection Benefit A Policy provision available on the Extraordinary Life policy which guarantees level insurance protection. Extract Date The time each month when the automatic computer activity occurs to pay premiums on policies with a special monthly mode. This is done on a group basis with a common debit account and reference number. (Exception: SFPP payments are not related to an extract date, but are paid by tape when received.) Extraordinary Life Policy (EOL) Whole life with reduction in insurance after first year. Reduction made up with a combination of paid-up additions and one year term insurance.

Face amount of coverage In a life policy in which the benefit is not variable, the amount stated as payable at the death of the insured. Also called the face value. Fair Credit Reporting Act (FRCA) Requirements for notifying the insured when an inspection report is requested, and when an adverse underwriting decision is made which is influenced, in whole or in part, by an inspection or other consumer report. Fair Market Value (FMV)

This notice provides an IRA/Roth/SEP policy holder with a statement of cash value of the policy as of December 31st. Family Life Policy (State Farm Life policy offered between 10/57 to 12/77) A Whole Life on principle insured with term insurance on spouse and children. Amount of insurance on spouse depends on age difference with principal insured. Insurance on each child is 1/5 the amount on the principal insured. Coverage expires on anniversary nearest insureds 65th birthday (Adjustment Date) or childs 25th birthday if earlier. On death of the principal insured, spouses coverage continues to the Adjustment date and childrens coverage continues to their age 25. Family Plan Rider - Assurance (FPR) This coverage is automatically extended to new additions to the family when they attain the age of 15 days. Adopted children and stepchildren acquired after issue of this benefit are automatically included if they enter the family before reaching their 18th birthday. Fast Track (FT) Form used to obtain medical opinion of a test for a Proposed Insured. Fax Server Dedicated phone line used within the Life Operation Centers where faxes are received, coded, and sent to the appropriate destination for processing. Federal Deposit Insurance Corporation (FDIC) An independent deposit insurance agency, created by Congress as part of the Banking Act of 1933, to maintain stability and public confidence in the US banking system. FDIC insures deposits in banks and savings associations so that customers' funds, within certain limits, would be safe and available to them on demand in the event of a bank or savings association failure. The current insurance limit is $100,000 per owner. FDIC is also responsible for identifying, monitoring, and addressing risks to deposit insurance funds. Federal Employees' Group Life Insurance (FEGLI) The Federal Employees' Group Life Insurance Act of 1954 sets forth provisions for a Group Life insurance program for some 2,700,000 active and retired employees of the United States Federal Government. This Group Life program (FEGLI) is privately underwritten by the Metropolitan Life Insurance

Company as the primary insurer. The group policy (No. 17000G) is administered for the government by the Civil Service Commission; and, for several hundred participating life companies, by the Office of Federal Employees' Group Life Insurance. Fellow of Life Management Institute Program (FLMI) Established in 1932, the FLMI Program is the world's largest university-level educational program in insurance. The FLMI designation is the hallmark of professionalism for managers and technical/professional personnel in the life and health insurance and financial services industries. Fiduciary An individual, company, or association holding assets in trust for a beneficiary. The fiduciary has the responsibility of managing the money for the benefit of the beneficiary. Field An area where typed text (words), or a field of radio buttons can be selected. Fifth Dividend Option Uses the annual dividend to purchase one year term insurance equal to the cash value of the basic whole life plan. FileNet State Farm's imaging software vendor. A system for storage of images on laser disk. Filtering Allows displayed cases in the current In-tray view to be grouped by different criteria depending on the filter selected. Only those cases meeting the selected criteria display. The filter function remains when the screen is refreshed. Final Action (COP):The final computer activity on a policy change. For Change of Plan and Conversions, it changes the status of the new policy master record from "pending" to "issued," terminates the original contract, and automatically transfers the values from the original contract to the new policy. For Add Coverage, it changes the rider or benefit status from "pending" to "issued." Final Action also generates new policy pages.

(New Business): This action in Risk Advisor that records the underwriters application decision (issue standard, issue rated, decline, or incomplete) Final Action Errors Errors that occur when an attempt is made to issue or un-issue an application. Final Annuity Date The latest date that the annuitant may elect to begin receiving the income from the annuity contract. Final Beneficiary (FB) Person or persons named to receive the amount payable if no primary beneficiary or successor beneficiary is living at the death of the insured person, or if all primary and successor beneficiaries die before settlement is made. Financed Purchase The purchase of a new life insurance policy involving the actual or intended use of funds obtained by the withdrawal or surrender of, or by borrowing from, values of an existing life insurance policy to pay all or part of any premium due on a new life insurance policy. First Year Term Conversion Term coverage converted within the first policy year. Fixed Amount Payments of a specified amount are made for as long as the fund lasts. Each payment is made up partly of principal and partly of guaranteed interest. Any excess interest extends the payment period. Fixed Interest Provision Whole life and endowment policies issued prior to 1983 contained a fixed interest rate policy loan provision. This provision provided a guaranteed loan interest rate of 5%, 6% or 8%, dependent upon policy series. Fixed Period Payments are made for a specified period of time. Each payment is comprised partly of principal and partly of guaranteed and excess interest. Flat Extra

An even-dollar amount, per $1,000 of insurance, assessed for a temporary period to cover a temporary additional risk. It may also be assessed to cover a permanent additional risk that does not increase with age. Fleet Post Office (FPO) The Department of Defense and the USPS jointly operate a postal system to deliver mail to the military. Flexible Care Benefit Provides for an acceleration of a portion of the death benefit each month and waiver of monthly deductions while long term care need qualifications are met, subject to a 90-day elimination period. Flexible Payment Option (FPO)) Available for tax-qualified funds. Under the FPO the amount of payment may be specified, subject to IRS minimums. The minimum annual payment is recalculated each year and is equal to the remaining funds divided by the annuitant's remaining life expectancy. Interest is credited on the funds. Flexible Premium Premium that can be adjusted up or down according to the policyholder's wishes. Flexible Premium Annuity A type of annuity that allows varying amounts to be put into it, based on the insured's needs and current law, is a Flexible Premium Annuity. Follow-Up (FUP) The transaction that allows you to request automatic notification when action is needed on a policy. Follow-Up Cycle Days A specific date when a file needs to be reviewed to determine what action should be taken. Follow-Up Date A future date placed on a policy or contract causing a CON to print on that date indicating additional action is needed. This is also a function in Workload Management (WLM) where a date is set on a particular case causing it to be pended until a future date when it will become active again. Forecasting Utility

Diagnostic tool which aids users with profile administrative access in determining why assignments are sent to certain profiles. Forced Surrender The policy is automatically terminated and any funds are sent to the policy owner when less than $1000 of reduced paid-up insurance can be purchased, or the loan value is equal to or greater than the cash value. Fragile Document A document that may not scan well because it is damaged or frail. Free Look Period The policy provision that gives the policy owner the right to examine the policy upon receipt and return it to the company within a certain period of time with no obligation if they are not satisfied. Full coverage of the policy is in force during this period. Frequently Asked Questions (FAQ) Common features on the Internet, FAQs are files of answers to commonly asked questions. Front Load A life insurance product that collects all or most of the expenses up front or during the first policy year. Front Run Production Credit the agent receives for the amount of life insurance written and premium received. Weekly, monthly, and annual statistics are kept. Fructosamine Fructosamine is a form of protein used to indicate the average blood glucose for the preceding 3 weeks. Fully Paid-Up Coverage paid for in full; no further premium payments are due. Function Level in the Workload Management organization structure which broadly encompasses all Groups, Teams, and individuals for the following: Underwriting, Service, Claims, Securities Products, Corporate. Function Key

A key that when pressed, causes a specific action to occur. Funding Vehicle An Annuity, Life Insurance policy, or Mutual Fund that holds money contributed to a retirement plan. Future Excess Loan Policy loan plus interest will be equal to or in excess of the maximum loan at any point between the loan value effective date and the next premium anniversary.

Group Billing Master (GBM) GBM Sub master Status type information on policies on Government Allotment. The GBM sub master contains the service member's name, tax identification number, policy number(s), premium amount, allotment start date, and allotment amount. General Accounting Entries (GEN) Accounting entries made using the General Accounting Transaction on the GEN screen in UNIX. General Accounting Transaction (GEN) The General Accounting transaction is designed to process 14 major areas of accounting activity. Each individual transaction must contain a situation code to determine the type accounting activity that is to occur as a result of that input. The General Accounting transaction is not intended to provide a means of submitting entries to all accounts. Only non-master record accounts may be used, i.e. accounts that are not reflected in individual master records. General Relief - Jordan

Class action settlement contributions added to dividend accumulations for traditional policies and applied as premium for Universal Life policies. Generation Skipping Transfer Tax (GSTT) If proceeds from all State Farm life insurance and annuity policies total $250,000 or more and the beneficiary who receives the proceeds is a skip person, State Farm is responsible for paying a generation skipping tax (GSTT at a rate of 55%) upon the associates death. When death occurs, State Farm pays 45% of the proceeds immediately and holds the remaining 55% until assured by affidavit of the personal representative of the associates estate that there is no GSTT liability. (Note: The Beneficiary Designation or Beneficiary Change Form provides advisory notice of GSTT.) Good Neighbor Life (GNL) The Good Neighbor Life policy provides $50,000 of adjustable premium term insurance to age 40. Premium amounts are guaranteed for the first five policy years. Thereafter, premium amounts may be adjusted annually, but will never exceed the maximum shown in the policy contract. Government Allotment This term applies to the special monthly plan in effect to accept payments from the different branches of the Armed Services (such as, Marines, Navy, Air Force, Army). Grace Period The period following a premium due date that allows for payment of a premium not paid on its due date. The policy continues in full force during the Grace Period. The grace period for traditional policies is 31 days. The grace period for Universal Life policies is 61 days. Graham-Leach-Bliley Act (GLB) A federal law that was passed in 1999 which includes provisions to protect consumers personal information held by financial institutions (including insurers).It requires companies to provide annual privacy notices to eligible consumers. Grandfathered Any policy which is not subject to the provisions of TAMRA. These are policies which have an application date prior to June 21, 1988 and which have not been materially changed.

Grantor Person who establishes a trust. Greeley Operations Center (GOC) Gross Distribution (GD) For 1035 Exchanges, it is the Net Total Value. Gross Value (GV) The sum of any 402, 420, 422, and 424 debits that occur at the time of the distribution. (For 1035 Exchanges is the sum of all debit account entries (except loan interest capitalization (114DR/350CR), interest paid on policy funds (592), dividends left on deposit (431) and 900 accounts) at termination). Group Access Level Individuals with this permission access level are allowed to view reports for all Groups, Teams, and Individuals associated with the Function they are affiliated with. Group Bill/Pay Master Record A record, separate from Policyholder Master Records, set up under an Account Identifier. Group Billing A cost efficient way of billing a group of policyholders. Policyholders are billed as a group. Individual bills are not sent to each policyholder. Thus, a lower policy fee is charged to the policyholder. Group Box A single-line rectangular frame with a title to identify groups of related fields. Group Policy Insurance covering a group of people under one policy contract. Guaranteed Income Policy A type of Single Premium Immediate Annuity issued on or after July 1, 2003 . These policies can provide for life income payments, joint life income payments, or payments for a specified period.

Guaranteed Insurability Option (GIO) A benefit that provides the option to buy specified additional amounts of insurance at certain specified ages without evidence of insurability. Ordinarily, the applicant must demonstrate insurability when applying for additional insurance. If policy owner s want to guarantee that they will be able to buy additional insurance at certain ages, regardless of their health, they can purchase this benefit. Guaranteed Interest Rate The percentage of interest guaranteed for each series of annuity policies and Life policies by State Farm. Guaranteed Interest Rates Interest rate State Farm pays on a UL policy is guaranteed to be at least 4%.or the Minimum interest rate guaranteed in the original policy. Guaranteed Purchase Rates Used to determine the payment to a beneficiary from a supplementary contract. Guardian A person named to represent the interests of a minor child, or someone legally incapable of managing his or her own affairs. Usually named on a will or appointed by the court. Guide to Life Credits and Compensation A summary guide for agent's compensation and general information regarding agency credits. A brief description of the Agent's Life Statement is also shown. Guided Processing System (GPS) A front-end user interface that automates processes and guides users through the process using business rules and reflexive questions. GPS does not replace the existing Life, Workload Management, and imaging systems. Instead, GPS integrates with those systems. When a GPS activity is in progress, the Complete, Approval and New Activity functions in WLM are not available. Guideline Premium Test (GPT) The Guideline Premium Test limits the premiums that may be paid for a

contract and also limits the relationship between the contracts cash value and its death benefit. In order for a contract to satisfy the Guideline Premium Test, it must satisfy the guideline premium requirements and fall within the Cash Value Corridor. A contract satisfies the guideline premium requirements if the sum of the premiums paid under the contract does not at any time exceed the Guideline Premium Limitation as of such time.

Hardship Withdrawal When a participant withdraws plan funds prior to retirement, at the employers option. Eligibility for such distributions exists when financial hardship is present. These distributions are taxable as early distributions and are subject to a ten percent early withdrawal federal income tax penalty if the participant is under age 59. HDL Cholesterol HDL (high-density lipoprotein) cholesterol is a specific protein-cholesterol combination. Also known as "good cholesterol," elevation decreases the risk for atherosclerosis (fat accumulation in the walls of arteries). Help - WLM Provides access to the Life WLM Help Center. The Help Center is a central location for all screen Tips found throughout the Life WLM system and links are provided to a WLM glossary, the WLM training (Quick Tours), and WLM support information. Hemoglobin A1C Hemoglobin A1C (glycol-hemoglobin) is a form of hemoglobin used to indicate the average blood glucose for the preceding 6 to 12 weeks. Hit Dates The computer's automatic action at a specified time to prevent a policy from terminating or terminate it if there are no other alternatives. Hold Status

A record in which the scheduled payments are temporarily stopped. Home Buyers Plan (HBP) The plan allows Canadian taxpayers to use funds up to $20,000.00 from their Registered Retirement Savings Plan (RRSP) to purchase a home.

Icon Picture symbol which represents a function/application. Identification Slip It is a Slip which can be identified by the customer Identifying Factors Combined with Authority to Receive information, these descriptors help to verify the callers identity Illustration A tool used to help explain to the customer how a policy works. If an illustration is used in a state that has adopted the NAIC Model Illustration Regulation, it must be signed by the agent and applicant. Image The electronic representation of the scanned document. Imaged/Imaging The process of assigning meaningful codes to imaged documents so they can be retrieved later. Immediate Annuity A Contract paid for in one premium and providing for immediate income to the annuitant or joint annuitants. (Income begins at the end of the mode.) Impairment A condition which, for insurance purposes, may cause a policy to be charged an additional rate of premium. In Force General Relief - Jordan

General Relief for In Force policies was a settlement contribution equal to approximately 1% of the policy's reserves including dividend accumulations (traditional policies) or cash/account value (Universal Life policies) over a four year period beginning with policy anniversaries starting in March 2000. The first contribution percentage was .001; the second contribution percentage was 002; the third contribution percentage was .003; and the fourth contribution percentage was .004. For example, a policy with cash value of $1,000 received a contribution of approximately $1.00 ($1,000 x .001) on the first anniversary following March 1, 2000. In Force Status A record that is active. Income Endowment State Farm Policy offered from 1/48 to 12/81. A death benefit is payable if death occurs before age 65. An endowment benefit is payable if still living at that time. Unless otherwise elected, the proceeds are applied at age 65 to purchase a monthly life income with 10 years certain. Incomplete Date A follow-up date on a file when a decision should be made as to whether the case should continue in a pending status. Incontestability Life policies provide that, except for non-payment of premiums and certain other circumstances, the policy shall be incontestable after the policy has been in force for a specified period of time (usually 2 years). Incontestability Clause A life insurance contract provision which states that after the policy has been in force for a specified period of time (usually two years), the company cannot rescind or deny a claim based on a material misrepresentation in the application. Index Date The date an image is committed to optical disk after being scanned and indexed. Index Value Data assigned to a document that will identify if for later retrieval. Examples

include policy number and service date. Indirect Rollover Individual who receives an eligible rollover distribution and who chooses not to do a direct rollover may roll over 100% of the eligible distribution including the amount equal to the 20% that was withheld. If rolling over 100%, he or she must use personal funds to replace the 20% that was withheld. If the amount withheld is not rolled over, it will be taxed as a distribution. Individual Access Level Individuals with this permission access level within WLM are allowed to view reports on themselves only. Individual Consideration (IC) Impairment or non-medical risk criteria that needs to be assessed and/or evaluated independently by the underwriter. Individual Fields Used on the SMR transaction within UNIX to request specific coverage information. Individual Retirement Account (IRA) A personal, tax-sheltered retirement account available to wage earners not covered by a company retirement plan or, if covered, meets certain income limitations. Individual Retirement Arrangement (IRA) A personal, tax-sheltered retirement account available to wage earners not covered by a company retirement plan or, if covered, meets certain income limitations. (A tax qualified account for individuals that can be funded by an annuity.) Individual Taxpayer Identification Number (ITIN) A tax processing number issued by the Internal Revenue Service. It is a ninedigit number that always begins with the number 9 and has a 7 or 8 in the fourth digit, example 9XX-7X-XXXX. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration (SSA). ITINs are issued regardless of immigration

status because both resident and nonresident aliens may have U.S. tax return and payment responsibilities under the Internal Revenue Code. Informal Trust This type of trust provides for the support of minor children without court appointment of a guardian of the minor's estate or establishment of a formal trust agreement. Information Prompt A note or instruction added by the individual creating a document. Can only be used with a merge document type. Inherited IRA When a primary beneficiary is the spouse of a deceased annuitant and they step into the shoes of the deceased parties annuity. Internal Revenue Service (IRS) The federal agency responsible for administering and enforcing the Treasury Department's revenue laws, through the assessment and collection of taxes, determination of pension plan qualification, and related activities. Internal Transaction Transaction automatically processed (Annuity/Supplementary Contract) Initial Action The first computer activity on a policy change. For Change of Plan and Conversions, it establishes a new master record with a new policy number. For Add Coverage, it sets up a pending rider or benefit in the master record. On Change of Plan or Conversions, Initial Action freezes the master record on the existing policy, preventing any activity from occurring which would hamper processing the requested change. Initial Action Errors Errors that occur when an application is inputted into the system or submitted over NECHO. Initial Input CON Computer Output Notice (CON) automatically printed after App Input has been entered. Initial Underwriting by the ASC system.

A series of edits in the Risk Advisor system that determine areas of concern on an application. Problems and Requirements are generated from Initial Underwriting. If an application passes all of the edits in Initial Underwriting, the system can process the application, and an underwriter will not have to review it. In Queue The caller is in queue waiting to talk to an operation center specialist if all lines are busy. (This is not the same as "on hold") Insert Master Record (IMR) The Insert Master Record (IMR) screen is a miscellaneous function screen used by many areas in Life Company to perform specific functions.. Inspection Report Information obtained by a Third Party organization that is utilized in Underwriting to verify or clarify the proposed insured's health, finances, habits, avocations, driving record, business and personal information. Insurability Those qualifications of age, health, occupation, etc., which enable the applicant to meet the requirements of an insurance company for the issuance of insurance. Insurable Interest The fact that the person effecting the insurance must suffer a financial loss at the death of the proposed insured. For the policy to be issued, both the owner and beneficiary must have an insurable interest. Insurance Information and Privacy Protection Act Legislation requiring special handling in regard to use and disclosure of certain personal customer information. Insurance Credit Agency credit allowed when the initial premium is paid. The agent receives credit for the face amount of the new policy. Used to measure an agent's annual production for agency contests. Insurance Records The unit in Administrative Services responsible for imaging policy and claim records.

Insurance Support Center (ISC) Insurance Support Centers, located in Atlanta, Dallas and Phoenix, handle the payments, data processing and printing and mailing for State Farm's operating centers except Canada. Insured The person whose life is covered by the insurance contract. Intelligent Information Router (IIR) This will look up the policyholder information for the policy number and PIN entered. Interactive Voice Response (IVR Conversant) The Conversant Interactive Voice Response system gathers customer entered information and speaks a response to the caller based on their selections. The conversant greets the caller and asks the caller to indicate if they wish to receive unit prices or account balances. Interest State Farm Life holds the policy proceeds until the payee withdraws them. We pay interest on the proceeds monthly, quarterly, semi-annually, or annually. Or, interest can be accumulated. Interest Rate Guarantee Period The interest rate will be guaranteed for the number of years indicated in the interest rate guarantee period. Guarantee period durations may range from 1 through 10 years depending on availability at the time of issue and at the time of renewal. At least one guarantee period will be available. Interest Rate Lock In A 60 day period to accumulate a single premium. In these cases, the policy date will be the date the last payment is received in the Life Operation within the 60 day period as long as the required minimum premium has been met. Beginning May 1, 2009 the 60 day lock in provision is no longer available. Interim Authorization Authorization required when Do Not Share has been elected, but a Life/Health underwriting coordination is taking place, allowing the two companies to share information. Intermediate Interest Rate

Interest rate State Farm pays on the UL account value that's equal to the amount of any policy loan. Internal Replacement A State Farm agent replaces an existing State Farm policy with a new State Farm policy. Internal Revenue Service (IRS) Guideline Premium - U.S. Only Premium defined by IRS regulations. It limits the maximum amount that can be paid into a UL policy. Internal Transaction A transaction that is processed by the computer system automatically. For example, dividends are paid internally on a policyholder's anniversary date. Interstate Insurance Product Regulation Compact (Interstate Compact) An agreement among signatory states to provide for centralized regulatory review of certain types of life insurance product form filings and advertisements. The Compact is intended to serve as a central pint of product filings, enforcing national product standards and providing for timely filing approvals. Interview Source of underwriting information that consists of a professional interviewer talking directly with an applicant to obtain medical history. The interview is transmitted to an underwriter as a Q&A document. Inter-Vivos Trust A trust created and operable during the grantor's lifetime. Also called a living trust. Interstate Dying without a valid will. Initial Premium First premium payable on an annual, semi-annual, quarterly, monthly or prorata basis. When this first premium is paid, and not until, the agent will receive his commission and credits. In-Tray The first screen of the Life/Health Underwriting System. The In-Tray contains

all of the cases assigned to an underwriter and some basic information about each case. Each underwriter has an In-Tray. In-Tray Sorting The process of organizing cases by clicking on one of the column headings. The sort remains in effect when the page is refreshed. Investment in Contract The net amount a policyholder has put into the contract. This reflects premiums (including any life riders) paid. The premium paid for benefits (i.e., Waiver of Premium Disability , AD, GIO) are not included. Individual Retirement Account (IRA) A personal, tax-sheltered retirement account available to wage earners not covered by a company retirement plan or, if covered, meets certain income limitations. Irrevocable Beneficiary A beneficiary whose interest in the policy cannot be canceled without his or her consent. The policy owner cannot make any changes to the policy without an irrevocable beneficiary's signature. Irrevocable Trust A trust that cannot be revoked or terminated by the grantor at will. To qualify as irrevocable for federal tax laws, the grantor cannot retain any right to alter, amend, revoke, or terminate. IRS Life Insurance Test A test to ensure that the policy qualifies as life insurance under Internal Revenue Code Section 7702 and receives advantages such as tax-deferred cash value growth and tax-free death benefit. iSEIT A State Farm-written system for the creation (i.e., scanning), indexing, and company-wide retrieval of images and documents stored on FileNET repositories. Issue Age Insured's age as of the policy date. Issue Date

When entry was completed. Date the policy was physically issued. This date may be different than the application date and policy date. J

Jacket Numbering Sheet The worksheet that is completed and inserted into the pocket of the reusable jacket. It provides identifying information for each file and the necessary coding for the file to be imaged. Joint and Last Survivor Annuity An annuity whose income benefits are paid to two or more individuals until both or all of the individuals die. Joint and Last Survivor Annuity with Certain Period Income is guaranteed for the greatest of the annuitants lifetime, the joint annuitants lifetime, or the certain period. Certain periods of 10, 15, 20, 25,or 30 years are available. Joint Life Income Payments are made for as long as either of two payees live. A certain period can be selected to guarantee that payments will continue to the beneficiary for the specified period, even if both payees die within that time. Joint Payees The second payee on Contracts where payments will be made as long as either of the two payees lives. Joint Universal Life (JUL) This is a flexible-premium type of life insurance coverage with an adjustable death benefit that is payable only on the first death of the Insureds. The policy owner may increase or decrease scheduled premiums, skip premiums, or make additional unscheduled premium payments. Insurance coverage may be increased or decreased subject to policy requirements and limitations. These unique features enable the policy owner to adjust the policy to meet changing insurance needs. This coverage is also known as First to Die.

Jordan Class Action Settlement On January 30, 1997, a class action complaint was filed against State Farm Life and State Farm Life and Accident Assurance. Allegations against State Farm focused on sales misconduct with primary emphasis on the premium offset marketing concept. State Farm, although not admitting to any wrongdoing, agreed to settle. Jukebox Another name for optical disk library. This is where the optical disks reside. K

Keep Together File (KT) Two or more applications that are sent through the workflow process together. Keeping the 2 or more policies or documents together can be beneficial processing the applications for policy issuance. Keogh Plan A tax-deferred retirement account for self-employed individuals or employees of unincorporated businesses. Keogh plans can be funded with mutual fund shares. (Also known as H.R. 10 Plans.) Key Person Insurance Insurance placed on an important person in a business to indemnify the business for loss of profits, goodwill and the increased expenses of having to replace the individual in the event of death or disability. Key Word List A list that contains words and phrases that are an important part of the Underwriting Screening process and that should be evaluated by the Underwriter. Kind Code A kind code is a code designating what series (time period) policy was issued. The kind code also tells you what type of policy was issued. L

Lapse The termination of an insurance policy because of the policy owner 's failure to pay the premium due within the grace period. Lapse/Surrender Count Count generated when a policy lapses or is surrendered within the first two policy years. The lapse count will be charged to the year in which the exposed count is received. Lapse/surrender counts are tracked for two calendar years. Last Tax Year Payments This Interest Rate Lock-In is not available if the money received comes through the hands of the policyholder or the last payment is received after 60 days from the application date. Last Transaction Date and Office The date and office in which the last activity on the policy occurred. Late Payment Offer (LPO) Usually made at the time a policy is getting ready to lapse for non-payment of premiums due. The offer allows an additional 21 days to reinstate the policy without evidence of insurability (reinstatement application completed) under special conditions. Not always the case as Universal Life rules is different. LDL Cholesterol LDL (low-density lipoprotein) cholesterol is a specific protein-cholesterol combination. Also known as "bad cholesterol," elevations increase the risk for arteriosclerosis (fat accumulation in the walls of arteries). Left Message (LM) An acronym that is used in Workload Management (WLM) or TRIO Notes to indicate that a message was left for someone. Legacy System The foundation that the Life system was built upon. Letter (LTR)

An acronym that is used in Workload Management (WLM) or TRIO Notes to indicate that letter is needed or was received. Letters of Guardianship Letters of guardianship duly issued by a court to the guardian. Level Providing the same amount of insurance and/or premium for the duration of the contract. Life Annuity An Annuity where income is guaranteed for the annuitants lifetime. Life Annuity with Cash Refund An Annuity where income is guaranteed for the annuitants lifetime. If upon death of the annuitant, the total income received is less than the initial purchase payment, any difference is paid in one sum to the beneficiary. Life Annuity with Period Certain An annuity that guarantees that payments will be made throughout the annuitants lifetime and that payments will continue for at least a specified period even if the annuitant dies before the end of that period. Life App An application for a Life Insurance policy. Its printing must conform to standards established by the Insurance Department of the state in which it is written. Life Application Supplement (LAS) The Life Application Supplement (LAS) is a state-approved form that shows basic tele-underwriting interview questions and a summary of answers obtained during the Extended or Senior interview. Life Customer Identification Guidelines Used to identify people who contact the Life Response Center or Life Operation Center by telephone and determine whether or not they are authorized to obtain requested information associated with a policy. Life ECHO Application Life applications entered on the Agents ECHO, and batched for overnight processing in the Life system at corporate.

Life Electronic Application (E-App) A Life application designed to be completed, signed and transmitted electronically. Life Estate (Life Interest) An interest that a person has in property, which endures only during life-time, with no possession of ownership rights that may be transferred during life or death. The title of the interest owned by a life tenant (income BENEFICIARY). Life Expectancy The average number of years of life remaining to a number of people of a given age according to a given mortality table. The number of years a person is expected to live based on age and gender in accordance with mortality tables. (This is the point when the table says 1/2 of a certain age group has died and 1/2 is still living. It does not predict when a person will die.) Life/Health General Underwriting (LHGU/LGU) Corporate unit dealing with complex underwriting issues. Life/Health Insurance Product Any of the set of insurance contracts written to insure life values &/or expenses related to the maintenance of physical health resulting from perils outlined within the contract. Life/Health Underwriting System (LHUS) The Risk Advisor icon labeled LHUS. Life Income A settlement option where payments are made for as long as the payee lives. Life Income option with Period Certain A life insurance settlement option in which the insurer guarantees to pay the beneficiary a series of equal payments for a designated period, such as 10 years; thereafter, the payments will continue only as long as the original beneficiary lives. If the original beneficiary dies during the guaranteed period, payments will be made to a recipient designated by the original beneficiary until the end of the guaranteed period, at which time all payments will stop. Life Income Option with Refund

A type of settlement option in which the insurer guarantees that if the beneficiary dies before the total amount paid equals the proceeds of the policy, then the insurer will pay the difference to a contingent payee. Life Insurance A product which provides indemnification for the economic loss caused by a person's death. The indemnification is made possible by spreading the cost of the financial loss over a large group of people who are exposed to the same risk. Life Insurance Marketing Research Association (LIMRA) A research organization, based in Hartford, CT, that conducts research on behalf of its life and health insurance member companies. Lifelong Learning Path (LLP) A plan in Canada that allows the annuitant to withdraw funds to finance full time training and education for the annuitant and the annuitants spouse only. Life Office Management Association (LOMA) An independent association that provides college-level education in insurance and insurance management subjects for students from life insurance companies around the world. The Life Office Management Association offers the FLMI diploma. Life Operations Center (LOC) Life Policy View (LPV) LPV is a web-based application, with a similar "look and feel" of the Account History Request and the Life Guided Processing System (GPS). LPV displays Life policy data from the Policy Service Record (PSR) plus some additional data from the Policy Master Record (PMR), in a common view for both the Operations Center staff and agents. While the two groups may not have access to all of the same data, the information viewed by both will be data from the same source. Life Response Center (LRC) Unit within Life Company that answer incoming toll-free calls, from agents and staff, using the interactive Life Knowledge System. Some LRC

representatives will process some phone requests. Life Rider Additional term insurance added to the base policy to cover the principal insured or an additional insured. Examples include Children's Term Rider and Additional Insured's 5 Year Term rider. Life Sales Specialist A Life Sales Specialist is a State Farm employee who is partnered with multiple Agents to market and sell life insurance within each Agent's book of business. The LSS receives a base salary and can earn a bonus. The LSS is required to meet minimum production standards. Life Self-Processing Review To provide a tool for the zone to analyze their procedures for providing quality service to agents and policyholders according to established guidelines. Life Settlement Agreements Jordan class action settlement agreements that pertain to all non-tax qualified traditional whole life and Universal Life Insurance policies issued by State Farm from January 1, 1982 through December 31,1997. Life Systems Life Systems is an inclusive term for all systems used to maintain Life products and compensate Agents for them. Life Underwriting Correspondence (LUC) Electronic correspondence sent to agents on pending applications. Informs agents of the status. Life Underwriting Status View (LUSV) An intranet based application designed to provide agents, Agency Field Offices (AFOs), Agency Resources Departments, the Life Operations, and some Corporate Departments with online access to Pending Applications and Agents Life Statement information. Limited Payment Statement A limited payment statement is a statement made either on the application or on a separate document indicating that the applicant intends to make a limited number of payments on a Universal Life or a Second to Die policy.

The intention is that the interest earned on the account value will eventually be sufficient to cover the cost of insurance. List Box A box that contains a list of objects or setting choices that can be selected. Listing A paper or electronic report in detail or exception format that shows accounting activity. Listings summarize the activity for the account that needs attention. Examples of listings are: 1. Daily listing produced for PAC showing premiums not paid. 2. A monthly listing produced for Agent's Payroll Deduction, Employee's Payroll Deduction, and Government Allotment. 3. 136 or 139 account listing prepared on TRMS (RLWAC000) on the 1st and 16th of each month. Living Trust A trust created and operable during the grantor's lifetime. Also called an "intervivos" trust. Loan The amount of money a policyholder may borrow against their policy's cash value. The loan is charged interest. It can be repaid, but doesn't have to be. If it is not repaid, the final death benefit is reduced by the amount of loan plus interest due. Loan Balance The cumulative amount of cash value released to the policyholder as a loan. Loan Effective Date This is generally the date the loan is processed. However, if a loan is processed within 21 days of the anniversary, the effective date will be the policy anniversary date. Loan Initiation Code The loan initiation code is used to identify where the loan originated. It appears in SMR Field 21. Loan Interest Capitalization The process in which loan interest is capitalized or added to the outstanding

loan balance at anniversary handling. Loan Interest Discount Factor - New Method Effective with the 8200 series, the discount factor is the number of days from the loan effective date to the next premium anniversary date times the loan interest rate. Loan Interest Discount Factor - Old Method The discount factor on pre-8200 series policies is the number of days from the loan effective date to the paid-to-date after any premium is paid, times the loan interest rate. Loan Interest Due This is the charge levied on the outstanding loan balance as the cost of borrowing the policy's cash value. This charge is a percentage of the loan balance. Loan Interest Paid to Date This is the date to which any prior loan interest due has already been paid. When a loan increase is processed, interest will be due from the loan interest paid-to-date up to the loan effective date. Loan Interest Rates All (LIA) This function of the Policy Loan Transaction (T90114), provides a viewable CON which shows VLI interest rates from the VLI rate currently in effect through the 23rd previous quarter and VLI exception codes. Loan Interest Rates Request (LIR) This function of the Policy Loan Transaction (T90114), provides a viewable CON which shows the interest rates in effect on the PMR. For VLI policies, the system shows the current through 5th previous quarter's interest rates and VLI exception codes. Policies with fixed loan interest rates show the guaranteed rate for the policy Loan Liability Amount Amount the policyholder owes State Farm, because he or she borrowed against the policy cash values (or account value for UL). The amount consists of loan principal and loan interest. Loan Quote Used to obtain the maximum amount available to borrow. Loan quote is also

used with Universal Life policies to determine maximum amount available for withdrawal. Loan Repayment Calculator A job aid calculator that will figure a repayment schedule based on a given repayment amount or duration to help respond to any questions. Loan Value The amount of cash value the policyholder can borrow at interest. Loans to the Terminally Ill (LTI) The Life Company has developed a program which provides funds prior to the death of a terminally ill insured. State Farm Bank will make a loan for up to 60 percent of the face amount of the policy. The interest rate on the loan is the current State Farm Life Variable Loan Interest Rate. The policy will be collaterally assigned to State Farm Bank. There are no restrictions on how the policy owner uses the loan proceeds. Consideration for a loan under this program is given to all new and existing life policyholders. Local Record All but the most recent code records for each active agent in the Agency Master File (AMF) containing the agents earnings, production, persistency and status. Local Alpha Search (LAS) A UNIX search of State Farm's policy owners in the specific Life Operation initiating the request to determine if policies exist on a particular insured. Local and Total This is the current active code for the agent. Long Term Income Disability (LTID) This coverage provides a monthly income to the insured while he or she is totally and permanently disabled as defined in the rider. (Discontinued in 1978). Loose Documents A document that will be scanned alone rather than being scanned as part of an application or claim file. Lost Policyholder (LPH)

The lost policyholder (LPH) exception code is entered using the IMR screen (type AF) after reasonable attempts to locate a policyholder. After the lost policyholder exception code is entered, "lost policyholder" will appear in the "Policy Information and Exceptions" area of the PMR status (SMR) When the lost policyholder exception code is present, most transactions will not process and no policyholder notices or tax forms will be generated. Lotus Notes A system used to access Notice Letter Printing (NLP) which is utilized to produce pre-formatted documents and pattern letters. M

MA Screen A screen referred to as Miscible Accounting on the UNIX Life system where numerous accounting transactions can be performed. Please refer to definitions under Miscible Accounting also. Mandatory Distribution (RMD) Distributions that must be taken and begin no later than April 1st the following year the annuitant turns 70 1/2 and must be taken before December 1st of each year. Mandatory Withholding IRS required withholding on Corp, Keogh, and TSA tax qualified plans. May also apply to non-resident aliens on all contracts. Manual Indexing An enterprise imaging application for users to complete indexing and scanning services. Marketplace Compliance Marketplace Compliances is a group of people who perform corporate regulation activities. Marketplace Compliances was formerly called the Corporate Regulatory Unit. Market Value Adjusted Annuity (MVA)

An annuity that offers multiple guarantee periods and multiple fixed ratesmarket value adjusted annuities that meet certain regulatory guidelines can be issued as fixed annuities. Master Record Corrector (MRC) Information that is submitted via a Master Record Correction form, to correct Policy Master Record items such as age. Master Record Status (SMR) This screen contains Information regarding the insured on a specific policy. Material Change Any change which increases an in-force policy's benefits. A material change can also be done when the nature of the insurance is changed (i.e. when preliminary term ends, certain reinstatement situations, change of plan, and addition of a benefit or rider). The effective date of the material change is also the beginning date for the 7 year test period used to recalculate and compare the cumulative premiums paid on the contract to the cumulative MEC reference premium level. A material change will (in most cases) cause a policy to lose its grandfathered status - thus becoming "subject to" the provisions of TAMRA. Material Misrepresentation The making of any untrue or misleading statement that would have influenced the insurers decision to accept the risk. Maturity A life policy that eventually reaches the end of its premium paying term whether it be at a certain age or after a certain number of years. At the time of maturity the insured receives the face value amount of the policy. Maturity Date The date which the policy endows for its total face amount. Maximum Loan Value Largest amount that a policyholder can currently borrow from a policy. Maximum Loan Calculation - New Method The maximum loan value for 8200 and subsequent series policies is: base plan cash value plus cash value of paid up additions plus any Premium Deposit Reserve on the cash value effective date. The system discounts back

the sum of the above three values from the next premium anniversary to the loan effective date. The rate of discount is the same as the loan interest rate. Maximum Loan Calculation - Old Method The maximum loan value for pre-800 series policies is: base plan cash value plus cash value of paid up additions plus any Premium Deposit Reserve on the cash value effective date. The system discounts back the sum of the above three values from the cash value effective date to the loan effective date. Maximum Withdrawal Amount Largest amount that a policyholder can currently take out of a UL policy, without borrowing, and keep the policy in force. MEC Annual Level Reference Premium This is the seven year level net premium based on the TAMRA regulations. Value could be zero due to the size of the Carryover Cash Value adjustment but never negative. MEC Carryover Cash Value The amount of cash value rolled into this policy on a 1035 or non-1035 exchange on a VUL/UL or Single Premium Life or the account value carried into the current compliance period. (i.e. Account Value after processing the material change). If the policy is a UL/VUL this field can be updated via the IMR function AW, but a traditional policy is not currently handled by the system, contact the Tax department for manual handling. MEC Date This is the date the policy failed the MEC test (i.e., premiums paid exceeded the allowable reference premium level). The date will be zeroes if the status is not pending MEC or MEC. This is the effective date of the transaction causing the failure. MEC Distribution If a policy is a MEC, a release of certain "values" (see the section on distributions later in this material for actual types) from the policy will be treated as current income to the extent of the taxable gain in the contract. Federal (and in some cases, state) withholding will apply to the taxable portion of the distribution. If the distribution occurs prior to the owner's attained age 59 1/2, a 10% penalty tax will be imposed by the IRS. Note:

there are exceptions to this "self-imposed" penalty tax. MEC Effective Date This is either the policy date or the effective date of the last material change which made the policy subject to the MEC rules. This is the beginning of the 7 year test period. MEC Non-Taxable Distributions For UL/VUL, this is the non-taxable distributions since the effective date. Non-taxable distributions come from withdrawals. For traditional, this field is not used. MEC Premiums Paid For UL/VUL, this is the total premiums paid on the policy since the effective date excluding initial carryover from exchange MEC Reference Premium That level of annual premiums dictated by the law which - when exceeded by the cumulative premiums paid on the policy at any time during a 7 year test period - results in the policy becoming a MEC. (Calculation of the MEC Reference Premium is TAMRA (MEC) COMP- PMR Field 108). MEC Reference Premium Adjustment A positive or negative adjustment amount which must be added to any calculated reference premium. MEC Two Year Look Back Gain This is the policy's taxable gain. For UL/VUL this is calculated on the date the policy fails the MEC test. For traditional, this will be manually calculated and updated by the Tax Department. Medical Examination A medical history and exam completed by a doctor that an insurance company may require of the applicant during the underwriting process. Medical Examiner (ME) The certified personnel that records medical history and exam requirements which an insurance company may require during the underwriting process. Medical Information Bureau (MIB) A service utilized by all life insurance companies who are members of the

MIB. Member companies are required to provide brief, coded reports of significant underwriting information to the MIB on a confidential basis. These reports do not include indication as to whether or not an application is issued, rated, or declined. The information is used to protect against the omission of significant underwriting information by forgetful or dishonest applicants. Only member companies have access to this information. Mentally Incompetent The inability of a person to make or carry out important decisions regarding his or her affairs. Such mental incompetence may be due to illness, mental retardation or other disabilities affecting his judgment abilities. Menu A list of options which can be selected from available options. Menu Bar The menu bar appears just under the title bar of a screen, and often includes a File menu. These pull-down menus provide access to additional features that do not appear on a screen, as well as allowing keyboard control for certain options on a screen. Menu Bar Choice A graphic or text item on a menu bar that provides access to pull-down menus which contain choices that can be applied to an object. Merge Document (Merge Doc) Additional documents stored within the Lotus Notes Notice Letter Printing (NLP) database that can be merged into other Notice Letter Printing (NLP) documents or letters. Merge with Prompts Additional information is required to be input by the processor within a Notice Letter Printing (NLP) document in order to complete the merge. Merge without Prompts No additional information is required to be input by the processor within a Notice Letter Printing (NLP) document in order to complete the merge. Message (MSG) Information which is sent from a source to a receiver. Method of Settlement

The way policy proceeds are to be paid to the beneficiary. MIB Hit Status of MIB response received after the MIB search is submitted that alerts the company to potential further investigation. MIB Impairment Codes Codes that reflect a form of medical and personal information which is maintained in the central data bank by the Medical Information Bureau (MIB). MIB Pre-Notice This notice is sent to the policy owner three days prior to submitting the Medical Information Bureau (MIB) search. MIB Responses MIB is a voluntary membership association of life insurance companies in the US and Canada. In an effort to detect and defer fraudulent activity, MIB coordinates an exchange of information significant to heath or longevity. MIB Search A search conducted by the Medical Information Bureau at State Farm's request to gather information on the proposed insured for life insurance coverage, changes, and additional risk. Million Dollar Round Table (MDRT) Millionaire Annuities An annuity with an initial value of $2,500 issued as an award to State Farm agents who met certain life product sales goals during the years 1991 1995. Minimum Initial Premium The minimum amount of premium necessary to keep the policy in force through the end of the second policy year based on the selected mode. For the annual mode, the Minimum Initial Premium is 12 times the Special Monthly Minimum Initial Premium. Note: This is only for Universal Life policies). Miscible Accounting Refers to the mixing of various accounting transactions and accounts.

Miscible Accounting Entries Accounting entries made on the SCM Screen. Miscible Accounting - Long (MA) A function within the UNIX system that refers to the mixing of various accounts and transactions. The prompts and entries differ in the MA and the MS screens. Miscible Accounting - Short (MS) A function within the UNIX system that refers to the mixing of various accounts and transactions. The prompts and entries differ in the MA and the MS screens. Misrepresentation A false or misleading statement by the insurance applicant that may provide a basis for the insurer to avoid issuance of the policy. Mixed Load A life insurance product that spreads expenses over the life of the policy. Mnemonic Mnemonics are abbreviations used to "call" the screen you need. For example "MA" represents Miscible Accounting. Mode The mode refers to the method or frequency of premium payment the policy owner has chosen. The choices are annual, semi-annual, quarterly, monthly, and special monthly. Mode Factors The percentages that are multiplied with the annual premium to determine the other mode premiums. For example, the semi-annual mode factor is .515. A semi-annual premium pays for six months, but it is more than half of the annual premium. For modes other than annual, the premiums reflect higher administrative costs. Modified Endowment Contract (MEC) A policy which is both subject to the provisions of TAMRA and one on which the cumulative premiums paid exceed the limit prescribed by the law (reference premium). A policy tagged as a MEC is permanently subject to taxation under TAMRA (once a MEC, always a MEC). A policy heavily funded

in the first 7 years that loses some of the tax advantages typically enjoyed by life insurance. Modified Term Conversion A Term Conversion where additional coverage must be underwritten. For example, a request to convert a $25,000 5 Year Term policy to a $35,000 Universal Life Increase is a Modified Term Conversion. The additional $10,000 must be underwritten. Modifying (MOD) a Check Transaction used to modify the name, address or stub message on a check that is created. (Replaces Mod (Modifying) a Check). Money Laundering Engaging in financial transactions that involve income derived from criminal activities. Monthiversary The date on which monthly handling occurs, which coincides with the policy date for Universal Life (UL) policies. Monthiversary Handling Another term for monthly handling. Monthly Deductions Deductions made from the Universal Life (UL) account value each month that may include charges for the basic plan, charges for any riders or benefits, and the monthly fee. Monthly Fee A monthly deduction from the account value of a Universal Life (UL) policy (86000 and 94000 series) that pays for the cost of servicing the policy. Monthly Handling System processing occurring on the monthiversary date of a Universal Life policy to add interest to and deduct costs from the account value. Moral Hazard Refers to weaknesses in human character that lead some people to exaggerate losses or intentionally cause them to occur as a means of collecting insurance proceeds.

Morbidity Refers to the potential loss of health for a specific population. Mortality Expenses Portion of premium charge based on the probability that the insured may die during the contract term. Mortality Table A table or chart listing the probabilities of death occurring at various ages. Mortgage Rider A decreasing term rider that provides temporary life insurance protection in an amount sufficient to cover the unpaid mortgage balance of the usual residence of the insured. Motor Vehicle Report A report the agent can order via the Agency Underwriting Information (AUI) system that provides a listing of the applicant's auto violations. Motor Vehicle Record (MVR) A record with the Department of Motor Vehicles of each state or province. It shows information pertaining to one driver, such as date licensed, date of birth, violations, convictions, and administrative information. Some states and provinces also show accident information. MS Screen Refers to the "MS" or "Miscible Short" screen on the Life system. The prompts and entries differ from those of the MA screen transaction. For more details, refer to the Miscible Accounting Training guide under, "MS Screen". Multi-Line Allocation This occurs once check is received from an external company and the total assets are split between two or more State Farm entities. Multi-line Discount (MLD) A discount for an insured that carries more than one line of State Farm business. (life, auto, homeowners etc.) Multi-Line Entry Field A field for data entry which has multiple lines. Press Enter if there are

multiple lines of entry or Press Tab to advance to next field. Multi-Regional Services Facility (MRSF) The Multi-Regional Services Facilities (MRSFs) exist to support the changing needs of the organization. The MRSFs offer printing, mailing, storage, and supply distribution capabilities to the entire State Farm organization. Multi-State Agent A multi-state agent is an agent who is licensed in more than one state within the same operation center. Mutual Insurance Companies Insurance companies without capital stock, owned by the policyholders. N Name Maintenance (NM) A function performed in UNIX that is utilized to add, delete, change or update the name for insured's, additional insured's, purchasers and owners on a policy. National Association of Insurance Commissioner (NAIC) The organization of insurance regulators from the fifty states, the District of Columbia and the four U.S. territories. The NAIC provides a forum for the development of uniform policy when uniformity is appropriate. A state regulator's primary responsibility is to protect the interests of insurance consumers, and the NAIC helps regulators fulfill that obligation. That assistance is related to the regulators' shared objectives of financial and market conduct regulation. National Association of Securities Dealers (NASD) An association of broker/dealers that supervises and regulates the trading and conduct of its member organizations and the licensed brokers who work for those member organizations. The NASD was created under the Securities and Exchange Act of 1934 and works closely with state and federal securities regulators. Natural Language Like Processing (NLLP) Tool used by Risk Advisor to look at a word or short phrase and match it with

an impairment the system recognizes. Necessary Premium The premium required under the contract guaranteed to fund the lowest future benefit during the initial seven contract years (or for seven years following a material change). Necessary Premium Test (NPT) Under the Necessary Premium Test, an increase in the future benefits will not result in a Material Change if the increase is attributable to the payment of premiums necessary to fund the lowest level of benefits payable in the first seven contract years, or to earnings thereon. Negative Status Any reversal of premiums to a paid-to-date on which the 60-day hit should have already occurred places the policy in a "negative" status and no internal system processing will occur. The Life Operation is then responsible for taking action on such policies, such as terminating the record or getting premiums paid. Negative Next Transaction Date (NTD) When the unpaid premium handling process is stopped/missed due to a paid to date that is more than 60 days past due. NET Remaining after deductions. Add any positive amounts and subtract any negative amounts to get the net figure. Net Amount at Risk The difference between a policy's face amount and its cash value. The amount that the Company must pay in addition to the cash value in the event of a death claim. For example: On a $50,000 policy that has $20,000 cash value, the amount at risk is $30,000. Net Income Attributable A concept in the Internal Revenue Code for calculating the net gain or loss generated by an excess IRA contribution, or the net gain or loss of a Roth IRA conversion or re-characterization. Net Single Premium (NSP) This item is currently in the glossary but needs to be updated to this: For any

life insurance contract, the NSP is the amount needed at any time, under a given set of actuarial assumptions, to provide for the future scheduled benefits under the contract. Net Premium The net premium is the gross premium minus a premium expense charge that is added to the account value of a Universal Life policy. Net Premiums Paid Gross premiums, less expense loading, paid after the last monthiversary to the date of death. Net Premium Pro-Rata Interest Interest on each of the net premiums from its effective date, plus one day, through the date of death. Net Total Value This is the gross value which is the sum of all debit account entries less any loan repaid at termination. . Networked ECHO (NECHO) NECHO is a system that agents utilize to submit applications, make payments, or to make changes. Neutral - Jordan The Neutral was a third party selected by the plaintiffs and State Farm to review and score claims submitted by class members and determine the award of the appropriate relief under the settlement agreement. New Activity A function within Workload Management (WLM) that allows a user to create a new activity (request) on an already active case. New Albany Operations Center (NAOC) New Money Basis (NMB) On 12/31/81 all funds in existing pre-8200 flex contracts were converted to new money basis. Each type of fund or premium present on the policy was converted separately. The converted funds earn interest at the portfolio rate.

New Money Interest Rate With this concept premiums and other deposits are invested in short term securities that will generate a rate of return more consistent with the rates available on tax qualified distributions at other financial institutions. Next Transaction Date and Type The date and type of automatic computer activity that will occur next on the policy. No Current Dividend - Status of the current dividend This status enters the master record three months after the policy or premium anniversary, assuming the current dividend has been paid. No Match Items A type of error received when the policy number and surname don't match information carried in the computer. Non-Forfeiture Handling This is a provision provided in a life insurance policy which guarantees at least minimum values to a policy owner who has paid premiums long enough to establish equity in the policy. During non-forfeiture handling, the policy becomes extended term insurance, reduced paid-up insurance, or it is forced surrendered. Non-Life Rider Expands coverage provided under the base policy. Also known as a benefit. Examples of non-life riders are Accidental Death (AD) and Waiver of Premium for Disability (WPD). Non-Medical Insurance Life insurance issued without requiring a medical or paramedical examination of the applicant. In accepting the applicant, the insurance company relies on the applicant's own answers to questions regarding his/her physical condition. Non-Qualified Additional Benefit (Non-QAB) Benefits not qualifying as QABs, according to IRS tax law, are labeled as NonQualified Additional Benefits (or non-QABs). The existence of a non-QAB on a contract will have no effect on the Guideline Single Premium, Guideline Level Premium, Net Single Premium, or MEC Reference Premium of the life

insurance contract. Non-Reportable (or Deferred) Gain That portion of the gain (positive or negative) which is not reported as current taxable income. Non-Tax Qualified (Non-TQ) After tax contributions; not tax deductible. Non-Tobacco (NT) Premium class where applicant has not used any tobacco or nicotine product in the past 12 months. Not Taken Termination where the termination date equals the coverage effective date. Processed when the policyholder doesn't accept the benefit or rider within 90 days of the benefit or rider issue date. Action by which a Contract is rejected by the payee and is terminated. Notepad A place in the system to enter notes. Notepad entries are stored in the Risk Advisor and in the USR. They cant be deleted. Notice A Notice A is sent when the pre-notification form has not been left with the person on whose life the inspection report is requested. Notice and Reason for Non-Issue (NRNI) Notice sent when declining the application, with the reason we are declining. Notice of Adverse Underwriting Decision (NAUD) In complying with the federal Fair Credit Reporting Act, State Farm will inform the proposed insured of the reasons for any adverse underwriting decision made with regards to his or her application for insurance. Notification of Change (NOC) A notice of change is any bank information change that is communicated from the Receiving Depository Financial Institution (RDFI) to the Originating Depository Financial Institution (ODFI) and then back to the originator (State Farm). Notice of Coverage (NOC)

This form is sent to an agent when a non-bound application is ready for final action. Life Applications cannot be issued without initial premium. Notice of Loan Status and Potential Lapse Notice sent to a UL policyholder, if a policy loan is present, requesting a payment because the policy may lapse. The notice is sent on the monthiversary when the account value is unable to pay the monthly deductions and advance the paid-to-date. If payment isn't made before the end of the grace period, coverage will lapse. Notice of Non-Issue (NNI) Notice sent when application is not being issued. The situation may be a decline, incomplete, or request cancel. A decline does not give the reason for declining. A incomplete shows the items not received. A request Cancel shows we are discontinuing handling of the application, as requested. Notice of Payment Due Notice sent to a UL policyholder, if no loan is present, requesting a payment because the policy may lapse. The notice is sent one month after the monthiversary when the account value couldn't advance the paid-to-date. If payment isn't made before the end of the grace period, coverage will lapse. Notice of Reportable Income The Notice of Reportable Income is prepared on the 1st of the month indicated as the Tax Contact Month (PMR Field 102 *) in the employer/employee reference field. This notice is prepared to advise the owner/employee of the amount of premiums paid during the past year that were applied towards the cost of the WPD benefit. Notice Letter Printing (NLP) An application on the system that accesses policy numbers and files, pulling information needed to pre-format documents and pattern letters. O

Objective Criteria Criteria evaluated by the system for the purpose of risk classification. The

system calculates the debits and sometimes the credits for these objective criteria: 1. 2. 3. 4. 5. 6. 7. Build Blood Pressure Cholesterol Triglycerides Liver Enzymes (GGT, AST, ALT) Family History MVR

One to One Conversion A conversion where the original policy is terminated after the change. One to Two Conversion A conversion of part of the coverage under the original policy which results in two policies in force after the change. On Hold This is while the caller is connected to an operation center specialist. The operation center specialist may have put the caller "on hold" to look up additional information. One Year Term Insurance Life insurance under which the benefit is payable only if the insured dies during the specified period, in this case 1 year. Operation(s) Center (OC) Optical Disk The medium on which images are stored. Resembles a compact disk (CD). Optical Disk Library (ODL) Mechanical device that provides automated functions for writing, storing, and reading of optical disks. The library functions are controlled by services provided by document management software. Option 1 On a Universal Life policy, the level death benefit. The death benefit is the basic amount of the policy.

Option 2 On a Universal Life policy, the increasing death benefit. The death benefit is the basic amount of the policy plus the account value. Option 22 A Credit Card Payment Transmittal document is automatically printed when the agent obtains authorization via Option 22 on the NECHO Direct Stand Alone screen. Agent will attach the transmittal document to the paper application he sends to the Operations Center. Option Amount The current amount of One Year Term insurance which may be obtained due to an increase in the CPI. Option Units The number of units of additional One Year Term insurance which may be obtained. Optional Additional Insurance (OAI) This benefit guarantees the insured the right to purchase additional life insurance on specific option dates without evidence of insurability. Optional Additional Insurance (OAI) was first made available as a part of the 4800 series policies and has been included in all subsequent series. Beginning with the 7800 series the title of the benefit was changed to Guaranteed Insurability Rider (GIR). Oral Specimen Test (OST) A test specimen for nicotine, cocaine, and HIV antibody that is collected in the agent's office. Origination Depository Financial Institution (ODFI) A participating financial institution that originates Automatic Clearing House (ACH) entries at the request of and by (ODFI) agreement with its customers. ODFIs must abide by the provisions of the National Automated Clearing House Association (NACHA) operating rules and guidelines. State Farm currently utilizes Bank One as its ODFI. Other Country (OC) This is the acronym used when inputting information for a country not listed in the country code section of the address change manual.

Outstanding Check A payment or withdrawal checks which has not been cashed. Ownership Change A policy may be owned by the insured or by someone other than the insured. The owner has all rights to the policy, and the owners signature is required for all changes. The policy owner may transfer ownership of the policy at any time. Ownership Transfer Alert (OTA) Sixty days prior to the insured's 21st birthday or the date on which the age in the Extended Control Agreement is attained, an Ownership Transfer Alert notice will be sent to the purchaser. This will notify the purchaser that ownership will transfer to the insured on the insured's birthdate. The notice will also give the purchaser the option of extending control of the policy to a later age by signing an Extended Control Agreement. P

PAC Bank Authorization A form that policyholders on PAC must complete. The form gives us permission to withdraw funds from the policyholder's bank account. Page In scanning terms, a page represents one side of a single sheet of paper because both sides of the paper are scanned at the same time. This is otherwise known as duplex scanning. Therefore, one piece of paper consists of 2 pages. Paid as Billed (PAB) Payments which correspond exactly to the amount billed. Paid Dividend - Status of the current dividend This status enters the master record on the policy anniversary. However, if a payment date change or pro rata exists on the policy, then this status enters the master record on the premium anniversary. Paid Form Credits (PFC)

Paying the entire premium from credits, as opposed to only a portion of the premiums being paid by credits that is Credits to Avoid Lapse (CAL). Paid in Advance Premiums (PIA) Premiums paid far enough in advance of the due date to earn a discount. Paid in Cash Dividends will be paid in cash. Paid to Date (PTD) This is the date to which premiums have been paid, including paid-inadvance. Paid-Up Additions (PUA) Additional life insurance purchased with policy dividends. No additional premiums are needed for paid-up additions. Paid-Up Insurance An insurance policy that requires no further premium payments. Partial Payments A partial payment is a payment that does not represent the entire premium due, i.e., not a whole payment. For example, if a policyholder's monthly premium is $65, and $40 is received for the month of July, the $40 is a "partial" payment. Pay by Phone (PBP) Is an agreement between the customer and their financial institution? Method of premium payment whereby customers instruct their Bank or Savings and Loan to pay bills which have been received from a list of predetermined participating businesses. Payee Person receiving payments. Payment Accounting Team (PAT) Unit is responsible for processing payments for modes other than Special Monthly. Also responsible for clearing suspense listing items, as well as credit card payments and check processing/mailing functions. Payment Date Change Whenever a premium due date is changed so that it does not fall due on the

policy date, special consideration or handling must be done within the computer system. For example, if a policyholder has a annual premium due on a June policy date, but wants payment to fall due in October instead, he or she pays a four month pro-rata amount to move the annual due date to October. This policy then has a payment date change. When the policy anniversary isn't the same as the premium anniversary, this is also called a consideration amendment. Payment Mode Frequency of payment (annual, semi-annual, quarterly, or monthly). Payment Notice Type of anniversary notice a UL policyholder receives if State Farm has to bill for the premium (mode is annual) or policy loan interest due. Payment Options The various methods under which policy proceeds are paid out to the payee. Payor For policies on PAC. We take the premiums due from the payor's (generally the policyholder's) bank account. Payor Insurance (PI) Provides insurance on the life of the purchaser of a juvenile policy. The rider is attached to the child's policy. It pays the premium in the event the purchaser, usually a parent, dies or becomes disabled before the rider expires. Payroll Deduction (PD) Refer to Employee Payroll Deduction. Patch Code A type of barcode that tells the imaging scanning software where the next document begins within a batch. Pend The act of holding a file for a specific action until a certain date. Pending Case Cases or applications within Workload Management (WLM) or Risk Advisor that are waiting for additional information in order to be completed or

issued. Pending Record Established when certain information is input into the life system. When this information is entered, the system will assign a policy number and place the application into a "pending" status. Pending Status A record that has not been put in-force. Pension Adjustment (PA) This represents the reduction in the maximum amount that an individual may contribute to an RRSP as a consequence of his or her participation in an employer sponsored RPP or DPSP. Pension Service (PS) This is the PS in the P.S. 58. When life insurance is included inside a pension plan, the participants must recognize the cost of the current economic benefit provided by the plan (IRC 72(m)(3)(B), Reg. 1.72-16(b)). Each participant is taxed currently on the cost of the pure life insurance benefit. This then enables the pure life insurance benefit to be received by the beneficiary free of income tax. The cost of this current benefit is commonly referred to as PS 58 cost. Thats because the cost was determined by using the one-year term rates published as Pension Service Table 58 in Rev. Rul. 55-747 (1955-2 CB 228). Per Stirpes Means per branch (as opposed to "per capita" meaning per person.) A per stirpes designation will apply only if there is more than one beneficiary in a class. By law the term means that the children of any deceased beneficiary in the class would divide that deceased beneficiary's share. If the deceased beneficiary did not leave any children, that share would be divided equally among the remaining beneficiaries in that class. Period Certain A specified time during which an insurer unconditionally guarantees that benefit payments will continue under a settlement option or annuity. Permanent Insurance that is in effect for the entire life of a person. Sometimes called

whole life insurance. Permissions The elements of the profile that establish what a user is allowed to do. Permission levels are Individual, Team, Group, Function, and Life. Persistency Alarms Policies shown in this category have an unpaid premium at the premium due date plus 15 days. This message is prepared during the lifetime of the policy and is applicable to all modes of payment. The servicing agent will receive the message for the lifetime of the policy, and the compensation agent will receive the message for only the first two policy years. Personal and Confidential (P&C) Information intended for private use or use by one person which contains information whose unauthorized disclosure could be prejudicial to that private person's interest. Philibert A computer system software application that is used in Life Company to calculate life policy premiums. Phoenix A company specializing in wealth management services that State Farm has an outsourced relationship/alliance with. Phone Call Record (PCR) Physically Incompetent Not legally qualified. Plan Design and Administration (PDA) Plan Design and Administration provides agents with plan design assistance for agent plans. Plan to Plan Payment When funds are moved from one tax qualified plan to another and the funds are not mailed to the individual first (that is, the check is from another company and made payable to State Farm), it is considered a "plan to plan" payment. This type of payment is only allowed on Individual Retirement

Annuity (IRA) or tax qualified Single Premium Deferred Annuity policies. A prompt in the MS screen allows us to identify plan to plan payments. This transaction is not reported to the IRS. Plan to Plan Transfer Refer to Plan to Plan Payment. Planned Premium Universal Life premium the policyholder decides to pay. PLUS Edits A series of edits in the Legacy system that an application goes through. Policy Anniversary The day on which the policy date falls each year. For example, if the policy date is November 19, 2002, the policy anniversary will be November 19 each year. Policy Change Team The purpose of the Life Policy Changes Team (PCT) is to administer and process various changes and related services to existing life policies. Our PCT Unit provides technical expertise to other Life departments, agents and their staff members regarding Change of Plan transactions, Conversions, Added Benefits, Universal Life Increases, Reconsideration of Ratings, Re-entries and a range of other changes and procedures that are performed within the policy changes area. Policy Count/Paid for Count This is agency credit that is allowed when the initial premium is paid and measures an agent's production annually for agency contests. Policy Date The effective date of this policy. Policy Date Day Day stated in the policy date. For example: if the policy date in November 15, 2003, the policy date day is the 15th. Every policy month begins on the policy date day. In the November 15, 2003, example, the first day of each policy month is the 15th. Policy Effective Date

The date indicating when the policy went into effect. Policy Fee The policy fee is a flat charge added to each premium. This fee covers expenses in administering the policy. Policyholder The person in actual possession of an insurance policy. Often used loosely to refer to the policy owner and/or insured. Policy Loan Whole life and endowment type policies develop value in the policy called cash value. Once a policy develops cash value, the cash value can be used as security to obtain a loan. Cash value depends upon the face amount, length of time in force and length of premium paying period Policy Master Auxiliary Record (PMAR) A record is set up in the PMAR, whenever a payment is made to Flexible Premium Annuity, Deferred Life Annuity, Single Premium Deferred Annuity, or a Universal Life policy. The PMAR carries information such as the date the payment was received, the effective date for which the payment was applied, and the payment amount. Policy Master Record (PMR) A system record accessed in UNIX that can allow changes to information on a policy. Policy Minimums The lowest amount of coverage issued for a particular plan. Because of the Conversion provision, the Company can issue a permanent policy below the minimum if the Conversion amount is less. Policy Month The month in the policy date. If the policy date is November 15, 2003, the policy month is November. Policy Note A type of note in the Life TRIO Notes System. A Policy Note is: 1. Used to record information requiring permanent retention. 2. Used on the Create New Case Page when creating a case not associated

with an image. 3. Not used to pass instructions to someone else. 4. Retained for the duration of the Policy Master Record. 5. Permanent and cannot be changed or deleted. Policy Number Every policy has a unique number assigned to it that is from 18 digits long. Oldest policies from the early history of the company are 1 or 2 digits long. Most policy numbers you'll be dealing with will be newer policies and will be 68 digits long. Policy Output Unit (PO) This is the final review unit within the COU that is responsible for assembling and mailing the policies to the agent. Policy Proceeds The amount payable at the death of the insured person. Policy Projection (PPR) Transaction used to run a policy projection used with certain policy types. Policy Provision A statement or clause found in an insurance policy. The policy provisions outline the promises of the Company and the policy owners rights under the contract. Policy Series Life policies issued during a certain period of time. These policies contain similar settlement provisions. Policy Split Provision This provision is available with the Second to Die and Joint Universal Life policies. With this provision, the policy owner may elect to divide this policy into two individual whole life policies. The owner can exercise this provision when there is a divorce, business dissolution, or other reason (must be approved by Actuarial). Policy Status Record (PSR) Contains all the information about the insured under a specific contract. The information is updated overnight.

Policy Total Mode Gross Premium This premium is the total premium the insured is billed for, including the premium for the base policy and any benefits or riders in force in the PMR. Policy Year The 12 month period which begins on the policy date each year. If the policy date is November 15, 2003, each following November 15 begins a new policy year. Policyholder Notice A computer-generated letter, which is sent to the owner of the insurance policy. The notice provides information about the policy and action that has occurred. Policy Owner Person who may exercise all of the ownership privileges available under a life insurance policy. Poor Quality Original A document that is difficult to read because it is too light or too dark. Scanner operators need to know the original document was of poor quality so they do not try to rescan the document to improve its readability. Portfolio Rate The difference between the guaranteed rate and the stated rate of an annuity. Post-Budget Policies issued after December 1, 1982 and policies which have had changes made to them. Changes cause a policy to lose a pre-budget status (e.g., increasing the premium or face amount). Post-Settlement Notice Package - Jordan Under the Jordan Settlement, the Post Settlement Notice package containing benefit election forms were mailed to eligible class members who did not opt out of the class. Class members seeking claim review or Terminated General Relief were asked to complete and return the election form within a certain time period to be eligible for those benefits. Class members seeking In Force General Relief did not need to complete an election form. Power of Attorney (POA)

The written authorization by the Company conveying the right to sign bonds. The individual named on the power of attorney is an attorney-in-fact. Pre-8200 Series Life policies issued through 1981. Pre-86000 Series Policies Policies issued before January 1, 1986. Pre-Authorized Collection (PAC) This is the abbreviation for Pre-Authorized Collection. In this special monthly mode, policyholders have their monthly payments taken from their bank accounts directly by electronic or paper withdrawals instead of having to write and mail checks themselves. Pre-Budget Policies issued before December 2, 1982 or policies which are the result of a conversion from a term policy issued before December 2, 1982 retain a prebudget status. Pre-Tefra Keogh Plan These are Keogh plans that were established prior to the Tax Equity Fiscal Responsibility Act of 1-1-1984. The available prototypes were the flexible premium annuity, profit sharing, income endowment, defined benefit, and the agents trustee. Preferred Premium Rates Lower premium rates available on certain policy types based upon the applicant's health history. Preferred Risk (PPR) An underwriting rate class that equates to a person with health characteristics that are better than average. Premature Distribution Disbursement of proceeds from a non-tax qualified or tax-qualified plan annuity before the payee is age 59 (does not apply when payee is disabled when the policy is annuitized or under certain other circumstances, or retired after age 55 on a tax qualified plan policy except IRA.) Preliminary Term (PT)

Term insurance that permits the owner to choose a specific Policy Date within 11 months following the Issue Date of this benefit for the purpose of having premium due dates occur at a more convenient time. (Used when adding life riders on a date other than the policy anniversary dates.) The insurance coverage provided by this benefit is equal to the coverage, which will be in effect on the Policy Date. Preliminary Term is not available on Universal Life, Annuity, Single Premium Life, or Second to Die policies. Premier Case Unit (PCU) This unit is responsible for underwriting applications: for coverage of $1,000,000 and higher, applications which have a large amount of premium (over $5,000 annual premium)or premium dump over $10,000. The core team is located in Bloomington, Il with field underwriters located in the 4 zones. Premium This is the amount the policy owner pays each mode period for the life insurance he or she has purchased. Premium Anniversary Date (PAD) In general, a policy's premium anniversary is not required to coincide with the policy anniversary. A policyholder can request a premium due date that is off the policy anniversary date. Premium Credit Agency credit when the first policy year premiums are paid in full. These are used to measure an agent's annual production for agency contests. Premium Credit Accumulation (PCA) A section on All-in-One policies that provided for payment of an extra amount with each premium for the first 20 years. The extra payment was accumulated in the 258 account, and if all payments were made, the premium credit accumulations were guaranteed to be sufficient on the 20th anniversary for election of a paid-up or endowment policy. Premium Deposit Reserve (PDR) Rider available before 1-1-1978. Allows voluntary contributions that accumulate at interest to be used to pay up the policy before completion of the regularly scheduled premium payments. Premium Offset (PO)

Premium offset is a method of paying a life insurance policy's ongoing premiums using accumulated dividends and/or the surrender value of paidup additions. Premium offset is neither a policy provision nor a dividend option. Pre-Notice State Farm Life provides the policy owner an opportunity to elect out of withholding before releasing any money. Prepaid Comp Annualized writing and servicing compensation payable beginning with the 4th policy year under the AA4 contract and in the 6th policy year for agents under the AA97 contract. Prepaid Service Annualized compensation for servicing only. Primary Beneficiary (PB) Person or persons named to receive the amount payable upon the death of the insured person. Primary Compensation Premium (PCP) Universal Life premium used in calculating the agent's commissions and premium credits. Primary Policy Owner (PPO) Client's role on the policy or account; the person who may exercise all of the ownership privileges available under a life insurance contract. Principal Insured (PI) The person whose life or health is insured. It is important to make the distinction between the "policy owner" and the "principal insured". They can be the same. However, it is possible for a "policy owner" to be someone other than the principal insured. In fact, entities such a corporation might own a policy on a principal insured. Principal Insured Riders Insurance coverage, other than the base coverage, provided on the principal insured under a life insurance policy. Principal Named Insured (PNI)

Client's role on the policy or account; the persons whose life is covered by the contract. Principal Partner Party who acts on behalf of the partnership. Prior Year's Test Prior years of the 7 year test period must also be re-tested if the MEC test is being done after a reduction without adjustment. Payment information is accumulated from PMARs for each one-year period from the MEC effective date until the transaction effective date. If the cumulative payments (less non-taxable distributions) exceed the calculated test amount for any of these years then the policy has failed the Prior Years test of this MEC test and will be marked as a MEC (reason code = D). The system does not currently support the re-testing of prior years for traditional policies. The Tax Department must manually determine whether the traditional policy has passed or failed. The system does support the Prior Years test for Universal Life, Second to Die, and Variable Universal Life policies. However, there may be certain situations on a UL where the system was unable to determine whether the policy would have failed the Prior Years test and the Tax Department will trigger a new system test after restoring archived PMARs. Priority Annuity Annuity applications received with $250,000 or more are considered Priority Annuities. Probate The process of proving the validity of the WILL in court and executing its provisions under the guidance of the court. When a person dies, the will must be filed before the proper officer of the court, giving this court jurisdiction in the matter of enforcing the will. This is called "filing the will for PROBATE" Problem An area in Risk Advisor for noting information about a risk selection item. Proceeds The sum of the insurance amounts payable under 1) the Basic Plan, 2) any paid-up additions, and 3) any rider on the Insured - plus any dividend credits, any dividend payable at the Insured's death, and any premium paid for part

of the payment period beyond the Insured's death less any loan, any accrued loan interest, and any part of a premium due. The net amount of life insurance owed the beneficiary when the insured person dies. Process Guides The procedures manuals which guide you in issuing and servicing our policyholders' files. These books are considered one of your main sources of information. If the Process Guides don't help, you should consult your supervisor. Processing Method (PM) As related to the method(s) of payout for Annuity and Supplementary Contract Claims. Profile Describes the location and relationship to the organization that the user is associated with and what actions the user can perform within the system. A profile can be created for an individual, team, group, or function. Each user must have a profile. Profile Administration System (PAS) An application used to establish, modify or terminate access on all systems for Life/Health employees in the Operation Centers. When establishing, modifying, or terminating access on all systems for Life or Health employees in the Operation Centers, the PAS (Profile Administration System) Application is used instead of the form. Profile Wizard The tool used to create, modify, and view profile information. Prompt A short phrase on the computer screen instructing you to enter certain data. Prompts lead you through a transaction. Proposal An offer made by State Farm to a potential customer with respect to the purchase of State Farm product. Proposed Insured (PI) Refer to Principal Insured. Pro-Rata

When premiums are due in months other than the month of the policy anniversary date. A policy owner is permitted to arrange these dates for convenience. Pro-Rata Deduction A partial deduction that must be collected as part of policy expenses when the reinstatement of a Universal Life (UL) policy is on a date other than the monthiversary. Pro-Rata Factor The pro-rata factor is the increase of cash value between the paid-to-date and the last policy anniversary. Purchase Paid-Up Additions Dividends will be used to buy paid-up life insurance additions to the Base Plan. Dividends may be paid on the additions. The additions may be surrendered for their cash value at any time. At the Insured's death, any additions will be added to the death benefit. (This option is not available on term policies.) Purchaser Anyone applying for or owning insurance on a child with an issue age of 0 to 15. The purchaser can exercise all rights of ownership. Purge/Purging The process of identifying and destroying nonessential documents or documents that have satisfied their retention period. Push Button A rectangular box which is selected if a particular action is desired.

Q Qualified Additional Benefit (QAB) Certain specified benefits are defined in IRS tax law to be QABs. They include: 1. Guaranteed insurability

2. Accidental death benefit 3. Family term coverage 4. Waiver of premium (or waiver of monthly deductions) As a general rule, when a QAB is present in a life insurance contract, the actuarial limitations under section 7702 or 7702A may be increased to reflect the charges for these benefits. Characterization of a benefit as a QAB permits the Guideline Single Premium, Guideline Level Premium, Net Single Premium and MEC Reference Premium for a contract to be increased, above the amounts reflecting only the base life insurance contract. Qualified Domestic Relations Order (QDRO) A domestic relations order that creates or recognizes the existence of an alternate payee's right to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits payable with respect to a participant under a pension plan, and that includes certain information and meets certain other requirements. (A form that is necessary in order to transfer a Pre-Tefra Keogh policy to the spouse in the event of a divorce.) Quantity Savings Addition Dividend (QSA Dividend) A type of dividend with a purpose to make the cost more equitable for the larger policies. It is payable on pre-6400 series as a part of the regular dividend. QSA dividends may be found in the current dividend scale. Quotation A transaction that provides a con form showing the current balance of a Contract, the withdrawal rule, and other Contract information.

Rate book State Farm provides a manual which lists the premiums to be charged at each age for the coverages the insured chooses. The rate book also contains information such as dividends, values, and underwriting guidelines. Rated Policy

A policy issued at a higher premium rate to offset the risk of insuring an individual whose health (or some other risk factor) disqualifies the individual for Standard or Select rates. Rated Single Policy (RSP) Used with the EXC or EWN functions. This item will be present only if the base policy and/or one or more of the riders to be paid-up is related. The amount to be input is the cost of paying up the policy. It is the amount of cash and PMR funds required. It does not include the cash value of the policy, the paid-up additions and One Year Term insurance. Read-Only Field A piece of information that can only be read. A read-only field cannot be changed. Reassign A process in Workload Management (WLM) or Risk Advisor (RA) of routing an activity to another individual or team, when needed (for example, workload volume, employee availability, etc.). The activity is moved to the appropriate In-tray of the new assignee and is no longer in any of the original users In-trays. Active and pended activities may be reassigned. Reassigning a pended activity moves the activity to the new profile's Pended in-tray. Re-characterization The movement of a current year or prior year contribution from a traditional IRA to a Roth IRA or of a current year or prior year contribution/conversion from a Roth IRA to a traditional IRA. Reconciliation Process you follow when the amounts generated by the computer do not equal the premiums received. Involves removing or applying payments on policies in order to balance with 136, 139, 283, or other accounting entries. Recording Method Processing a beneficiary change without the policy contract. Record Status Indicates if the policy is in-force, terminated, on extended term insurance, etc. Recovery

Payee is no longer disabled and payments end. Re-designation Re-characterizing the entire policy with the same trustee. Reduced Paid-Up Insurance When there is not enough cash value to pay the full premium due, the cash value available is applied as a single premium to purchase a reduced amount of paid-up insurance. This is an automatic non-forfeiture option on some policies. Reduced Premiums Dividends will be applied toward payment of premiums when due. (This option is not available on the monthly or special monthly payment modes.) Reduction Rule The Reduction Rule is a provision of TAMRA which requires recalculation of the MEC reference premium. Reduction without Adjustment will change the MEC Reference Premium retroactive to the beginning of the current 7 year period. A Reduction without Adjustment is generally done when there is an intentional decision to reduce the amount of insurance. Examples are: A decrease in the amount of insurance provided by the base policy, or the cancellation of a benefit or rider. Reduction with Adjustment will change the MEC Reference Premium for the remaining years within the 7 year period, but does not change the MEC Test Amount immediately. The adjustment offsets the change in the reference period for the past and current years within the 7 year period. A reduction with Adjustment is generally done when the change to the amount of insurance is unintentional or outside of a conscious decision by the policyholder. Examples are: Correction of Sex or Age and/or Additional Insured Death. Reductions must occur during the 7 pay test period in order to affect the policy under TAMRA. Reentry Term A term insurance policy with Select and ultimate rates which allows the insured to renew (reenter) the policy at lower attained age Select rates instead of the policy's guaranteed renewal at higher attained age ultimate rates. Reentry requires evidence of insurability. Reference Number An identifying number used to keep track of an account during certain

transactions. Often policy numbers are used as reference numbers. Some accounts process only with the use of reference numbers. Referral (RHO) Electronic form sent to Life Health General Underwriting for their opinion on an underwriting concern. Cases can be referred to other areas, for example, claims. Referred A process in Workload Management (WLM) or Risk Advisor (RA) that allows the user to move a case to a selected individuals in-tray for review and recommendation, while retaining activity ownership. Reform Refer to Rescind. Refresh An action in Risk Advisor (RA) used to update an Underwriter's in-tray list and allow new applications or updated information to be included for viewing. Regional Office (RO) Register A record of business activity that occurs in each working day. Registered Retirement Income Funds (RRIF) An investment plan, established in accordance with Government of Canada requirements, into which you can transfer registered funds (usually your RSP) without tax liability for the purpose of establishing an income stream for life. Registered Retirement Savings Plan (RRSP) An arrangement between an individual and an issuer (an insurance company, a trust company, or a bank) under which retirement income commences at maturity. Contributions are made by individuals and are deductible under the Income Tax Act. Earnings in the plan remain tax free and payments out of an RRSP are taxable on receipt. Register Retirement Savings Plan - Canada Only (RRSP)

The State Farm Insurance Companies Savings and Thrift Plan for Canadian Employees is a long-range savings and profit sharing plan. The plan is designated to allow an associate to save money for retirement to supplement the employees Canada/Quebec Pension plans, Old Age Security benefits, and other personal savings and investments. Regular Monthly Modes/Direct Pay Monthly A method of paying monthly premiums where the policyholder is billed directly. Re-Indexing The process of changing or adding index values for an imaged document. Reinstatement The steps taken to put insurance coverage back in force once it has lapsed or continued as extended term or reduced paid-up insurance. Reinstatement Review Form The form used to determine if a policy can be approved for reinstatement in Service or if it must be referred to Underwriting. Reinsurance An agreement by which one insurance company transfers part or all of its risk of loss under policies it issues to another company by means of a separate contract. Relationship Connection the beneficiary has with the insured person. Release An action in Risk Advisor (RA) to activate a record or policy from a pending or hold status. Release No Values Transaction restriction code indicating that no policy values will be released until authorized. Release to Underwriter An action in Risk Advisor (RA) that releases application information to the underwriter's in-tray even when there are input errors. Remittance Processing

Designed to handle those payments which correspond exactly to the amount billed on a premium or other notice which contains a scan line. Renewable One of the provisions of term insurance where, at the end of the stated term period, the insured can continue the insurance with a premium charges according to the insured's current age. Re-Open A file which had been closed but is once again opened as an outstanding file due to additional activity and/or information. Replacement A new policy written to take the place of one currently in force. Reports - Cognos Cognos reports can be produced on workload summary or productivity for an individual, team, or group. Requested Item An action in Risk Advisor (RA) or Workload Management (WLM) that requests additional documents, information or action needed for a pended activity before the activity can be processed or completed. Request Pre-Authorized Collection (RPC) A transaction made to Pre-Authorized Payments on a date other than the normal withdrawal date. Request for Details The MIB Request For Details is utilized within life underwriting to substantiate and/or confirm the accuracy of a medical impairment code. This request is made through MIB in which the reporting company is asked to furnish details surrounding their MIB code report. Request for Underwriting Consideration The form used by Service to refer policy changes to Underwriting for approval or denial of the new risk. Request Letter Form used to request a changes in a Life policy and/or the related office records.

Required Minimum Distribution (RMD) Retirement benefits from tax qualified annuities which must be distributed and taken by the policy owner no later than April 1 following the year the individual attains age 70 1/2. Required Premium (RP) Refers to payments (or the 111 account) on Flexible Premium, Deferred Life Annuity, and Single Premium Deferred Annuity policies. If the policy is tax qualified, RP represents the qualified payments that have been applied to the policy. If the plan is an Individual Retirement Annuity (IRA), RP may also include non-deductible contributions. Required Signatures Signatures required prior to making policy changes. These may include: insured, policy owner, additional insured, assignee, or irrevocable beneficiary. Requirement A Risk Advisor (RA) term for outstanding item(s) needed before the case can be final action to issue the policy. Rescind To avoid or cancel in such a way as to treat the contract or other object of the rescission as if it never existed. Rescission Refer to Rescind. Restriction Code A code that can be placed on a policy thru the UNIX system to restrict access when we are aware of pending situations such as bankruptcy, pending divorce, tax lien, etc. Retention The length of time the company is required to keep a document. Return Mail Mail returned by the Post Office for incorrect or incomplete address. Return of Premium (ROP) ROP Term 20 and ROP Term 30 Products will have level premiums for 20 and

30 years, respectively. The policyholder is protected by a death benefit and all of the premiums paid into the contract will be refunded if the insured survives to the end of the level premium paying period. The policyholder can then choose to continue the coverage on an annual renewable term basis if desired. Returned Check A check that was received for payment is returned by the bank, unpaid. Reusable Jacket Heavy paper folder used to hold the Life application, CON, and all necessary correspondence. Plastic pocket on front is used to hold the jacket numbering sheet. When items are imaged, the jacket is used for another application. May also be called an app file. Revised Basic Illustration (RBI) In states that have adopted NAIC Illustration Model Legislation, a revised basic illustration is required when a policy is issued other than as applied for. Revocable Beneficiary A beneficiary whose rights are subject to the rights of the policy owner who may not revoke or change the beneficiary designation and exercise any ownership rights under the policy without the beneficiary's consent. Rider A special policy provision or group of provisions which you can add to a policy to expand the benefits otherwise payable. Includes both life riders and non-life riders. Right of Commutation The right to elect another settlement method or to withdraw the entire proceeds in one lump sum. Right of Withdrawal Payee's privilege of requesting payment of a part or all of the policy proceeds remaining with State Farm under a settlement method. Risk Advisor (RA) (Life) A software application program that was purchased and modified to assist the Life underwriting process and is a part of the Life UNIX-AIX server infrastructure.

Risk Not Acceptable (RNA) Underwriting risk that exceeds our guidelines. The application will be declined. Role An individual's working relationship in the organization: administrative, claims, clerical, corporate, service, system coordinator, underwriting. Rollover Funds deposited into a Flexible Premium Annuity earn interest for one year at the rate specified for the month when the deposit is made. At the end of a year, those monies rollover at the new interest rate declared for that month. This continues each month in a series of fund rollovers from the previous years. Rollover Payment A rollover payment consists of lump sum assets that are transferred from one tax qualified plan to another and the funds come directly from the individual. Roth Individual Retirement Arrangement (Roth IRA) An individual retirement account in which investments are made with taxable dollars but earnings are tax free after the age of 59 1/2. A Type of individual retirement arrangement that permits people within certain income limits to make nondeductible annual contributions and to withdraw money on a tax-free basis at retirement age. Routing and Transit Number Eight unique digits plus 1 check digit assigned to each bank or credit union by the Federal Reserve System. These numbers are printed on the checks and identify the bank or credit union. Routing Number Refer to ABA Routing Number. Registered Pension Plan (RPP) Employer sponsored pension plan in Canada. Registered Retirement Savings Plan (RRSP) An arrangement between an individual and an issuer (an insurance company, a trust company, or a bank) under which retirement income commences at

maturity. Contributions are made by individuals and are deductible under the Income Tax Act. Earnings in the plan remain tax free and payments our of an RRSP are taxable on receipt. Royal Bank of Canada (RBC) Handles bank transactions for the Canada mutual funds and investments.

Salary Allotment Employees of a common employer or members of a related group having a common source of compensation (a school district, for example) are eligible for Salary Allotment special monthly mode of premium payment. Premiums are deducted from the employee's earnings and paid directly to State Farm Life each month by the employer. Salary Reduction Agreement A form that must be completed by policyholders on Salary Allotment where a Tax Sheltered Annuity is involved. The agreement shows how much money we will receive each month. The policyholder's employer uses this form as authorization to deduct the premium from the policyholder's paycheck. Save Age The effective date of the policy is the day before the insured's last birthday. If a policy is backdated to save age, the insured will be charged a lower premium because of the lower issue age. You cannot backdate more than six months before the application date. Backdating is not allowed on Universal Life and Single Premium Life. Scan/Scanned The process of converting a paper document to an electronic image. Scanner Equipment used in Insurance Records that converts paper documents to electronic images. SCG

A&SC General Maintenance prompt used to make corrections on the system to contracts. SCM A&SC Miscellaneous prompt used for servicing transactions on a contract. Scratch Pad Message (SPM) An area in the Policy Master Record that indicates brief notes or information about the policy. The message will appear just under the insured's name on many screens. Scroll Bar Moves the panel so that all information can be seen. Second Parent Rider (SPR) This rider applies to a One Parent Family Policy only and provides insurance for the second parent. Second to Die Life Insurance A type of life insurance policy that insures two lives. The death benefit is payable at the second death. Generally, this product is used as a funding vehicle for estate taxes payable at the second death when the unlimited marital deduction is utilized. Second Request If the Pend follow-up date is reached and not all items are received, another e-mail is sent to the agent requesting the outstanding information. The previous pend reasons(s) are pre-populated. A message generates at the beginning of the e-mail stating it is a Second Request, and a new follow-up date is set. Secondary Window A window that contains information that is dependent on information in a primary window and is used to supplement the interaction in the primary window. Section 1035 Exchange The exchange of one life insurance contract for another when any taxable gain on the old contract may be deferred until a later date. Securities and Exchange Commission (SEC)

A federal Agency created by the Securities Exchange Act of 1934 to administer the act and to help protect the interests of investors. Securities Products Department (SPD) Select Insured A select insured has a special classification used in rate calculations (for example Unisex, nonsmoker, male with female rates). A non-select insured could be a smoker. Self Employed Individuals Trusteed Retirement Plan Is for State Farm Independent Contractor Agents. This is an all regions agents' payroll deduction salary allotment plan administered out of the Illinois and North Atlantic Zoned Regional Offices. Send Application A function in Risk Advisor (RA) which sends the application information to be processed. Senior Interview Source of underwriting information that consists of a professional interviewer talking directly with an applicant to obtain medical history and availability to complete basic functions of daily living. The interview is transmitted to the underwriter as a Q & A Document. Sensitive Confidential Medical Information (SCMI) Medical information that State Farm does not want to or legally cannot share with customers, policyholders, employees or other third parties. Sequence Number A sequence number is automatically assigned by the computer to each transaction processed. In restart situations, sequence numbers help determine whether any transactions were not processed. Series 6 An examination that must be successfully completed to receive the Registered Representative designation. This designation is required by the NASD for all individuals who supervise, solicit, or conduct business in securities and all individuals who train people to supervise, solicit, or conduct business in securities.

Server A LAN-based computer system that allows many users to share applications, data, or printers. Examples of servers include NetWare, Windows NT and Lotus Notes system. The system component that relays an imaging retrieval request from the requesting workstation to the FileNet system. Service Date An index value identifying the treatment date (MM/DD/YY) on Health Claims medical bills. Service Link A Corporate department that will answer questions and give directions on the handling on Life Company processes and procedures. The Service Link is for zone office use only. It is not intended for use by agents or policyholders. Servicemen's Group Life Insurance (SGLI) On September 29, 1964, Public Law PL89-214 became effective. It set up a Group Life insurance program for all members of the Armed Services on active duty on and after that date. On May 24, 1974, Veteran's Insurance Act of 1974 was signed into law. This law amended PL89-214 to broaden SGLI coverage to most members of the Ready Reserve and designated units of the National Guard. The Servicemen's Group Life Insurance (SGLI) program is privately underwritten with the Prudential Insurance Company of America as the primary insurer. Service Transaction Record (STR) An unsigned request initiated by a phone call, email, or administrative message from an agents office, on behalf of the policy owner for specific transactions such as disbursements and file maintenance. Servicing Agent The agent currently assigned to the insured's policy records and providing service to the policy owner. Servicing Compensation Compensation that is paid to the active agent who is servicing the policy at the time the premium is paid. Settlement Agreement Form used to type a beneficiary designation for a pre-7000 series policy.

(Called "Endorsement Form" for 7000 series policies and later.) Settlement Methods Life insurance proceeds are paid upon the death of the insured, at surrender, or maturity. Settlement methods represent choices available to the policy owner or beneficiary of a life insurance policy regarding the method by which the insurer will pay policy proceeds. Annuities have several different settlement options. Life policies have other additional optional methods of payment that can be selected by the policy owner. Your Life Rate book outlines these settlement options under tab "F" - Annuities/Options Methods of Payment. Settlement Options Life insurance proceeds are paid upon the death of the insured, at surrender, or maturity. Settlement methods represent choices available to the policy owner or beneficiary of a life insurance policy regarding the method by which the insurer will pay policy proceeds. Annuities have several different settlement options. Life policies have other additional optional methods of payment that can be selected by the policy owner. Your Life Rate book outlines these settlement options under tab "F" - Annuities/Options Methods of Payment. SFnet The Company's internal communication network which incorporates internet technology allowing interactivity and file distribution for State Farm associates and Agents. SFPP Tape Computer tape where SFPP payments are recorded each day. Signature Documents Properly signed documents that are required to issue the policy. These may include the following items based on the policy plan, amount, and state/province: Signature copy of Application, HIV Consent Form, Summary Adjustment of Premium, Replacement Forms, Agents Statement, Signed Acknowledgement/Authorization Form, Certification of No Illustration, Disclosure Ticket, Illustration, Bank Disclosure Form, W9, Tax Consequences Form (Maryland only), SPDA Disclosure Form, Canadian RRSP Form (Canada only) Note: Signature Copy includes all pages of the application,

authorization and agents statement. Simple Conversion Term conversion where you are not adding any additional coverage or retaining any coverage on the original policy. Simple IRA Savings incentive match plans for employees created by the Small Business Protection Act of 1996-State Farm does not administer these plans but does accept and process rollover requests. Simplified Claim Payment (SCP) Allows payment of small death claims with a minimum of forms. Single or multiple policy total base amounts must be $25,000or less. Death must be due to natural causes and cannot be due to suicide. Other considerations may be a factor in consideration. Simplified Employee Pension (SEP) An alternative to a Keogh plan that allows employers who have not established qualified retirement plans to contribute to their employee's Individual Retirement Accounts. Single Capture An application developed in-house that uses Panagon Capture Professional as its core components. With Single Capture, the scanning, indexing, and Quality Assurance functions for any business area (e.g., Insurance Records, Claims, Life/Health) can all be performed via a single application. Single Premium Annuity An annuity policy that is paid for with a single premium all at once. Single Premium Creditor Group (SPCG) Is coverage that is optional on the part of the debtor, and should he choose the coverage he pays the total premium which is added to the total loan amount. If the debtor elects the coverage, the agent involved will receive a commission. Single Premium Deferred Annuity (SPDA) An annuity contract under which the lump sum premium used to purchase the annuity is paid up front by the insurer and payments are deferred until some future date specified by the contract owner.

Single Premium Immediate Annuity (SPIA) An annuity contract purchased with a single premium payment that begins paying annuity benefits one annuity period after the annuity is purchased. Single Premium Joint Annuity (SPJA) An annuity contract purchased with a single premium payment that begins paying annuity benefits one annuity period after the annuity is purchased to more than one person. Single Premium Life The whole life policy has only one premium due on the policy date. The policy is fully paid up by the payment of the single premium. Policy will become a MEC at issue. Situation Codes These codes help process miscible accounting transactions by identifying the function to be accomplished. Codes consist of an alphabetic character that corresponds to a particular transaction, for example, situation code "P" = Premium Payment (the function). Sixth Sense This is a software package that runs on the client desk top. It will activate a script on the workstation when the telephone rings to do screen pops to show policy number and PIN of the caller. This is used to retrieve unit price information from the telephone database. Softphone This is a software package that runs on the client desktop. It allows the operator to perform all telephone functions using the mouse. This tells how many calls are on hold. Social Insurance Number (SIN) Canadas equivalent of a Social Security Number or Taxpayer Identification Number. Social Security (SS) An acronym used in UNIX for the policy owners social security number. Source of Funds (SOF) Acronym used in UNIX for source of funds-where the money came from.

Special Code (SP) Acronym used in UNIS for Special Codes (ABP, Jordan) Special Follow-Up An extraordinary follow-up which is manually set by the underwriter. Special Life Offer (SLO) The 2006 Special Life Offer provided many existing State Farm households the opportunity to acquire additional life insurance coverage with no underwriting and no medical questions asked. Special Monthly Mode An optional method of payment selected by a policy owner . As the title indicates, payments are made monthly (12 times a year). "Special" monthly plans offer a monthly rate less expensive than the "regular" monthly rate. The special plans are less expensive for the company to administer. Savings are passed on to the policyholder through a lower policy fee each month. (Employee Payroll, Agent Payroll, Salary Allotment, Government Allotment, Pre-Authorized Payment Plan, State Farm Payment Plan) Special Monthly Reference Number A unique combination of numbers which identifies the policy's special monthly mode and the extract date. Special Provision Particular condition or stipulation that applies to a specific beneficiary designation. A Special Provisions area is included on the beneficiary endorsement form. Spouse Rider Insurance coverage provided on the insured's spouse under a life insurance policy. (Spouse riders were available under the 6400 and 7000 series policies.) SR See PSR. SR is the transaction used to look at the PSR. Standard Rating Underwriting risk that is within the acceptable range. Applications issued standard do not contain ratings.

Standard Pend Time The number of days from the current date that is used to calculate the follow-up date for activities placed in the pended in-tray in Workload Management (WLM) State Farm Benefit Management Account (SFBMA) Interest bearing checking account that State Farm will establish for a beneficiary using policy proceeds. This account is an alternative to a one sum settlement. State Farm Dollars State Farm Bank Visa Rewards Program from Platinum or Classic Cards cardholders are eligible for the State Farm Bank Visa Rewards Program, At the end of each account cycle, a platinum or classic cardholder, earns a full 1% on every purchase. One State Farm Dollar is equivalent to one US Dollar. State Farm Payment Plan (SFPP) This special monthly payment mode provides State Farm policyholders the option of paying their premiums on a monthly basis instead of in a lump sum. You may sometimes also see this referred to as MPP. With this mode, Auto, Fire, Health, and Life policies are billed together on a monthly basis by the SFPP department. State Farm VP Management Corp (SFVPMC) The distributor of mutual funds, variable universal life insurance policies and variable deferred annuity policies issued by State Farm Insurance Company and State Farm Life and Accident Assurance Company. State Farm Workstation (SFW) Statement of Surviving Children This form is requested and must be completed at claim time if Children of the Insured are listed as beneficiaries. Status Information on paper or a computer screen which gives current data available in a policy master record. Status Master Record (SMR) SMR is the transaction used to look at the PMR (Policy Master Record). The

request is sent to Corporate where it is processed and returned to the Operations. The information received reflects master record contents at the time it is transmitted, or "real time" processing. Status Record (SR) A transaction that is used to look at the current policy status. This status may not reflect all recent changes made if Corporate is not updating or the transaction requires overnight processing. Stepping into the shoes If the annuitant of a Traditional or Roth IRA dies and the surviving spouse is the sole named primary beneficiary, the surviving spouse may elect to inherit the annuity and make the annuity their own. Stock Certificates A legal document that certifies ownership of a specific number of stock shares (or fractions thereof) in a corporation. Stranger Owned Life Insurance (STOLI) An investor group (strangers) initiates the insureds application and will likely acquire an interest in the life (and possibly profit from the death) of a participant. STOLI arrangements are purchased purely as an investment vehicle. Strategic Electronic Information Technology (iSEIT) A State Farm-written system for the creation (i.e., scanning), indexing, and company-wide retrieval of images and documents stored on FileNET repositories. The application has since been renamed to iSEIT. Structured Settlement Annuity Policy that provides for payments to State Farm Auto and Fire Company claimants that agreed to receive payments under an annuity instead of a lump sum payment. Subjective Criteria Criteria that the underwriter needs to evaluate for the determination of Preferred or Super Preferred rate classes. The system does not evaluate these criteria; nor does it calculate debits or credits for these criteria. Substandard Policy class in which additional premium is charged for increased mortality

due to health, occupation, or habits. Benefits may be reduced depending on the cause of death or disability. Substandard Extra Premium The additional premium charged for increased mortality due to health, occupation, or habits. Successor Beneficiary (SB) Person or persons named to receive the amount payable if no primary beneficiary is living at the death of the insured person, or if all primary beneficiaries die before settlement is made. Successor Payee The person or entity under a Supplementary Contract that will receive any remaining proceeds at the payees death. (Also often referred to as Beneficiary.) Suitability The process used to determine the suitability of investments for customers. Know Your Customer Rule 405 requires securities brokers to determine suitability before allowing the investment. Super Preferred An underwriting rate class that equates to a person with health characteristics that are significantly better than average. Supplementary Contract (SC) An additional contract which can be chosen by a policyholder or beneficiary to provide for the distribution of funds due to surrender of paid up additions, accumulated dividends, or when a policy terminates. Supplementary Contract in relationship to a death claim Contract issued containing details as to payment of proceeds of a life policy or an annuity. Policy may have matured, been surrendered, or terminated by death of the insured/annuitant. Surname The insured's last name. Surrender A transaction in which the policy owner of an annuity receives the entire

cash surrender value of the contract, thereby canceling it. Surrender Charge Expense charges sometimes imposed when a contract is surrendered within a stated number of years after it was purchased. For example: a surrender charge would be imposed if Universal Life policy is surrendered within the first ten years. 2006 series the surrender charge is for 15 years. Surrender Value The amount of cash value received when terminating a policy. The term cash surrender generally applied to permanent plans. Survivor Insurance Option (SIO) This rider provides that on the death of either the principal insured or the additional insured, the beneficiary of the deceased insured can increase the coverage on the surviving life up to an option amount provided by the rider. The increase will take effect at the time of receipt of the request AND a premium at least equal to 25% of the opted amount, or if less, the guideline premium remaining on total coverage in force after exercising the option. Survivor Purchase Option (SPO) The Survivor Purchase Option available with the Joint Universal Life policy allows the survivor to purchase a new permanent individual life insurance policy then available without evidence of insurability at the first death of the Insureds and is available if the first death is prior to the policy anniversary in which the survivor is age 75. The survivor may purchase up to the Survivor Insurance Amount, subject to issue minimums and maximums for the new policy. The Survivor Insurance Amount equals the Basic Amount for Option 1 and the Basic Amount plus Account Value for Option 2. Survivorship Universal Life This is a flexible premium life insurance policy with the death benefit payable at the death of the second of two insured lives. This policy does not provide for any death benefit on the first death. The owner may increase or decrease scheduled premiums, skip premiums, or make additional unscheduled premium payments. Suspended Payments Payments delayed until a future date. Suspense

Temporarily unapplied funds (credits) or artificially created funds (debits). Suspense Account An account in which money is temporarily stored until proper disposition is determined. Typically, State Farm suspense accounts are identified by an assigned number. The first 3 digits are for major accounts (e.g., 225) and the last 2 are for sub-accounts (e.g., 01). Suspicious Activity Risk Indicators Red flags in relation to money laundering. Suspicious Activity Report (SAR) A report filed by Marketplace Compliance involving money laundering violations such as terrorist financing or ongoing money laundering schemes that need immediate attention. System Administration Tables Criteria provided by Life General Underwriting that is programmed into Risk Advisor Initial Underwriting. The criteria are used to identify Problems and create Requirements. System Assignment A Workload Management (WLM) or Risk Advisor (RA) system function that assigns activities based upon profile and assignment criteria. System Lapse The system will automatically lapse the policy due to unpaid premiums. System Processed Risk Advisor is capable of issuing applications by the use of built in databases to evaluate application information. System Pulled Application A life electronic application that has not been submitted by the agent will be system pulled into the Life Operations Center 21 days after a premium payment is applied (cash, check, valid credit card, or valid SFPP account).

Table Rating An additional amount of premium added to the base premium rate to compensate for the added risk assumed when an applicant's history requires that they be charged a higher than average premium for their policy. Tax Cost Basis The original price of an asset including the purchase price and any associated costs. EX: the amount of money policy owners pays into annuities. Tax Equity and Fiscal Responsibility Act (TEFRA) Legislation that changes the way life insurance companies are taxed and also changed the taxation of withdrawals from annuity contracts to a gain-outfirst basis. Tax Exempt Organization A legally constituted organization whose objective is to support or engage in activities of public or private interest without any commercial or monetary profit. Tax Identification Number (TIN) An identifying number used for tax purposes in the United States. Includes social security numbers, Canadian social insurance numbers, corporate tax numbers, individual taxpayer identification numbers (ITIN), and employer Identification numbers (EIN). Tax Qualified (TQ) This term applies to any policy where payments are made with pre-tax dollars. There are several types of tax qualified plans such as: Keoghs, Tax Sheltered Annuities (TSA), Individual Retirement Annuities (IRA), Simplified Employee Pension Plans (SEP), Corporate Pension Plans (CPP) Registered Retirement Savings Plans (RRSP)- Canada. Tax Qualified Annuity An annuity that qualifies as a retirement plan under the Internal Revenue Service (IRS) rules, where contributions are tax deductible and when annuitized the entire payment is taxable as ordinary income. Tax Qualified Retirement Plan Retirement plan that receives favorable tax treatment. The plan may use

annuities or life insurance to hold the money contributed to the plan. Tax Receipts Generic term for Canadas tax forms (T5, T4RSP, T4A, T4RIF, NR4) similar to U.S. tax forms (W-9, W-2, W-4). Tax Sheltered Annuity (TSA) An annuity that allows an employee to make tax free contributions from his or her income into a retirement plan. Also known as a 403B. Tax Year Payments to tax qualified plans are limited to a specific dollar amount for each tax year. A tax year is a 12 month period that usually runs from January 1 to December 31. The dollar amount allowed each tax year varies with each type of TQ plan. Payment totals for the current tax year are maintained in the policy owner master record. Taxable Distribution A distribution that is taken by the policy owner and they are taxed on it. Taxable Gain The net value greater than the policy owner 's investment in contract. This amount is taxable income in the year of the distribution. Some elements are excluded when the gain is calculated, as previously reported items may exist. Technical and Miscellaneous Revenue Act of 1988 (TAMRA) Enacted in November 1988, this legislation significantly changed the taxation of life insurance policies which are subject to its provisions. The primary intent of TAMRA was to change the tax treatment of life insurance policies to discourage their use as investment vehicles. TAMRA created a new class of life insurance policy termed Modified Endowment Contract (MEC). It is within this act that modified endowment contracts and their tax treatment are defined. Tele-underwriting Involves professional interviewers talking directly with applicants to gather risk information. This allows for underwriting information to be gathered upfront and in some cases eliminates the need for an Attending Physicians Statement. Tele-underwriting allows the underwriter to make a sound underwriting decision in a timely manner.

Temporary Assignment Service Program (TASP) This is a program where an agent is assigned to temporarily service policies of an inactive code or holding code. Policies can stay on the existing agent computer environment of the prior agent or can be moved onto the servicing agents NECHO. Temporary Note A "throw away" note that can be changed or deleted in the Life TRIO Notes System and that records unfinished tasks. These are used to pass instructions to someone else, when pending a case, or when requesting additional information. These notes are not retained for the duration of the Policy Master Record (PMR) but will remain in the Notes System for 90 days from the note creation date. Term Term refers to a type of insurance. A term policy provides insurance coverage for a stated period of time, such as 1 year, 5 years, or 10 years. Term Access Level Individuals with this permission access level will be allowed to view reports for all Teams and Individual reports for anyone associated with the Group they are affiliated with. Term Conversion Change from a term policy to a permanent policy. Term Conversion Credit (TCC) Provided when a policy owner converts eligible term coverage to a permanent plan during the first 5 years of coverage. The term conversion credit amount is equal to the premium paid towards the term coverage during the 12 months prior to the conversion and is applied to the new policy to pay part of the initial premium. Terminal Age Age at which an endowment benefit will be payable. Terminated (TRM) When a policy "terminates", the coverage in force ceases. Terminated General Relief - Jordan Class Members with Terminated policies could elect to purchase an

Enhanced Value Policy (EVP) and/or an Enhanced Value Annuity (EVA) as long as they did not seek Claim Review Relief. Terminated Status A record that is closed. Termination When a policy "terminates", the coverage in force ceases. Termination Code This code indicates the reason for the termination of the policy. Termination code examples include Not Taken, Lapse, Surrender, and Expiry. Termination Value On policies with cash value, the termination value may consist of the current cash value, dividends, unearned premiums, and possibly a special dividend paid only at death, maturity, or surrender (referred to as DMS). If a policy does not have cash value (for example, a term policy which hasn't been in force long enough to develop cash value), the policy does not has a cash surrender value. Instead, the policy has termination value equal to the amount of gross unearned premium, plus the amount of any dividend credits. Testamentary Trust A trust created as a result of explicit instruction from a deceased's will. Third Party Administrator (TPA) An organization that processes insurance claims or certain aspects of employee benefits for a separate entity. EX: Rust Consulting, INC. was retained by State Farm during JORDAN to perform the following administrative functions: printing and mailing notices, handling returned mail, responding to inquiries, handling forms, and communicating and dispensing claim awards to class members. Third Party Owner/Ownership Includes anyone who owns a policy on someone else's life. For example, people who own policies on their spouses, or business partners who own policies on each other's lives. Title Bar The area at the top of each window that contains the system menu symbol, a

small icon, a window title, and the window sizing buttons. The system menu symbol contains the system menu. Tobacco A premium class for proposed insureds who have used tobacco or nicotine products in the past 12 months. Tool Bar The main screen toolbar appears just below the menu bar. It allows onebutton access to common Message Manager activities. The Activity menu allows keyboard access to these toolbar functions. Total Mode Gross Premium (TMGP) This premium is the total premium the insured is billed for, including the premium for the base policy and any benefits or riders in force in the PMR. Total Option Units Sum of current and all prior option units offered. Total Record The most recent code records, whether active or inactive for each agent in the Agency Master File (AMF) containing the agents earnings, production, persistency and status. Total Report Management Solution (TRMS) This system provides access to reports for on-line viewing and storage. TRMS resides on the IBM host and access is granted to individual employees based on the needs of specific reports. Total Value (TV) The Gross Value plus the sum of any 111, 254, 258 and 440 debits at the time of the distribution. Trail Record of activity for a contract. Transaction Register A record of business activity that occurs in each working day. Transaction Restriction Code Refer to Restriction Codes. TRIO Notes

Temporary or Permanent notes entered into the Workload Management system. Trust Document giving a person the power to manage property for another's benefit. Trustee Person empowered to manage property under a trust. U

Unavailability Utility A diagnostic tool accessed thru Workload Management (WLM) which aids the users with profile administrative access to monitor the availability of profiles. Underwriting Administrative Specialist (UAS) The Underwriting Administrative Specialist is accountable for accurate handling of Administrative requirements within Underwriting and activities occurring after application input and ending with Final Action. Underwriting Premium Limit (UPL) A premium payment that would increase the policy's death benefit more than it increases the policy value will be accepted only if: the insurance in force, as increased, will be within the Company's issue limits; the Company's insurability requirements are met; and the premium payment is received prior to the policy anniversary nearest the Insured's 85th birthday. Underwriting Status Record & Underwriting Support Record (USR) This screen is displayed when a Record Number is entered on AGENCY CODE SEARCH OF USR SCREEN but no specific "sub" screen was requested. It will also be displayed if the function US is accessed and the policy number and surname are entered. This screen lists all information outstanding for the particular policy number in question.

MED - Medical Status AQS - APS/Questionnaires APP - Application/Miscellaneous CMT - Comments/Special Follow-up AUI - Additional Underwriting Information CVG - Coverage Status Uniform Simultaneous Death Act A uniform act enacted in some US states to alleviate the problem of simultaneous death in determining inheritance. Uniform Transfer to Minors Act (UTMA) The Uniform Transfers to Minors Act (UTMA) is a law that extends the definition of "gift" in the Uniform Gift to Minors Act (UGMA) to include real estate, fine art, patents and royalties. Gifts can be made to a minor without the presence of an appointed guardian and it satisfies IRS requirements for a qualifying gift. UNISEX A unisex rate is calculated so both males and females have the same payment amount. This usually occurs due to state or federal legislation. United States Postal Service (USPS) The United States maintains the largest postal system in the world, handling almost half the worlds volume of postal traffic. To deal with the problem of increasing deficits and to improve the overall management and efficiency of the post office, the U.S. Congress approved the Postal Reorganization Act of 1970, signed into law Aug. 12, 1970. The act transformed the Post Office Department into a government-owned corporation, called the United States Postal Service. Universal Life (UL) A flexible premium life insurance policy with an adjustable death benefit. The owner may increase or decrease scheduled premiums, skip premiums, or make additional unscheduled premium payments. Insurance coverage may be increased or decreased without having to purchase a new policy. Universal Life Increase A Life rider that is added to a Universal Life policy that increases the basic amount. The policy provision allows one increase per year (not including

increase due to a term conversion or GIO election). Universal Life Under Funding Alarm Each policy in this category has insufficient account value and premium payments to sustain the policy without lapse within the next ten years. These calculations are based on the current interest rates. The policy owner should be encouraged to increase the premium amount as soon as possible to avoid lapse within the next ten years. The servicing agent will receive the message for the lifetime of the policy; however, the compensation agent will only receive the message for the first two policy years. UNIX A computer operating system (the basic software running on a computer, underneath things like word processors and spreadsheets). UNIX is designed to be used by many people at the same time (it is multi-user) and has TCP/IP built-in. It is the most common operating system for servers on the Internet. Unmatched Case Occurs when the Workload Management system is unable to assign a case to any profile. The recipient for Unmatched Cases is designated through the Access Workload Management Administration functions. Unpaid Premium Handling (UPH) System handling that occurs in an attempt to keep coverage in force. UPH occurs on a Universal Life policy when the account value isn't sufficient to pay the monthly deductions and advance the paid-to-date. Update Profile The process of accessing Workload Management (WLM) which will allow an authorized user to view or change existing profiles. Updated Policies Updated policies are whole life and endowment policies issued prior to 1983, which now contain the variable loan interest policy loan provision.

Variable Annuity (VA) A type of insurance contract that guarantees future payments to the holder, or annuitant at retirement from funds accumulated on a tax deferred basis. The annuity's value varies with that of the underlying portfolio securities, which may include mutual fund shares. Variable Loan Interest (VLI) A policy issued March 1, 1983 and later where a policy owner can choose to borrow money at interest rates that vary according to changing economic conditions. If the policy doesn't have VLI rates, a policy loan is made at a fixed rate or guaranteed rate. Variable Loan Interest Provision (VLI) The Variable Loan Interest (VLI) provision establishes a "New Money" concept to loan interest due and payable. The VLI provision allows for the loan interest rate to be adjusted on a quarterly basis if necessary. Variable Products Life Insurance or Annuity product that is interest sensitive and allows you to choose from 6 different funds. Variable Products Administration Department (VPAD) Area of Life Company that handles and processes the Variable contracts and policies. Variable Universal Life Policy (VUL) A form of whole life insurance that combines the premium and death benefit flexibility of universal life insurance with the investment flexibility and risk of variable life insurance. Veteran's Group Life Insurance (VGLI) A service person separating from active duty on or after August 1, 1974, with full-time active duty basic coverage will have the 120-day extension, or the one year disability extension if qualifications are met. At the end of the extended coverage, the service person's insurance can be converted to Veteran's Group Life Insurance. The veteran cannot obtain the guaranteed conversion to a permanent plan of insurance with a SGLI affiliated company at this time. The veteran must wait 60 months (5 years) for the VGLI coverage to expire. At that time the veteran can obtain a guaranteed standard issue from a SGLI affiliated company.

Viatical A viatical company will make a lump sum payment to a policy owner in return for having the policy's death benefit assigned to that company. View This is an option in Workload Management (WLM) that allows displayed items in the in-tray to be refined by different criteria depending on the filter selected. Vitals Source of underwriting information that consists of blood pressure, pulse, height, and weight. This information is collected by a paramedical. Vital Signs Vital Signs assist agents and Field Offices in their life insurance marketing efforts. This web-based tool provides agents with the ability to quickly and easily compare and contrast State Farm's financial and rating data with that of other life insurers. Voice Signature To complete the voice signature process a signer is shown a document which includes both signature instructions and the document being signed. The signer then receives a call and speaks a signature statement. Volume U The Central Imaging Operation Services (CIOS) training/procedure manual published by Administrative Services. Voluntary Contribution Fund (VCF) If the TQ plan allows payments to the auxiliary fund, the plan will usually also allow non-deductible voluntary payments to the side fund. These payments are made with after-tax dollars and are recorded separately in the policy owner master record. Voluntary Contribution Premium (VCP) Some tax qualified plans allow nondeductible voluntary payments. These payments are recorded separately in the policy owner master record. "VCP" is the term used to distinguish voluntary contribution premium payments from required premium (RP) payments. Exception: IRA non-deductible contributions are not stored separately in the PMR. Deductible and non-

deductible IRA contributions are both considered RPs.

W-4P An IRS form which is used to elect a filing status in determining tax withholding for periodic payments. W-8 A certificate of foreign status required by the IRS to inform that an employee is a non-resident alien and is not subject to tax reporting or withholding rules. W-9 An IRS form certifying a payee's social security number or tax identification number is true and correct in order to avoid federal tax withholding. Waiver of Monthly Deduction for Disability (WMD) An optional rider available for Universal Life and Joint Universal Life. When the insured (for Joint Universal Life, WMD is available on both Insured 1 and Insured 2) becomes disabled as defined in the policy, this coverage will waive future monthly deductions. Only the cost of insurance is waived, not the planned premium. Waiver of Monthly Deduction - Death or Disability Rider (WMD-D/D) This benefit waives cost of insurance on the Second to Die or Survivorship UL (SUL) policy: 1) while the Principal Insured 1 (PI1) is totally and permanently disabled as defined in the rider, or 2) if PI1 dies prior to age the automatic termination date/age or while monthly deductions are being waived for disability. If the death benefit is Option 1 at time of disability, it will automatically change to Option 2. The deductions being waived will be based on the amounts of coverages in force at the time of the death or disability. Waiver of Premium A provision under a Disability Income policy in which payment of premium is waived on and after the occurrence of a contingency such as the insured

becoming totally and permanently disabled. Waiver of Premium for Disability (WPD) Provides that the Company pays future premiums if the insured becomes totally disabled as defined in the policy. Waiver of Premium for Purchaser (WPP) Payor coverage provides for the automatic payment of premiums on a juveniles policy if the purchaser dies or becomes disabled. Warning Message A message seen if the action being taken could cause something negative to happen. Watermark A translucent design impressed on paper that is visible when the paper is held to the light. Some documents containing watermarks do not scan well because the watermarks obscure the printed information on the document. We Think You Should Know - Disclosure Notice A notice that goes to the policyholder letting them know that an adverse underwriting decision has been made. Who Part of the Supplementary Contract record containing information about one person or entity that is a party named in the contract. Whole Life This type of insurance may be kept in force by the owner for the lifetime of the insured. (This contrasts with Term which is issued for a specific time period.) Whole Life Insurance Insurance that provides death protection for the insured's lifetime. Will A written, legal document, executed in the form required by law, used to transfer assets accumulated during ones lifetime to people and institutions after death. Window Period A 30 day period at the end of each guarantee period in which the policy

owner can choose to renew at the same interest rate guarantee period or choose a different period from those available, or choose partial annuitization. Withdrawal A transaction in which the policy owner of an annuity removes a portion of the annuities accumulated value from the contract account but does not cancel the contract. Withdrawal Date The date a policy owner can choose to indicate when money is taken out of the their bank account each month when on Pre-Authorized Check (PAC). Withdrawal Rule The specific right or lack of right to withdraw additional proceeds from a Contract. Withholding The holding back of a portion of wages, dividends, interest, payments, or other various sources of income for payment of state and/or federal taxes. Wire Transfer (WT) Electronically transferring funds from one account to another through the Federal Reserve Banking system. Funds are received the same day. Receiving bank usually charges the client for this service. WLM Quick Tour Online training for the Work Load Management System. Workload Management (WLM) An administrative web-based tool that serves a variety of functions. The Risk Analysis System (RAS) utilizes the Workload Management tool to manage claim referral work. It is used to: - Set up and maintain user profiles and assignment criteria to control the distribution of cases - Set preferences for unmatched cases, standard pend time, and critical data processing - Manage user availability to automatically receive electronic cases - Create workload summary and productivity reports. Also applies to Risk Advisor and viewing cases in another user's case folder. Writ of Attachment Enables a creditor to take possession of the property belonging to the debtor

pending the determination of the rights of the parties by a court of law. Writing Compensation Compensation that is paid to the agent who initially wrote the policy.

XCK An acronym used to access the initial UNIX screen so that a check can be modified or composed.

Year Income Disability - 2 Year (2YRID) Issue of the 2 Year Income Disability (2YRID) rider was discontinued as of January 1, 1978. This rider provided for payment of a monthly benefit while the insured remained totally and permanently disabled as defined by the rider. Yearly Renewable Term (YRT) A life insurance contract with premiums that increase annually and provide a level death benefit. YRT products provide financial protection only in the event of death, and generally have no cash value.

Zebra Printer The printer used to generate barcode labels for the Life Operations.