A guaranteed benefit policy is an insurance contract that ensures specific benefits are paid out by the insurer. These benefits are predetermined and guaranteed, meaning the insurer is obligated to fulfill them regardless of other factors. This type of policy may also include any surplus amounts held in a separate account, but it does not cover other parts of that account.
This term is commonly used in the field of insurance law, particularly in relation to life insurance and retirement plans. Guaranteed benefit policies are important in ensuring financial security for policyholders and their beneficiaries. Users may encounter this term when reviewing insurance contracts or considering their financial planning options. Legal templates from US Legal Forms can assist individuals in navigating these documents effectively.
Here are a couple of examples of abatement:
Example 1: A life insurance policy that guarantees a payout of $100,000 upon the policyholder's death, regardless of market conditions or other factors, is a guaranteed benefit policy.
Example 2: A retirement plan that promises a specific monthly benefit to retirees, backed by the insurer, qualifies as a guaranteed benefit policy (hypothetical example).
29 USCS § 1101 defines the term "guaranteed benefit policy" in the context of insurance law, particularly concerning employee benefit plans. This statute helps clarify the obligations of insurers in providing guaranteed benefits.
| Term | Definition | Key Differences |
|---|---|---|
| Guaranteed benefit policy | An insurance policy with guaranteed payouts. | Focuses on guaranteed benefits only. |
| Variable benefit policy | An insurance policy where benefits can fluctuate based on investment performance. | Benefits are not guaranteed and can vary. |
If you have a guaranteed benefit policy or are considering one, review your contract carefully to understand the guaranteed benefits. If you need help, consider using US Legal Forms' templates to guide you through the process. For complex situations, consulting a legal professional is advisable.
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