Glossary of terms

Account options - These are the diversified range of options in which a Variable Group Universal Life insurance policy owner can invest his or her contributions. Account options are identified in each program by account name (e.g., Money Market) and the underlying investment (e.g., Advantus Money Market).

Account realignment - Taking some or all existing account money out of your existing account options and re-allocating it (in specific whole percentages) among the various account options.

Asset allocation - The way investments are distributed and weighted among different asset classes to attempt to yield the greatest possible return consistent with the investor's risk tolerance.

Asset Class - An investment category: such as stocks (equities), bonds (fixed income) or cash (money markets).

Bonds - Debt obligations issued by a government or corporation that generally pay a stated rate of interest and return the face value upon maturity.

Capital appreciation (or depreciation) - An increase (or decrease) in the price of an investment.

Capital gain or loss - Difference between an asset's purchase price and selling price.

Contribution allocation - This is how a VGUL owner's existing contributions are divided by percentage among the various account options. Contribution allocation changes affect how new or future monies coming into a VGUL owner's account should be allocated according to the owner's wishes.

Diversification - Spreading money among several investment options or asset classes for the purpose of reducing risk.

Dividend - Cash payments made to stockholders as determined by a company's board of directors.

Equities - Types of securities that represent ownership in a corporation. Stocks are equities.

Fixed income - Investments that are fundamentally debt securities. Bonds and U.S. Treasury obligations are examples.

Inflation - An increase in the price of goods and services resulting in a decrease in your ability to buy as much for the same amount of money.

Investment - A vehicle for money that seeks to increase its value through growth (increase in price) or income (dividends or interest).

Liquidity - Investments that can readily be cashed in are considered liquid.

Money market instruments - Short-term (less than one-year maturity) fixed income investments such as commercial paper and U.S. Treasury bills that provide for a specified amount of interest, plus repayment of principal at maturity.

Portfolio - Any combination of one or more securities or investments.

Rate of return - The increase or decrease in the value of your investment, expressed as a percentage.

Risk - The possibility that the value of an investment may decline or lose money. Also includes the possibility that it won't keep ahead of inflation.

Security - An instrument that signifies ownership in a corporation (stock), or creditor relationship with a corporation or governmental body (bond), or any interest-bearing contract.

Standard deviation - A measure of the volatility of a fund's performance over a period of time. A higher number indicates that the fund's performance has fluctuated (up or down). A lower number suggests that performance has not changed much over the measured time period.

Stock - Types of securities representing ownership in a corporation.

Standard & Poor's 500 Index - A well known index computed by Standard & Poor's Corporation, determined by the price action of 500 widely held common stocks from different sectors of the economy. It is frequently considered representative of the stock market as a whole.

Tax-deferred - A term to describe an investment whose earnings are free from taxation until they are withdrawn by the investor.

Time horizon - The length of time an investor plans to be investing.

Total return - The amount of interest and gain or loss (selling price minus cost) earned on an investment.

Transfer - A transfer moves a participant's current or existing account balances from one account option to another.

U.S. Treasury Obligations - Negotiable debt obligations issued by the U.S. government and backed by its full faith and credit. Treasury bills are short-term securities with maturities of one year or less. Treasury notes are intermediate-term securities with maturities of one to 10 years. Treasury bonds are long-term securities with maturities of 10 years or longer.

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