Glossary

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M

Major medical policy
A medical expense policy which provides broad coverage both for hospital expenses and outpatient expenses. These policies generally have few limitations, high maximum benefit amounts, and high deductibles.

Master contract
A life insurance policy that insures a number of people under a single insurance contract; a legally binding agreement between an insurance company and a group policyholder to which the individuals insured are not parties.

Material fact
A fact is material if it is one which the agent should realize would be likely to affect the judgment of the principal in rendering any decision relative to the subject of the agency. Failure to disclose a material fact constitutes a violation of the trust.

Material misrepresentation
In insurance, a misstatement that is relevant to the company's acceptance of the risk because, if the truth had been known, the insurance company would not have issued the policy or would have issued the policy only on a different basis.

Matured endowment
An endowment insurance policy that has reached the end of the term during the lifetime of the insured and is therefore payable.

Maximum benefit period
The maximum length of time during which disability income payments will be made to a disabled insured.

Medicaid
A government sponsored health insurance program that provides payment of medical and hospital expenses for the poor. The program is administered on a local basis and supported by local and federal funds.

Medicare
A government sponsored health insurance program that provides payment of medical and hospital expenses to persons over age 65 and to other classes of persons as specified by Congress.

Minimum premium plan (MPP)
A group health insurance plan that is partially self-funded by the group policyholder but fully administered by another firm, most often an insurance company. Most of the claims received under the group insurance plan are paid using funds that the policyholder has deposited into a special account established for this purpose. Remaining claims are paid by the insurer.

Misrepresentation
A statement or conduct by a person which represents to another something that is not true.
A seller, broker, or builder may have a duty to disclose certain defects in property to a buyer or tenant. Failure to disclose is also misrepresentation. The misrepresentation may be deliberate, negligent, or innocent (reasonably believed to be true). Depending on the facts, extent of misrepresentation, and intent, there may be a suit for damages, rescission of a contract, punitive action (loss of a broker's license), etc.

Modified-premium whole life insurance
A type of whole life insurance in which the policy owner pays a lower than normal premium for a specified initial period, such as five years. After the initial period, the premium increases to a stated amount that is higher than usual. This higher premium is then payable for the life of the policy.

Money-market fund
A mutual fund that invests primarily in money market investments (also known as liquid asset fund).

Morbidity table
A chart used by insurance companies that shows the rate of sickness and injury occurring among given groups of people categorized by age.

Mortality table
A chart used by insurance companies that shows the rate of death among given groups of people categorized by age.

Mutual company
A life and health insurance company owned by policyholders rather than stockholders.

Mutual consent
All parties approve or assent to the terms of a contract. This is one of the four essential elements to any valid contract. The others are: capacity, lawful objective and consideration.

Mutual fund
An investment vehicle through which the funds of many people are pooled and placed in a variety of investments such as stocks and bonds. Investors purchase shares of stock in the mutual fund and become part owners of all the investments owned by the mutual fund.