Life Segment
Whole Life. Whole life products provide a guaranteed benefit upon the death
of the insured in return for the periodic payment of a fixed premium over a
predetermined period. Premium payments may be required for the entire life of
the contract, to a specified age or a fixed number of years, and may be level
or change in accordance with a predetermined schedule. Whole life insurance
includes some policies that provide a participation feature in the form of dividends.
Policyholders may receive dividends in cash or apply them to increase death
benefits or cash values available upon surrender, or reduce the premiums required
to maintain the contract in-force.
Term Life. Term life products provide a guaranteed benefit upon the death of
the insured for a specified time period in return for the periodic payment of
premiums. Coverage periods typically range from one to thirty years, but in
no event longer than the period over which premiums are paid.
Universal Life. Universal life insurance products provide coverage through a
contract that gives the policyholder flexibility in premium payments and coverage
amounts. Universal life products may allow the policyholder, within certain
limits, to increase or decrease the amount of death benefit coverage over the
term of the contract and to adjust the frequency and amount of premium payments.
Universal life products are interest rate sensitive, and we determine the interest
crediting rates, subject to policy specific minimums.
Equity-indexed universal life products have the same features as the universal
life products, but also provide an opportunity for policyholders to earn additional
return through credited interest tied to the performance of a particular stock
index, such as the S&P 500.
Index to Financial Statements
Variable Universal Life. Variable universal life products provide insurance
coverage on a similar basis as universal life, except that the policyholder
bears the investment risk because the value of the policyholder’s account
balance varies with the investment experience of the securities held in the
separate account investment options selected by the policyholder.
Credit Life Insurance. Credit life insurance products are sold in connection
with a loan or other credit account. Credit life insurance products are designed
to pay to the lender the borrower’s remaining debt on a loan or credit
account if the borrower dies during the coverage period.
Annuity Segment
Deferred Annuity. A deferred annuity is an asset accumulation product. Deposits
are received as a single premium deferred annuity or in a series of payments
for a flexible premium deferred annuity. Deposits are credited with interest
at our determined rates subject to policy minimums. For certain limited periods
of time, usually from one to ten years, interest rates are guaranteed not to
change. Deferred annuities usually have surrender charges that begin at issue
and reduce over time and may have market value adjustments that can increase
or decrease any surrender value.
An equity-indexed deferred annuity is credited with interest using a return
that is based on changes in an index, such as the S&P 500 Composite Stock
Price Index, subject to a specified minimum.
Single Premium Immediate Annuity (“SPIA”). A SPIA is purchased
with one premium payment, providing periodic (usually monthly or annual) payments
to the annuitant for a specified period, such as for the remainder of the annuitant’s
life. Return of the original deposit may or may not be guaranteed, depending
on the terms of the annuity contract.
Variable Annuity. With a variable annuity the policyholder bears the investment
risk because the value of the policyholder’s account balance varies with
the investment experience of the securities held in the separate account investment
options selected by the policyholder. These products have no guaranteed minimum
withdrawal benefits.
Health Segment
Medicare Supplement. Medicare Supplement insurance is a type of private health
insurance designed to supplement or pay the costs of certain medical services
not covered by Medicare.
Supplemental Insurance. Supplemental insurance is designed to provide supplemental
coverage for specific events or illnesses such as cancer and accidental injury
or death.
Stop-Loss. Stop-loss coverage is used by employers to limit their exposure under
self-insured medical plans. Two coverages, which are usually offered concurrently,
are available. Specific Stop-Loss provides coverage when claims for an individual
reach a threshold; after the threshold is reached, the policy reimburses claims
paid by the employer up to a coverage limit for each individual. Aggregate Stop-Loss
reimburses the employer once the group’s total paid claims reach a threshold.
Credit Disability. Credit disability (also called credit accident and health)
insurance pays a limited number of monthly payments on a loan or credit account
if the borrower becomes disabled during the coverage period.
Medical Expense. Medical expense insurance covers most health expenses including
hospitalization, surgery and outpatient services (excluding dental and vision
costs). We no longer market these products and existing contracts are in run-off.
Property and Casualty Segment
Personal Lines. Personal lines include insurance policies sold to individuals
for auto, homeowners and other exposures. Auto insurance covers specific risks
involved in owning and operating an automobile. Homeowner insurance provides
coverage that protects the insured, owner’s or renter’s property
against loss from perils. Other personal insurance provides coverage for property
such as boats, motorcycles and recreational vehicles.
Commercial Lines. Agricultural business insurance is the majority of our commercial
lines. This includes property and casualty coverage tailored for a farm, ranch,
vineyard or other agricultural business, contractors, and business within rural
and suburban markets. Commercial auto insurance is typically issued in conjunction
with the sale of our Agricultural business insurance and covers specific risks
involved in owning and operating vehicles. Other commercial insurance is offered
along with our Agricultural business and encompasses property, liability and
workers’ compensation coverages.
Credit-Related Property Insurance Products. We primarily offer the following
credit insurance products:
Collateral or Creditor Protection Insurance (“CPI”). CPI provides
insurance against loss, expense to recover, or damage to personal property pledged
as collateral (typically automobiles and homes) resulting from fire, burglary,
collision, or other loss occurrence that would either impair a creditor’s
interest or adversely affect the value of the collateral. The coverage is purchased
from us by the lender according to the terms of the credit obligation and charged
to the borrower by the lender when the borrower fails to provide the required
insurance.
Guaranteed Auto Protection or Guaranteed Asset Protection (“GAP”).
GAP insures the excess outstanding indebtedness over the primary property insurance
benefits that may occur when there is a total loss to or an unrecovered theft
of the collateral. GAP can be written on a variety of assets that are used as
collateral to secure credit; however, it is most commonly written on automobiles.
Corporate and Other Segment—Our Corporate and Other segment is primarily
our invested assets not matched with our insurance activities. It also includes
our non-insurance subsidiaries, such as our limited investment advisory services.